Long-run growth patterns within Asian NIEs: Empirical analysis based on the panel unit root test, allowing the heterogeneity of time trend and endogenous multiple structural breaks

Takashi Matsuki and Ryoichi Usami

MPRA Paper from University Library of Munich, Germany

Abstract: This study examines whether or not the convergence of per capita output—which is categorized as catching-up and long-run convergence, defined by Oxley and Greasley (1995)—exists within Asian newly industrializing economies (Asian NIEs), namely, Hong Kong, Singapore, South Korea, and Taiwan. The newly developed panel unit root test, which can allow for multiple structural breaks at various unknown break dates for each time series, is applied to the panels for 1960–2004, which includes the period of the Asian financial crisis. Moreover, in order to confirm the coexistence of the different growth patterns within the Asian NIEs, the heterogeneity—in terms of the inclusion or exclusion of a linear time trend and the types of breaks (in level or slope)—is allowed for each series in the test. The empirical results show that Hong Kong and Singapore have long-run convergence, whereas Korea and Taiwan are yet to converge with Hong Kong.

Keywords: convergence; Asian NIEs; unit roots; nonstationary panels; structural breaks (search for similar items in EconPapers)
JEL-codes: C01 C23 O47 O53 (search for similar items in EconPapers)
Date: 2008
New Economics Papers: this item is included in nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:11541

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