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...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Faculty of Economics and Management, Universiti Putra Malaysia
2009
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| Online Access: | http://psasir.upm.edu.my/id/eprint/39447/ http://psasir.upm.edu.my/id/eprint/39447/1/39447.pdf |
| _version_ | 1848849145300779008 |
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| author | Firdaus, Muhammad Yusop, Zulkornain |
| author_facet | Firdaus, Muhammad Yusop, Zulkornain |
| author_sort | Firdaus, Muhammad |
| building | UPM Institutional Repository |
| collection | Online Access |
| 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. |
| first_indexed | 2025-11-15T09:45:44Z |
| format | Article |
| id | upm-39447 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T09:45:44Z |
| publishDate | 2009 |
| publisher | Faculty of Economics and Management, Universiti Putra Malaysia |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-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 |
| spellingShingle | Firdaus, Muhammad Yusop, Zulkornain Dynamic analysis of regional convergence in Indonesia |
| title | 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_short | Dynamic analysis of regional convergence in Indonesia |
| title_sort | dynamic analysis of regional convergence in indonesia |
| url | http://psasir.upm.edu.my/id/eprint/39447/ http://psasir.upm.edu.my/id/eprint/39447/ http://psasir.upm.edu.my/id/eprint/39447/1/39447.pdf |