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Does an increase in education quality cause developing countries to catch up?

Łukasz Goczek
Łukasz Goczek
, 
Bartosz Witkowski
Bartosz Witkowski
 and 
Ewa Witkowska
Ewa Witkowska
   | Dec 31, 2022
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Article Category: Empirical Paper
Published Online: Dec 31, 2022
Page range: 393 - 408
Received: Oct 06, 2022
Accepted: Nov 21, 2022
DOI: https://doi.org/10.2478/ijme-2022-0028
Keywords
© 2022 Łukasz Goczek et al., published by Sciendo
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Panel VECM dynamic fixed-effects estimates

1 2 3 4
Long-run
OPEN 0.0043*** 0.0044*** 0.0041*** 0.0042***
(0.0014) (0.0014) (0.0014) (0.0014)
FDI (% GDP) −0.0029 −0.0029 −0.0027 −0.0028
(0.0027) (0.0028) (0.0026) (0.0027)
L10PISAAVE 0.0221***
(0.0085)
L10PISAREAD 0.0164**
(0.0071)
L10PISAMAT 0.0236***
(0.0084)
L10PISASCIE 0.0258***
(0.0094)
Short-run
Error Correction −0.0316*** −0.0312*** −0.0327*** −0.0321***
(0.0049) (0.0050) (0.0049) (0.0049)
ΔOPEN 0.0002** 0.0002** 0.0002** 0.0002**
(0.0001) (0.0001) (0.0001) (0.0001)
ΔFDI (% GDP) 0.0001* 0.0001* 0.0001* 0.0001*
(0.0001) (0.0001) (0.0001) (0.0001)
ΔL10PISAAVE(−1) −0.0007
(0.0007)
ΔL10PISAREAD(−1) −0.0008
(0.0005)
ΔL10PISAMAT(−1) −0.0001
(0.0009)
ΔL10PISASCIE(−1) −0.0008
(0.0007)
Constant 0.0018 0.0780 −0.0184 −0.0517
(0.1130) (0.0992) (0.1136) (0.1247)

CIPS unit root test results

Variable Levels First differences
Zt-bar p-value Zt-bar p-value
logGDP 44.523 1.00 −1.854 0.03
OPEN 0.01 0.50 −5.525 <0.01
FDI 0.72 0.76 −16.309 <0.01
PISAAVE 1.318 0.91 −17.421 <0.01
PISAREAD 1.159 0.88 −17.024 <0.01
PISAMAT 3.338 1.00 −18.784 <0.01
PISASCIE −1.907 0.03 −16.632 <0.01

Pesaran CD test results

PISAAVE PISAREAD PISAMAT PISASCIE
Breusch-Pagan LM 47,950.26 47,579.72 46,412.74 48,879.8
<0.001 <0.001 <0.001 <0.001
Pesaran scaled LM 563.4106 558.7497 544.0704 575.1033
<0.001 <0.001 <0.001 <0.001
Pesaran CD 202.8806 202.8742 197.609 205.7417
<0.001 <0.001 <0.001 <0.001

Panel VECM Granger causality

Null Hypothesis: Common coefficients Individual coefficients
F-statistic p-value W-Stat. Zbar-Stat. p-value
PISAAVE does not cause Log(GDP) 127.347 0.000 9.534 15.982 0.000
LOG(GDP) does not cause PISAAVE 17.455 <0.001 4.692 3.111 0.002
PISAREAD does not cause Log(GDP) 22.825 0.000 1.482 −2.938 0.003
LOG(GDP) does not cause PISAREAD 1.740 0.157 1.704 −2.109 0.035
PISAMAT does not cause Log(GDP) 83.056 0.000 9.422 15.683 0.000
LOG(GDP) does not cause PISAMAT 11.649 <0.001 5.699 5.788 <0.001
PISASCIE does not cause Log(GDP) 214.826 0.000 11.419 20.993 0.000
LOG(GDP) does not cause PISASCIE 23.700 <0.001 7.167 9.690 <0.001

Westerlund cointegration test results

Statistic Value Z-value p-value Robust p-value
PISAAVE
Gt −2.655 2.798 <0.01*** 0.01**
Ga −9.173 1.592 0.94 <0.01***
Pt −15.039 2.881 <0.01*** 0.01**
Pa −8.567 1.054 0.15 <0.01***
PISAREAD
Gt −2.738 −3.347 <0.01*** <0.01***
Ga −8.582 2.117 0.98 0.01**
Pt −14.547 −2.415 0.01** <0.01***
Pa −8.166 −0.673 0.25 <0.01***
PISAMAT
Gt −2.569 −2.225 0.01** 0.04**
Ga −8.584 2.115 0.98 <0.01***
Pt −14.21 −2.097 0.02** 0.01**
Pa −8.025 −0.538 0.30 <0.01***
PISASCIE
Gt −2.528 −1.951 0.03** 0.04**
Ga −9.397 1.393 0.91 <0.01***
Pt −14.082 −1.975 0.02** 0.01**
Pa −8.61 −1.095 0.14 <0.01***

Descriptive statistics

Variable Obs Mean Std. Dev. Min Max
logGDP 4,942 8.942929 1.233535 5.508054 11.82894
OPEN 7,538 80.11214 51.46048 0.0209992 531.7374
FDI 5,535 1.86752 12.44171 −202.8239 247.9023
PISAAVE 4,154 420.173 50.2345 312.482 550.1743
PISASCIE 4,154 424.9734 48.47972 323.4689 550.6454
PISAMAT 4,154 419.5068 51.97938 319.7289 566.1837
PISAREAD 4,154 416.0389 51.054 294.2483 543.4544
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