![]() Note: ∗∗ and ∗∗∗ indicate rejection of the respective null hypothesis at the 5% and 1% significance levels, respectively. Accordingly, there is no common autoregressive (AR) structure in the series and the panels are heterogeneous. The second-generation tests are based on the heterogeneity assumption. (2005) assume that there is a unit root in the data. With regards to this, all the tests except for the Bai and Ng (2005) and Harris et al. The second generation of panel unit root tests aims to overcome the shortcoming of cross-sectional dependence in the first-generation tests. Finally, it is possible to utilize all the first-generation tests except for the Hadri (2000) test for unbalanced panels. (1999) tests are based on heterogeneous cross-section formation. (2002), Breitung (2000), and Hadri (2000) tests assume that there is a common unit root process (e.g., cross-sections are homogeneous) across cross-section units, the Im et al. ![]() Among the first generation panel unit root tests, all the tests except for Hadri (2000), test the null hypothesis of a unit root. ![]()
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