Are The Kaldor's Laws Valid? Panel Data Analysis under Cross Section Dependency for NIC Countries.

In this study, the validity of the Kaldor's Laws in NIC (Newly industrialized countries) is tested and investigated via second generation panel data methods with structural break under cross section dependency in 1965-2012 periods and annual data are used. In analysis firstly, CrossSectionally Dependency (CD) in country was examined via CDLM test (Cross Sectionally Dependency Lagrange Multiplier) developed by Pesaran (2004), . Stationary of series was searched via CADF test (Cross-Sectionally Augmented Dickey-Fuller) developed by Pesaran (2006), considering CD. Cointegration relationship among series was examined the panel cointegration test with multiple structural breaks developed by Basher and Westerlund (2009). As a result of analysis, cointegration relationship between the series was determined. Also, the validity of the Kaldor's Law was determined.