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Testing nonlinear convergence in Malaysia


Habibullah, Muzafar Shah and Awang Marikan, Dayang Afizzah and Liew, Venus Khim Sen and Lim, Kian Ping (2013) Testing nonlinear convergence in Malaysia. Jurnal Ekonomi Malaysia, 47 (1). pp. 155-162. ISSN 0126-1962

Abstract / Synopsis

The purpose of the present paper is to examine income convergence in Malaysia by using the nonlinear unit root test due to Kapetanios et al. (KSS, 2003) and extended by Chong et al. (CHLL, 2008) to permit the test of long-run convergence and catching-up hypotheses. We apply the KSS-CHLL nonlinear unit root for the test of nonlinear convergence between thirteen states with respect to Wilayah Persekutuan (the riches state) of Malaysia for the period 1965 to 2003. Generally, our results suggest that out of the thirteen states, only Kedah, Negeri Sembilan, Perak, Perlis and Selangor support the long-run convergence hypothesis while Johor, Kelantan, Melaka, Pahang and Penang suggest catching-up. Lastly, Sabah, Sarawak and Terengganu indicate income divergence from Wilayah Persekutuan.

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Additional Metadata

Item Type: Article
Divisions: Faculty of Economics and Management
Publisher: Penerbit Universiti Kebangsaan Malaysia
Keywords: Income convergence; Nonlinear convergence; Nonlinear unit root test; States GDP; Malaysia
Depositing User: Umikalthom Abdullah
Date Deposited: 07 Apr 2015 11:09
Last Modified: 21 Jan 2016 08:27
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