The convergence dynamics of economic freedom across U.S. states.

This study tests for convergence in economic freedom across the 50 U.S. states from 1981 to 2019. In particular, we test for stochastic convergence in overall economic freedom using unit root tests that account for structural breaks and bounded processes, two sources of parameter instability. We fin...

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Published in:Southern Economic Journal Vol. 89; no. 4; pp. 1216 - 1242
Main Authors: Payne, James E., Saunoris, James W., Nazlioglu, Saban, Karul, Cagin
Format: Article
Published: Wiley-Blackwell Apr2023
Subjects:
Online Access:View this record in EBSCOhost
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      dt: Apr2023
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      pub: Wiley-Blackwell
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        10.1002/soej.12629
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        atl: The convergence dynamics of economic freedom across U.S. states.
      aug:
        au:
          Payne, James E.
          Saunoris, James W.
          Nazlioglu, Saban
          Karul, Cagin
        affil:
          Woody L. Hunt College of Business, Paul L. Foster and Alejandra de la Vega Foster Distinguished Chair in International Business and Research Fellow of the Hunt Institute for Global Competitiveness, The University of Texas at El Paso, El Paso Texas,, USA
          Department of Economics, Eastern Michigan University, Ypsilanti Michigan,, USA
          Department of International Trade and Finance, Pamukkale University, Denizli, Turkey
          Department of Economics and Finance, Nisantasi University, Istanbul, Turkey
          Department of Econometrics, Pamukkale University, Denizli, Turkey
      su:
        Economic convergence
        Economic liberty
        Stochastic convergence
      sug:
        subj:
          Economic convergence
          Economic liberty
          Stochastic convergence
      keyword:
        bounded unit roots
        club convergence
        economic freedom
        stochastic convergence
        structural breaks
        weak σ‐convergence
        bounded unit roots
        club convergence
        economic freedom
        stochastic convergence
        structural breaks
        weak σ‐convergence
      ab: This study tests for convergence in economic freedom across the 50 U.S. states from 1981 to 2019. In particular, we test for stochastic convergence in overall economic freedom using unit root tests that account for structural breaks and bounded processes, two sources of parameter instability. We find limited evidence of stochastic convergence. Further analysis of relative (club) convergence and weak σ‐convergence rejects the presence of overall convergence in the panel of the U.S. states, but the emergence of two convergence clubs with respect to state‐level economic freedom. The logit analysis of the determinants of the convergence clubs reveals that more prosperous states and states with a higher initial level of economic freedom have a higher probability of being in the club with more economic freedom. However, more racially diverse states have a lower probability of being in the club with more economic freedom.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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