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Productivity bias hypothesis: evidence from South Asia
Journal article   Open access   Peer reviewed

Productivity bias hypothesis: evidence from South Asia

Sajid Anwar and Syed Zahid Ali
Applied Economics Letters, Vol.22(17), pp.1389-1394
2015
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PDF - Author's Accepted Version71.95 kBDownloadView
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url
https://doi.org/10.1080/13504851.2015.1034832View
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Abstract

purchasing power parity exchange rate determination productivity bias hypothesis South Asia
Most existing studies have attempted to test the productivity bias hypothesis by making use of the cross-section data. This article utilizes countrylevel time series data from PennWorld Tables to examine the productivity bias hypothesis for five South Asian economies (namely, Bangladesh, India, Nepal, Pakistan and Sri Lanka). We make use of Johansen's cointegration approach and vector error correction modelling. The empirical analysis presented in this article shows that purchasing power parity theory holds for all countries considered. However, the productivity bias hypothesis appears to hold only in the case of Bangladesh and Nepal.

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