scholarly journals The joint impact of infrastructure and institutions on economic growth

2020 ◽  
Vol 16 (4) ◽  
pp. 481-502
Author(s):  
Yitagesu Zewdu Zergawu ◽  
Yabibal M. Walle ◽  
José-Manuel Giménez-Gómez
Keyword(s):  
Economic Growth ◽  
Method Of Moments ◽  
Generalized Method Of Moments ◽  
Institutional Quality ◽  
Explanatory Variables ◽  
Interaction Terms ◽  
Large Panel ◽  
Simple Growth ◽  
Moments Estimators

AbstractThis paper examines the joint impact of infrastructure capital and institutional quality on economic growth using a large panel dataset covering 99 countries and spanning the years 1980–2015. The empirical strategy involves estimating a simple growth model where, in addition to standard controls, infrastructure, institutional quality, and their interaction are included as explanatory variables. Potential endogeneity concerns are addressed by employing generalized method of moments estimators that utilize internal instruments. We find that the interaction terms between infrastructure capital and institutional quality show a positive and significant impact on economic growth. These results are robust to a variety of alternative specifications and institutional quality measures. Hence, our results suggest that maximizing returns from infrastructure capital requires improving the quality of institutions.

scholarly journals The Impacts of Chinese FDI and China–Africa Trade on Economic Growth of African Countries: The Role of Institutional Quality

Economies ◽  
2020 ◽  
Vol 8 (3) ◽  
pp. 53
Author(s):  
Miao Miao ◽  
Qiaoqi Lang ◽  
Dinkneh Gebre Borojo ◽  
Jiang Yushi ◽  
Xiaoyun Zhang
Keyword(s):  
Economic Growth ◽  
Generalized Method Of Moments ◽  
Institutional Quality ◽  
African Countries ◽  
Policy Action ◽  
Mediating Role ◽  
Theoretical Perspectives ◽  
Chinese Foreign Direct Investment

While there is a consensus on the expanding importance of the China–Africa economic relationship, there is much more debate on how to portray the relationship. Thus, this study is aimed to examine the impacts of the China–Africa trade and Chinese foreign direct investment (FDI) on the growth of African countries controlling the mediating role of institutional quality. The two-step system Generalized method of moments (GMM) model is applied using robust data for the period of 2003–2017. Drawing on complementary theoretical perspectives, this study took into account the conditional effect of China–Africa trade and Chinese FDI subject to the institutional quality of African countries and the interdependence of China–Africa trade and Chinese FDI to African countries. The benign impacts of the China–Africa trade and Chinese FDI on economic growth to African countries remain contingent upon appropriate policy action to improve the institutional quality of African countries and the synergies between the China–Africa trade and Chinese FDI to African countries.

scholarly journals Relationship Among Institutional Quality, Tax Revenue and Economic Growth at Provincial Level: Evidence from Vietnam

2016 ◽  
Vol 6 (9) ◽  
pp. 228-239
Author(s):  
Lien, Nguyen Phuong
Keyword(s):  
Economic Growth ◽  
Method Of Moments ◽  
Institutional Quality ◽  
Tax Revenue ◽  
Quality Indices ◽  
Method Of Moments Estimation ◽  
Generalised Method Of Moments ◽  
The Relationship ◽  
Estimation Models

To investigate the relationship among institutional quality, tax revenue, and economic growth in Vietnam, this work applies the Granger test for a panel data of 60 provinces in Vietnam during the period 2006 - 2014. In addition, using the two-step system generalised method of moments estimation supports this study to evaluate the degree of impact of interaction between quality of institutions and tax revenue on economic growth in more detail. The results provide a bi-direction causal linkage among the mentioned variables and discover that tax revenue has significantly positive impacts on economic growth. On the other hand, the effect on growth of economy of the ten institutional quality indices is diverse. The data also indicated convergence in all estimation models as suggested by classical theories of economic growth.

Tourism, Institutions, and Poverty Alleviation: Empirical Evidence from China

2020 ◽  
pp. 004728752094779
Author(s):  
Lei Zhao
Keyword(s):  
Method Of Moments ◽  
Poverty Reduction ◽  
Rural China ◽  
Generalized Method Of Moments ◽  
Tourism Development ◽  
Institutional Setting ◽  
Absolute Poverty ◽  
Negative Effects ◽  
Long Run

While tourism can be advocated as a means for poverty reduction, the inconclusive issue of poverty in developing countries has harbored doubts about the efficacy of tourism development in its reduction. This study empirically examines whether institutions influence how tourism development affects poverty. We apply the system generalized method of moments technique to estimate our empirical model. By using panel data for 29 Chinese provinces over the period 1999 to 2014, we empirically reveal that tourism and institutions have significant and negative effects not only on the absolute poverty but also on the relative poverty as measured by the Foster–Greer–Thorbecke (FGT) poverty indices in both the short and long run albeit at varying magnitudes of effect and levels of significance. In addition, institutional quality positively moderates the tourism–poverty nexus, thereby suggesting that the pro-poor effect of tourism development decreases as the quality of institutions improves in the thin institutional setting of rural China.

Shadow Economy, Corruption, and Economic Growth: An Empirical Analysis

2019 ◽  
Vol 47 (3) ◽  
pp. 276-294 ◽  
Author(s):  
Nedra Baklouti ◽  
Younes Boujelbene
Keyword(s):  
Economic Growth ◽  
Least Squares ◽  
Public Administration ◽  
Method Of Moments ◽  
Fixed Effects ◽  
Shadow Economy ◽  
Generalized Method Of Moments ◽  
Ordinary Least Squares ◽  
Negative Effects ◽  
Considerable Debate

There is considerable debate over the effects of both corruption and shadow economy on growth, but few studies have considered how the interaction between them might affect economic growth. We study how corruption levels in public administration affect economic growth and how this effect depends on the shadow economy. Using Ordinary Least Squares (OLS), fixed effects, and system generalized method of moments (GMM) on a dataset of 34 OECD countries over the period 1995-2014. The estimation results indicate that increased corruption and a larger shadow economy lead to decrease in economic growth. Results additionally indicate that the shadow economy magnifies the effect of corruption on economic growth. These results imply significant complementarities between corruption and the shadow economy, suggesting that the reduction of corruption will lead to a fall in the size of the shadow economy and will also reduce the negative effects of corruption on economic growth through the underground economy.

Bank-based and market-based development and economic growth: an international investigation

2019 ◽  
Vol 36 (3) ◽  
pp. 365-394 ◽  
Author(s):  
Isaac Boadi ◽  
Daniel Osarfo ◽  
Perpetual Boadi
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Method Of Moments ◽  
Design Methodology ◽  
Generalized Method Of Moments ◽  
Fixed Effect ◽  
Relative Impact ◽  
Content Type ◽  
Regional Effects ◽  
Development Policies

Purpose The purpose of this paper is to investigate the relative impact of bank-based and market-based financial developments on economic growth from 1984 to 2015, using 60countries. Design/methodology/approach This study uses fixed effect and generalized method of moments (GMM) to investigate the relative impact of bank-based and market-based financial developments on economic growth from 1984 to 2015, using 60 countries. The study further controls regional effects and the Asian crisis, as well as the global economic crisis. Findings The empirical results of the study revealed that market-based development positively affects economic growth. Besides, market-based financial development indirectly promotes investment, which has the potential to strongly enhance growth. The findings of this study, therefore, provide more support to pro-market-based financial development policies in these regions. Interestingly, bank-based development has no direct impact on development, but indirectly encourages investment, which also promotes growth. Originality/value This paper is the first of its kind to empirically examine fixed effect and GMM to investigate the relative impact of bank-based and market-based financial developments on economic growth from 1984 to 2015, using 60 countries.

Tourism-Led Growth Hypothesis: A New Global Evidence

2017 ◽  
Vol 59 (3) ◽  
pp. 304-311 ◽  
Author(s):  
Chor Foon Tang ◽  
Eu Chye Tan
Keyword(s):  
Economic Growth ◽  
Method Of Moments ◽  
Generalized Method Of Moments ◽  
Political Stability ◽  
Dynamic Panel ◽  
Beneficial Impact ◽  
The Relationship ◽  
Different Levels ◽  
Growth Hypothesis ◽  
Global Evidence

The primary aim of this study is to determine whether the tourism-led growth hypothesis is globally valid by accounting for countries’ income levels and their institutional qualities, against a panel dataset of 167 countries. The institutional qualities referred to are political stability and corruption control. We employ the dynamic panel generalized method of moments (GMM) approach to examine the relationship. It can be inferred from the exercise that tourism positively contributes to economic growth but the effect varies across countries at different levels of income and institutional qualities. Therefore, the effect of tourism on economic growth is contingent on levels of income and institutional qualities of the host tourism countries. Policy initiatives that aim to promote and strengthen institutional qualities should be undertaken for a country to enjoy the beneficial impact of tourism on economic growth and development.

scholarly journals The Effect of Private Investment on Public Expenditure in the CFA Franc Zone

2020 ◽  
pp. 16-21
Author(s):  
Emmanuel Blaise Efon Ngouo ◽  
Luc Nembot Ndeffo
Keyword(s):  
Method Of Moments ◽  
Public Expenditure ◽  
Generalized Method Of Moments ◽  
Private Investment ◽  
Political Environment ◽  
Business Climate ◽  
Franc Zone ◽  
Cfa Franc Zone ◽  
Cfa Franc

This paper investigates the effect of private investment on public expenditure in the CFA franc zone during the period 1980-2015. To attain this objective, the methodology adopted is the system Generalized Method of Moments (GMM). The result shows a positive and significant effect of private investment on public expenditure. This result thus justifies that private investment is an important source of increase in public expenditure. This result implies that public policies for improving private investment should be promoted: improving the business climate, improving the quality of institutions, ameliorate political environment, fight against terrorism ravaging part of Africa including Mali.

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