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Dynamic analysis of regional convergence in Indonesia

This study examines income convergence among provinces in Indonesia using dynamic panel data approach. The results show that static and dynamic panel data approaches produce different results of convergence patterns. Consistent with the theory, the Ordinary Least Square (OLS) and fixed-effects estim...

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Main Authors: Firdaus, Muhammad, Yusop, Zulkornain
Format: Article
Language:English
Published: Faculty of Economics and Management, Universiti Putra Malaysia 2009
Online Access:http://psasir.upm.edu.my/id/eprint/39447/1/39447.pdf
http://psasir.upm.edu.my/id/eprint/39447/
http://econ.upm.edu.my/ijem/vol3_no1.htm
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spelling my.upm.eprints.394472015-08-03T04:32:56Z http://psasir.upm.edu.my/id/eprint/39447/ Dynamic analysis of regional convergence in Indonesia Firdaus, Muhammad Yusop, Zulkornain This study examines income convergence among provinces in Indonesia using dynamic panel data approach. The results show that static and dynamic panel data approaches produce different results of convergence patterns. Consistent with the theory, the Ordinary Least Square (OLS) and fixed-effects estimators provide the upper and lower bounds. The first-differences generalized method of moments (FD-GMM) provides invalid estimators which are lower than the coefficient from the fixed effects estimators due to the weak instruments problem. The system-GMM (SYS-GMM) estimators are found to be unbiased, consistent and valid. They show that convergence process prevails among provinces in Indonesia for the period 1983 – 2003. However the speed of convergence is relatively very slow (0.29) compared to other studies in developing countries. Faculty of Economics and Management, Universiti Putra Malaysia 2009-06 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/39447/1/39447.pdf Firdaus, Muhammad and Yusop, Zulkornain (2009) Dynamic analysis of regional convergence in Indonesia. International Journal of Economics and Management, 3 (1). pp. 73-86. ISSN 1823-836X http://econ.upm.edu.my/ijem/vol3_no1.htm
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
description This study examines income convergence among provinces in Indonesia using dynamic panel data approach. The results show that static and dynamic panel data approaches produce different results of convergence patterns. Consistent with the theory, the Ordinary Least Square (OLS) and fixed-effects estimators provide the upper and lower bounds. The first-differences generalized method of moments (FD-GMM) provides invalid estimators which are lower than the coefficient from the fixed effects estimators due to the weak instruments problem. The system-GMM (SYS-GMM) estimators are found to be unbiased, consistent and valid. They show that convergence process prevails among provinces in Indonesia for the period 1983 – 2003. However the speed of convergence is relatively very slow (0.29) compared to other studies in developing countries.
format Article
author Firdaus, Muhammad
Yusop, Zulkornain
spellingShingle Firdaus, Muhammad
Yusop, Zulkornain
Dynamic analysis of regional convergence in Indonesia
author_facet Firdaus, Muhammad
Yusop, Zulkornain
author_sort Firdaus, Muhammad
title Dynamic analysis of regional convergence in Indonesia
title_short Dynamic analysis of regional convergence in Indonesia
title_full Dynamic analysis of regional convergence in Indonesia
title_fullStr Dynamic analysis of regional convergence in Indonesia
title_full_unstemmed Dynamic analysis of regional convergence in Indonesia
title_sort dynamic analysis of regional convergence in indonesia
publisher Faculty of Economics and Management, Universiti Putra Malaysia
publishDate 2009
url http://psasir.upm.edu.my/id/eprint/39447/1/39447.pdf
http://psasir.upm.edu.my/id/eprint/39447/
http://econ.upm.edu.my/ijem/vol3_no1.htm
_version_ 1643832424176549888
score 13.211869

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