The Impact of Total Factor Productivity on Economic Growth for Developed and Emerging Countries: A Second-generation Panel Data Analysis

2017 ◽  
Vol 11 (4) ◽  
pp. 404-417 ◽  
Author(s):  
Ömer Yalçınkaya ◽  
İbrahim Hüseyni ◽  
Ali Kemal Çelik
Keyword(s):  
Economic Growth ◽  
Panel Data ◽  
Total Factor Productivity ◽  
Second Generation ◽  
Capital Formation ◽  
Emerging Countries ◽  
Fixed Capital ◽  
Factor Productivity ◽  
Fixed Capital Formation ◽  
The Impact

This article investigates the determinants of economic growth and also seeks to determine whether or not the impact of total factor productivity (TFP) changes with respect to the level of development for selected countries. In this manner, the present study examines the impact of gross fixed capital formation, employed labour and the TFP of G-7, G-12 and G-20 countries on real GDP per capita using second-generation panel data analyses over the period 1992–2014. The results reveal that TFP has a greater impact on economic growth than fixed capital formation and employed labour for all country groups. Furthermore, the impact of TFP on economic growth was found to be greater for developed countries than for emerging countries. JEL Classification: C21, C22, C23

New Evidence on the Relationship Between Economic Freedom and Growth: A Panel Cointegration Analysis for The Case of OECD

2012 ◽  
Vol 12 (3) ◽  
pp. 1850263 ◽  
Author(s):  
Ekrem Erdem ◽  
Can Tansel Tugcu
Keyword(s):  
Economic Growth ◽  
Panel Data ◽  
Total Factor Productivity ◽  
Economic Freedom ◽  
Global Financial Crisis ◽  
Oecd Countries ◽  
Cointegration Analysis ◽  
Factor Productivity ◽  
The Impact ◽  
The Relationship

The aim of this paper is to find a new answer to an old question “Is economic freedom good or not for economies?” which was refreshed after the Global Financial Crisis of 2008. For this purpose, the relationship between economic freedom and economic growth, and the relationship between economic freedom and total factor productivity in OECD countries were investigated by using panel data for the period of 1995-2009. Study employed the recently developed cointegration test by Westerlund (2007) and the estimation technique by Bai and Kao (2006) which account for cross-sectional dependence that is an important problem in the panel data studies. Although no significant relationship found between economic freedom and total factor productivity, cointegration analysis revealed that economic freedom matters for economic growth in OECD countries in the long-run, and estimation results showed that direction of the impact is negative.

scholarly journals Impact of Trade Openness on Economic Growth: A Case Study of Pakistan'

2017 ◽  
Vol 3 (1) ◽  
pp. 57-68
Author(s):  
Rashid Ahmad ◽  
Kashif Raza ◽  
Sobia Saher
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Negative Impact ◽  
Trade Openness ◽  
Capital Formation ◽  
Fixed Capital ◽  
Series Data ◽  
Fixed Capital Formation ◽  
The Impact

Purpose: This paper estimates the impact of trade openness and economic growth in Pakistan by using time series data from period of 1975-2014. Econometric method was applied to estimate the impact of trade openness on economic growth. Gross fixed capital formation (proxy of investment), Foreign direct investment, Imports, Exports & trade openness (proxy of trade openness to check the volume of trade of a country) is used as explanatory variables while gross domestic product is treated as dependent variable in this study. Johansson co. integration approach developed by Johannes & Jeslius (1988) is used to evaluate the long run relationship among variables in this study. The results suggest that trade openness, imports, exports and foreign direct investment cast have positive impact on economic growth while on the other hand; gross fixed capital formation &labor force has negative impact on economic growth.

scholarly journals Relationship between Trade Openness, Financial Development and Economic Growth of Nepal: Evidence from a Developing Country

2020 ◽  
Vol 2 (2) ◽  
pp. 206-224
Author(s):  
Shreezal G.C.
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Developing Country ◽  
Financial Development ◽  
Capital Formation ◽  
Fixed Capital ◽  
Technological Factors ◽  
Long Run ◽  
Fixed Capital Formation ◽  
The Impact

Background: Capital investment, financial and technological developments are essential drivers for the economic growth of developing countries like Nepal. These factors, directly and indirectly, contribute to the growth of the country. Technological factors such as FDI and trade allow technology and knowledge transfers to Nepal along with foreign investments, goods and services. The financial sector encourages investors by providing loans that further generates investment in the country. Similarly, the development of human capital further increases labor productivity. Nepal, being a developing country, lacks advanced infrastructure and technology, that are vital for pushing the economic growth in the country. Objective: This paper examined the effect of capital, labor, foreign direct investment, financial development and trade on the economic growth of Nepal using the endogenous growth model. Methods: The study employedthe ARDLboundstesting approach to test the long-run relationships introducing an error correction model to estimate both short and long-term relationships among the variables.The TY non-granger causality test was used to ensure robustness and check the direction of causality. Results: The results showed that gross fixed capital formation, population and financial development were significant and inducedpositive economic growth in the long run at a 1% level of significance whereas, the impact of FDI on economic growth was negative and significant at 1%. Conclusions: The study concludes that an increase in gross fixed capital formation, population and broad money supply positively impacts the economic growth of Nepal. However, technological factors such as FDI and trade do not adequately explain the economic growth due to low FDI inflows, political instability, poor infrastructure and import dependency. Implications: The study emphasized domestic investment and financial development of the country as they were found to be highly significant in the long run. Also, the human capital of the country should be developed by providing education and training as the population was found to be highly significant. The study also indicated that Nepal should push export as its share in the trade is very less. Moreover, policies such as legal reforms, incentives to foreign investors and infrastructural development to attract FDIs in Nepal should be formulated.

scholarly journals The Impact of Foreign Direct Investment on Economic Growth in Malaysia

2020 ◽  
Vol 6 (1) ◽  
pp. 25
Author(s):  
Masturah Ma’in ◽  
Siti Sarah Mat Isa
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Life Expectancy ◽  
Population Growth ◽  
Direct Investment ◽  
Capital Formation ◽  
Fixed Capital ◽  
Long Run ◽  
Fixed Capital Formation ◽  
The Impact

This study analyzes the impact of Foreign Direct Investment (FDI) on economic growth in Malaysia. The Auto-Regressive Distributed Lag (ARDL) method is used to investigate the long-run relationship between FDI and economic growth. The controlled variables are life expectancy, gross fixed capital formation and population growth. The bound test suggests that FDI, life expectancy, gross fixed capital formation and population growth have a long-run relationship with economic growth. This is supported by the significant correction term, which confirms the existence of a long-run relationship. However, as FDI, life expectancy and gross fixed capital formation have positive impact on Malaysia’s economic growth, population on the other hand, shows otherwise.

scholarly journals Tax Revenue, Capital Formation, and Economic Growth in Nigeria

2021 ◽  
Vol 12 (1) ◽  
pp. 101
Author(s):  
A. Abiola Oluwatobi ◽  
F. Adegbie Festus ◽  
O. Ogundajo Grace
Keyword(s):  
Economic Growth ◽  
Time Series Data ◽  
Causal Effect ◽  
Capital Formation ◽  
Fixed Capital ◽  
Sustainable Growth ◽  
Series Data ◽  
Tax Revenue ◽  
Fixed Capital Formation ◽  
The Government

Economic growth drivers aimed at stimulating and stabilizing the economies of the countries to engender sustainable growth. Studies have shown that Nigeria has been plagued with stunted and faltering economic growth over the years. Tax and other relevant macroeconomic policies are implemented by the government to smoothen out economic fluctuations but this has not been fully harnessed. A causal-effect study was conducted between tax revenue, gross fixed capital formation and economic growth using a 38-year time series data from 1981 to 2018 derived from CBN statistical bulletin. It was found that tax revenue (TR) had significant positive effect on Gross Domestic Product and Gross Fixed Capital Formation (GFCF) significantly controls the relationship between TR and GDP. It is evidenced that the country relied heavily on taxes as major source of revenue. The study recommended that government should widen its tax net, creates expansionary measures to enhance its tax revenue in order to boost its GDP. The government should also create an enabling environment for economy diversifications in order to increase revenue generated via other means than taxes in order to spur economic growth and avoid over-reliance on taxes.

scholarly journals Analysis of the Gravity Movement and Decoupling State of China’s CO2 Emission Embodied in Fixed Capital Formation

Energies ◽  
2020 ◽  
Vol 13 (24) ◽  
pp. 6655
Author(s):  
Xi Zhang ◽  
Ziyan Gao ◽  
Yong Geng ◽  
Yen Wah Tong ◽  
Harn Wei Kua ◽  
...  
Keyword(s):  
Economic Growth ◽  
Co2 Emissions ◽  
Co2 Emission ◽  
Yellow River ◽  
Capital Formation ◽  
Fixed Capital ◽  
Embodied Energy ◽  
River Region ◽  
Fixed Capital Formation ◽  
Northwestern Region

Investment is an essential engine of economic growth and a major source of China’s CO2 emission. It is therefore crucial to explore the gravity movement and decoupling state of China’s CO2 emission embodied in fixed capital formation (FCF). This study aims to estimate China’s CO2 emissions embodied in various categories of FCF by using input–output tables. The gravity model and Shapley decomposition method are used to explore the gravity movement and regional contributions for China’s CO2 emissions embodied in FCF. Then, the Tapio decoupling model and logarithmic mean Divisia index (LMDI) method are combined to uncover the decoupling relationship between CO2 emissions and economic growth embodied in FCF and the corresponding driving factors. The results show that China’s CO2 emissions embodied in FCF experienced a rapid increase during 2002–2012 and remained almost stable during 2012–2017. The gravity center for CO2 emissions embodied in FCF moved toward northwest during 2002–2015, with the northwestern region and middle Yellow River region being the main engine regions. The relations between CO2 emissions and added values embodied in various categories of FCF were weak decoupling during 2002–2017. Investment scale was the major factor inhibiting the decoupling, while embodied energy intensity was the major factor promoting the decoupling. Finally, several policy recommendations are proposed based on these findings.

scholarly journals Energy Efficiency, Policy and GTFP

2018 ◽  
Vol 53 ◽  
pp. 01033
Author(s):  
Fangqing Yi ◽  
Zenglian Zhang
Keyword(s):  
Economic Growth ◽  
Energy Efficiency ◽  
Environmental Regulation ◽  
Total Factor Productivity ◽  
Industrial Structure ◽  
Provincial Government ◽  
Factor Productivity ◽  
Linkage Mechanism ◽  
The Government ◽  
The Impact

The environmental and resource constraints on economic growth are increasingly evident. China urgently needs to reshape its economic growth momentum. The increase in green total factor productivity is particularly necessary for the growth of the quantity and quality of the economy. This paper selects the provincial panel data of 30 provinces in China from 2001 to 2015, and establishes a panel exchangeable errors model to analyze the impact of eight indicators on green total factor productivity (GTFP) and verifies its effectiveness. Empirical analysis shows that inter-provincial government competition, environmental regulation, energy consumption, and capital stock have a significant impact on green total factor productivity. The influence of foreign direct investment, industrial structure, and industrialization level on the total factor productivity of green is not significant. Therefore, the government should adopt suitable, flexible and diverse environmental regulation policies, promote energy-saving emission reduction and technology innovations through policies such as taxes and subsidies, strengthen the linkage mechanism between industrial structure upgrading and energy efficiency, to increase green total factor productivity.

Are human capital, intellectual property rights, and research and development expenditures really important for total factor productivity? An empirical analysis

2019 ◽  
Vol 46 (6) ◽  
pp. 756-774 ◽  
Author(s):  
Misbah Habib ◽  
Jawad Abbas ◽  
Rahat Noman
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Intellectual Property ◽  
Property Rights ◽  
Research And Development ◽  
Total Factor Productivity ◽  
Intellectual Property Rights ◽  
Factor Productivity ◽  
Content Type ◽  
The Impact

Purpose The purpose of this paper is to investigate the impact of human capital (HC), intellectual property rights (IPRs) and research and development (R&D) expenditures on total factor productivity (TFP), which leads to economic growth. Design/methodology/approach The panel data technique is used on a sample of 16 countries categorized into two groups, namely Brazil, Russia, India and China (BRIC) and Central and Eastern European (CEE) countries and, in order to make a comparison for the time period of 2007–2015, the researchers used a fixed effect model as an estimation method for regression. Findings The results indicate that HC, IPRs and R&D expenditures appear to be statistically significant and are strong factors in determining changes in TFP and exhibit positive results in all sample sets. Moreover, IPRs alone do not accelerate growth in an economy, especially taking the case of emerging nations. Originality/value Considering the importance of CEE and BRIC countries, and inadequate research on these regions with respect to current study’s variables and techniques, the present research provides valuable insights about the importance of HC, IPR and R&D activities and their impact on TFP, which leads to economic growth. IPRs create a fertile environment for R&D activities, knowledge creation and economic development. Distinct nations can attain better economic status via HC, R&D activities, innovation, trade and FDI, although the relative significance of these channels is likely to differ across countries depending on their developmental levels.

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