The heterogeneity of convergence in transition countries

For two groups of post-communist countries (CEE and CIS) we estimated the parameters of convergence equations on the basis of annual data. We depart from standard econometric theory, which involves panel regression techniques. We test cross-country heterogeneity of parameters within a system of Seem...

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Bibliographic Details
Published inPost-communist economies Vol. 31; no. 1; pp. 75 - 105
Main Authors Pipień, Mateusz, Roszkowska, Sylwia
Format Journal Article
LanguageEnglish
Published Abingdon Routledge 02.01.2019
Taylor & Francis Ltd
Subjects
Communism
Communist societies
Convergence
Economic crisis
economic growth
Heterogeneity
labour productivity
Productivity
Random effects
SURE
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Summary:For two groups of post-communist countries (CEE and CIS) we estimated the parameters of convergence equations on the basis of annual data. We depart from standard econometric theory, which involves panel regression techniques. We test cross-country heterogeneity of parameters within a system of Seemingly Unrelated Regression Equations (SURE). We show empirical evidence in favour of the variability of parameters describing the convergence effect and productivity growth rates across countries. Our approach seems a convincing alternative to the panel regression approach where random effects can be estimated, imposing an assumption about the constancy of structural parameters within the group of countries under analysis. We discuss the role of the global financial crisis in the heterogeneity of convergence processes and productivity at the country level. The aforementioned SURE model was estimated based on two datasets, one containing observations prior to the crisis and the second containing the whole sample.
ISSN:1463-1377
1465-3958
DOI:10.1080/14631377.2018.1443245