Empirical Literature on Economic Growth, 1991–2020: Uncovering Extant Gaps and Avenues for Future Research

2021 ◽  
pp. 097491012110616
Author(s):  
Natalia I. Doré ◽  
Aurora A. C. Teixeira
Keyword(s):  
Economic Growth ◽  
Latin American ◽  
Empirical Studies ◽  
Empirical Literature ◽  
Future Research ◽  
Long Run ◽  
Scientific Attention ◽  
The Impact ◽  
Determinants Of Economic Growth ◽  
Latin American And Caribbean

The factors required to achieve sustainable economic growth in a country are debated for decades, and empirical research in this regard continues to grow. Given the relevance of the topic and the absence of a comprehensive, systematic literature review, we used bibliometric techniques to examine and document several aspects in the empirical literature related to growth, from 1991 to 2020. Five main results are worth highlighting: (a) the share of empirical articles on economic growth show a clear upward trend; (b) among all the groups of countries considered, the emerging economies (EEs) have received the most scientific attention; (c) the economic growth processes of the Latin American and Caribbean EEs have observed negligible scientific attention; (d) the very long-run studies comprise a residual share among the empirical literature on growth; (e) the extant empirical studies on economic growth have addressed mainly the impact of “macroeconomic conditions.” Our findings suggest there is a need to redirect the empirical growth agenda, so as to encourage more scientific attention devoted to the analysis of key determinants of economic growth in the very long run. There should also be increased scrutiny of the processes of economic growth in Latin American and Caribbean EEs

The Impact of Public Debt on Economic Growth: A Review of Contemporary Literature

2018 ◽  
Vol 45 (4) ◽  
pp. 339-357
Author(s):  
Talknice Saungweme ◽  
Nicholas M. Odhiambo
Keyword(s):  
Economic Growth ◽  
Public Debt ◽  
Positive Impact ◽  
Empirical Studies ◽  
Theoretical Models ◽  
Empirical Literature ◽  
Long Run ◽  
Negative Effect ◽  
The Impact ◽  
The Relationship

This article provides a detailed survey of existing theoretical and empirical literature on the impact of public debt on economic growth in both developing and developed economies. The aim of the article is to add to the existing debate on the relationship between public debt and economic growth in world economies. The survey finds diverse and, in some cases, inconsistent evidence on the relative impact of public debt on economic growth. Although the majority of the surveyed literature supports the negative effect of public debt on economic growth, several other studies have found a long-run positive impact of public debt on economic growth through the fiscal multiplier effect. The article also found that a few other studies support the Ricardian Equivalence Hypothesis (REH), which states that the relationship between public debt and economic growth is nonexistent. On balance, the article also found that there is a growing body of empirical evidence, which supports the presence of threshold effects in the relationship between public debt and economic growth. Overall, it concludes that theoretical models and empirical studies yield inconclusive results depending on a set of heterogeneous factors, including the level of development of the sampled countries, data coverage, methodology used, and the researchers’ choice of control variables, among other factors. This literature survey differs predominantly from other earlier studies in that it provides a comprehensive review of the linkage between government debt and economic growth, in addition to disentangling public debt into two components, domestic and foreign, and expounding on their relative effects on economic growth.

scholarly journals The Contribution of Sustainable Tourism to Economic Growth and Employment in Pakistan

2019 ◽  
Vol 16 (19) ◽  
pp. 3785 ◽  
Author(s):  
Faiza Manzoor ◽  
Longbao Wei ◽  
Muhammad Asif ◽  
Muhammad Zia ul Haq ◽  
Hafiz ur Rehman
Keyword(s):  
Economic Growth ◽  
South Asian ◽  
Global Economy ◽  
Tourism Industry ◽  
Policy Implications ◽  
Future Research ◽  
Asian Countries ◽  
Long Run ◽  
Augmented Dickey Fuller ◽  
The Impact

In the global economy, tourism is one of the most noticeable and growing sectors. Thissector plays an important role in boosting a nation’s economy. An increase in tourism flow canbring positive economic outcomes to the nations, especially in gross domestic product (GDP) andemployment opportunities. In South Asian countries, the tourism industry is an engine ofeconomic development and GDP growth. This study investigates the impact of tourism onPakistan’s economic growth and employment. The period under study was from 1990 to 2015. Tocheck whether the variables under study were stationary, augmented Dickey–Fuller andPhillips–Perron unit root tests were applied. A regression technique and Johansen cointegrationapproach were employed for the analysis of data. The key finding of this study shows that there isa positive and significant impact of tourism on Pakistan’s economic growth as well as employmentsector and there is also a long‐run relationship among the variables under study. This studysuggests that legislators should focus on the policies with special emphasis on the promotion oftourism due to its great potential throughout the country. Policy implications of this recent studyand future research suggestions are also mentioned.

scholarly journals Reforming the IMF to Increase FDI Led Economic Growth: The Case of Latin American and Caribbean Countries

2018 ◽  
Vol 04 (S1) ◽  
pp. 81
Author(s):  
Ashraf Mahate ◽  
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Latin American ◽  
Host Country ◽  
Direct Investment ◽  
Negative Impact ◽  
Positive Impact ◽  
The Impact ◽  
Latin American And Caribbean ◽  
The Imf

There is a strong body of literature that finds a direct connection between inward foreign direct investment and economic growth in the host country. At the same time, economic growth in the host country attracts additional Foreign Direct Investment (FDI). This bidirectional relationship can be supported by the IMF through its lending program to countries to assist in dealing with short-term shocks as well as managing more long-term structural issues. In fact, the IMF programs in theory should provide an indicator to potential investors that the country is committed to making a change and opening its economy, which are typical requirements under IMF conditions. IMF intervention should lead to a positive impact on inward FDI. This study examines the impact of IMF-support programs on inward FDI for a sample of Latin American and Caribbean Countries. The results from this study reveal that being on an IMF borrowing program has a negative impact on inward FDI in the second and third year. We argue that being on an IMF borrowing program does not provide inward FDI with the seal of approval that it requires in making an investment.

Contemporary Survey on the Empirical Literature of Islamic Finance and Economic Growth Relationship

2019 ◽  
Vol 8 (2) ◽  
pp. 14-26
Author(s):  
Ibrahim Musa Gani ◽  
Zakaria Bin Bahari
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Significant Contribution ◽  
Empirical Studies ◽  
Empirical Literature ◽  
Islamic Finance ◽  
Real Economy ◽  
The Real ◽  
Long Run ◽  
Short Run

Financial sector activities are part of the main ingredients for the growth of any economy. The financial activities that were most widely practiced are Interest-based conventional financial activities which are prohibited in Islam. Thus, non-interest Islamic financial activities were introduced and it has been accepted and practiced all around the globe. Therefore, this study surveyed, explored and analysed using library review method, the empirical studies conducted on Islamic finance and the economic growth nexus. The study revealed that the majority of the findings of the empirical studies are in support of a positive and significant contribution of Islamic finance to the growth of the real economy in short run and long run, few of the findings indicate an insignificant contribution. The causal relationship between Islamic finance and growth is mostly bi-directional as reported in many of the studies, but supply leading hypothesis also emerged in some of the few studies. It was concluded that Islamic finance is immensely contributing to the growth of the real economy.

EMPIRICAL STUDIES ANALYZING THE DYNAMIC EFFECTS OF CHANGES IN PUBLIC EXPENDITURE AND TAXATION ON ACTIVITY

2018 ◽  
Vol 28 (5) ◽  
pp. 1641-1646
Author(s):  
Mahije Mustafi ◽  
Sulbije Memeti Karemani
Keyword(s):  
Economic Growth ◽  
Fiscal Policy ◽  
Economic Activity ◽  
Empirical Studies ◽  
Empirical Literature ◽  
Budget Deficits ◽  
Dynamic Effects ◽  
Macroeconomic Impact ◽  
The Business Cycle ◽  
The Impact

This paper analyzes the empirical literature that examines the effects of fiscal policy shocks on economic activity. Discussion related to fiscal policy is related to the impacts on economic growth is quite current, because the development of appropriate fiscal instruments can lead to steady and sustainable economic growth in the countries. The role of fiscal policy and the impact on economic activity are among the most controversial issues among academics and policymakers. In the absence of any "active" intervention in government expenses, tax revenues move automatically with the economic cycle. I can also say that government transfers can be considered as help for the unemployed, they grow as the economy slows down and unemployment rises, while labor tax returns, capital and consumption flows are declining. Resistive actions occur when the business cycle improves. In recent years, empirical studies have shown that private consumption and GDP have increased significantly, while government expenses have been severely reduced. Most empirical evidence suggests that fiscal expansion increases production and consumption and worsens the trade balance.The Kenzie and Neoclassical schools have different views on the impact of public spending on economic activity. This study has completed a detailed review of many important, relevant scientific havepapersthat empirically document these impacts. As a conclusion, we can state that although the fiscal policy theory is well developed, until recently has not received much attention from the (applied) economic practice. The first category is aimed at assessing macroeconomic impact from major reductions in the budget deficit, and the second study, in general, analyzes the stabilizing capabilities of fiscal policy variables. According to Blanchard and Perotti, the dynamic effects of the discretionary fiscal policy of macroeconomic variables have recently focused on the omissions of autoregressive vectors (2002). Some empirical studies have found a link between budget deficits, money growth and inflation, both in industrialized economies as well as in growing economies. For industrial economies most of these studies have come to the conclusion that there is little evidence that government debt affects the growth of money and inflation. In developing countries, it is often argued that high inflation is realized when governments face large and ongoing deficits financed by money emission. A change in taxes or public expenses (the so-called “fiscal shocks”) at any time prevents their development.

scholarly journals Macroeconomic Determinants of Economic Growth: A Review of International Literature

2016 ◽  
Vol 11 (2) ◽  
pp. 33-47 ◽  
Author(s):  
Themba G. Chirwa ◽  
Nicholas M. Odhiambo
Keyword(s):  
Economic Growth ◽  
Monetary Policy ◽  
Human Capital ◽  
Fiscal Policy ◽  
Empirical Studies ◽  
Physical Capital ◽  
Developed Countries ◽  
Empirical Literature ◽  
Macroeconomic Determinants ◽  
Determinants Of Economic Growth

AbstractThe paper conducts a qualitative narrative appraisal of the existing empirical literature on the key macroeconomic determinants of economic growth in developing and developed countries. Much as other empirical studies have investigated the determinants of economic growth using various econometric methods, the majority of these studies have not distinguished what drives or hinders economic growth in developing or developed countries. The study finds that the determinants of economic growth are different when this distinction is used. It reveals that in developing countries the key macroeconomic determinants of economic growth include foreign aid, foreign direct investment, fiscal policy, investment, trade, human capital development, demographics, monetary policy, natural resources, reforms and geographic, regional, political and financial factors. In developed countries, the study reveals that the key macroeconomic determinants that are associated with economic growth include physical capital, fiscal policy, human capital, trade, demographics, monetary policy and financial and technological factors.

Debt Covenants and Corporate Governance

2019 ◽  
Vol 11 (1) ◽  
pp. 197-219 ◽  
Author(s):  
Sudheer Chava ◽  
Shunlan Fang ◽  
Praveen Kumar ◽  
Saumya Prabhat
Keyword(s):  
Empirical Studies ◽  
Empirical Literature ◽  
Future Research ◽  
Debt Covenants ◽  
Corporate Policies ◽  
Ex Post ◽  
Trade Offs ◽  
Ex Ante ◽  
The Impact ◽  
Covenant Violations

We review the recent theoretical and empirical literature on debt covenants with a particular focus on how creditor governance after covenant violations can influence the borrower's corporate policies. From the theoretical literature, we identify the key trade-offs that help explain the observed heterogeneity in covenant types, inclusion, likelihood of violation, and postviolation renegotiation flexibility. Empirically, we first review the literature that deals with ex ante evidence on covenant design and the various factors that influence covenant design; we next review the ex post evidence on the impact of technical covenant violations on the borrower. We then discuss limitations of the existing theoretical and empirical studies and conclude with some directions for future research in this burgeoning area.

scholarly journals The Impact of FDI on Economic Growth in Case of Romania

2020 ◽  
Vol 12 (12) ◽  
pp. 81
Author(s):  
Alina Mihaela Ciobanu
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Labor Force ◽  
Direct Investment ◽  
Trade Openness ◽  
Causality Test ◽  
Long Run ◽  
Main Determinants ◽  
The Impact ◽  
Determinants Of Economic Growth

Foreign direct investment flows had increased worldwide over the last decades and many specialists think that there is a strong correlation among trade, FDI, labor force, and economic growth in the receiving countries. Based on available statistical data, we will examine the effects of FDI on GDP growth and the causality relations between GDP, trade openness, labor force, and FDI in case of Romania for the last decades. The ARDL bound testing approach is used to study the existence of a long-run relationship between FDI, trade, labor, and economic growth. Then the error-correction based Granger causality test is used to test the direction of causality between the variables. The results revealed that there is cointegration among the variables when real GDP and foreign direct investment are the dependent variables. Foreign direct investment, trade openness, and labor force are the main determinants of economic growth in the long run in Romania. In addition, the increase of gross domestic product, exports, imports and labor force promote foreign direct investment in the long run.

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

2015 ◽  
Vol 7 (4) ◽  
pp. 90-97
Author(s):  
Sani Ali Ibrahim
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Time Series Data ◽  
Empirical Studies ◽  
Trade Openness ◽  
National Income ◽  
Series Data ◽  
Long Run ◽  
The Impact

The economic development performance can be used to measure the economic growth of a given country. In economic analysis, a country can attain economic growth through the growth in national income measurement. However, there were rigorous discussions on the role of foreign direct investment (FDI) on economic growth and continued to be a topic of discussion on the contemporary economy. This paper serves as an extension to the previous empirical studies on the issue by providing some evidence from time series data for the period 1971 to 2013 of Nigeria. The primary aim of this study is to analyze the impact of FDI on economic growth of Nigeria taking trade openness, Gross Fixed Capital Formation and human capital as control variables. To investigate the long run equilibrium relationship, Johansen and Juselius co-integration approach is analyzed, while the speed of adjustment in the short run is analyzed through the use of VECM method. In Nigeria, FDI, GFCF and HK have long run relationship with economic growth. However, the coefficient of ECM in Nigeria is statistically significant at 1% level of significance. Thus, 10.8% of the adjustment is achieved due to the correction of the adjustment speed in a year.

The role of infrastructure on economic growth in belt and road participating countries

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mui-Yin Chin ◽  
Sheue-Li Ong ◽  
Chew-Keong Wai ◽  
Yee-Qin Kon
Keyword(s):  
Economic Growth ◽  
Capital Expenditure ◽  
Panel Cointegration ◽  
Infrastructure Development ◽  
Content Type ◽  
Long Run ◽  
Belt And Road ◽  
The Impact ◽  
Determinants Of Economic Growth

Purpose This study aims to delve deeply into the role of infrastructure on economic growth in 59 belt and road initiative (BRI) participating countries from various regions of the world as the main objective of BRI is to encourage the participating countries to improve investment and trade facilitation via infrastructure. Besides, the development of infrastructure is in line with the United Nations’ 2030 sustainable development goals (SDG). Design/methodology/approach This study encompasses all of the important physical infrastructure factors to compute a composite infrastructure index. Thereafter, this study used both the panel cointegration and the panel Granger causality tests to investigate the impact of the infrastructure index and other essential factors on economic growth. Findings The empirical results signify the importance of infrastructure development on economic growth in both the long-run and short-run. Besides, it is evident that capital, expenditure on health and education, as well as exports, will accelerate economic growth. Originality/value The findings of this study could contribute to the literature regarding BRI in two ways. First, it will provide insight to the policymakers of China and the BRI participating countries on whether infrastructure development is worthy of huge investment so as to enhance the success of the BRI. Second, the outcome of this study will give policymakers a better understanding of the determinants of economic growth, which, in turn, will help them in designing effective policies.

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