Is the Mahayana shunyata same as the Theravada papanca? I originally wondered whether the Mahayana shunyata (emptiness) is same as the Theravada sankhara (conditioned and compounded phenomena). The problem here is that Mahayana shunyata says even Nibbana is empty, but Theravada's sankhara does not include Nibbana. So, this does not match.

But after a lot of discussion here, I find that the Mahayana shunyata (emptiness) could be equivalent to the Theravada papanca (objectification-classification or reification), as found in MN 18 and Sutta Nipata 4.14. And Sutta Nipata 4.14 states that the root of papanca is "I am the thinker".

I could say that all papanca is empty of essence or substance.

How somebody (who is not an ariya) imagines Nibbana to be, is the papanca of it in his mind. In that sense, the papanca of Nibbana is empty of essence or substance.

How somebody (who is not an ariya) imagines a chair to be, is the papanca of it in his mind. In that sense, the papanca of a chair is empty of essence or substance.

Even the papanca of papanca itself is empty of essence or substance. This corresponds to Mahayana shunyata's emptiness of emptiness.

So, does it make sense to say that the Mahayana shunyata is same as the Theravada papanca?

Thanissaro Bhikkhu's explanation of papañca in MN 18:


  Translating papañca: As one writer has noted, the word papañca has had
  a wide variety of meanings in Indian thought, with only one constant:
  in Buddhist philosophical discourse it carries negative connotations,
  usually of falsification and distortion. The word itself is derived
  from a root that means diffuseness, spreading, proliferating. The Pali
  Commentaries define papañca as covering three types of thought:
  craving, conceit, and views. They also note that it functions to slow
  the mind down in its escape from samsara. Because its categories begin
  with the objectifying thought, "I am the thinker," I have chosen to
  render the word as "objectification," although some of the following
  alternatives might be acceptable as well: self-reflexive thinking,
  reification, proliferation, complication, elaboration, distortion. The
  word offers some interesting parallels to the postmodern notion of
  logocentric thinking, but it's important to note that the Buddha's
  program of deconstructing this process differs sharply from that of
  postmodern thought.


From Sutta Nipata 4.14:


  "I ask the kinsman of the Sun, the great seer,
  about seclusion &amp; the state of peace.
  Seeing in what way is a monk unbound,
  clinging to nothing in the world?"
  "He should put an entire stop
  to the root of objectification-classifications (papañca):
  'I am the thinker.'
  
  Commentary (Thanissaro):
  On objectification-classifications and their
  role in leading to conflict, see Sn 4.11 and the introduction to
  MN 18. The perception, "I am the thinker" lies at the root of
  these classifications in that it reads into the immediate present a
  set of distinctions — I/not-I; being/not-being; thinker/thought;
  identity/non-identity — that then can proliferate into mental and
  physical conflict. The conceit inherent in this perception thus forms
  a fetter on the mind. To become unbound, one must learn to examine
  these distinctions — which we all take for granted — to see that they
  are simply assumptions that are not inherent in experience, and that
  we would be better off to be able to drop them.
Yes, more or less.

Although, strictly speaking you are making a category error.

Shunyata refers to the fact that everything is an abstraction, simplification, subjective observation, and that in fact everything appears from interaction of a bunch of processes (known in this context as "causes and conditions") - including the process of perception. Shunyata and Sankhara are closely related. 

While Papanca refers to the process by which we take that empty stuff, those appearances, and because of ignorance assign to them the status of real, objective, clearly delineated things.

Papanca is something that can be stopped through Buddhist education. But Shunyata cannot be stopped, it's a fundamental law.

In one sense they are opposite: Papanca is "bad" (because when mind does Papanca - it's confused) - but Shunyata is "good" (because when mind sees Shunyata - it's enlightened).

You are right about Nirvana. It's empty when you think about it as the object of your mind. But when you actually realize that everything is Shunyata and stop clinging to things because of that (including clinging to the concepts of Nirvana and Shunyata) - now that's real Nirvana which is not empty.