Testing nonlinear convergence in Malaysia

Muzafar Shah Habibullah, and A.M., Dayang-Affizah and Venus, Khim-Senliew and Kian, Ping Lim (2013) Testing nonlinear convergence in Malaysia. Jurnal Ekonomi Malaysia, 47 (1). pp. 155-162. ISSN 0127-1962


Official URL: http://ejournal.ukm.my/jem/index


The purpose of the present paper is to examine income convergence in Malaysia by applying the nonlinear unit root test presented by 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. The KSS-CHLL nonlinear unit root is applied to the test of nonlinear convergence between thirteen states with respect to Wilayah Persekutuan, the richest state of Malaysia, for the period of 1965 to 2003. Generally, the results suggest that out of the thirteen states, 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.

Item Type:Article
Keywords:Income convergence; nonlinear convergence; nonlinear unit root test; states GDP; Malaysia
Journal:Jurnal Ekonomi Malaysia
ID Code:8098
Deposited By: ms aida -
Deposited On:30 Nov 2014 18:54
Last Modified:14 Dec 2016 06:46

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