Trade openness, labour market rigidity and economic growth: A dynamic panel data analysis

2017 ◽  
Vol 28 (4) ◽  
pp. 555-564
Author(s):  
Burçak Polat ◽  
Antonio Rodríguez Andrés
Keyword(s):  
Economic Growth ◽  
Panel Data Analysis ◽  
Trade Openness ◽  
Estimation Method ◽  
Dynamic Panel Data ◽  
One Step ◽  
Generalised Method Of Moments ◽  
Openness To Trade ◽  
The Relationship

The rapid liberalisation of trade policies since the 1990s has brought additional attention to the role of trade as an engine of economic growth. Although an abundant literature addresses the relationship between openness and economic growth, the real effect of trade liberalisation is still ambiguous and undetermined. Most previous studies have ignored the selection effects of strict labour regulations on international trade. The main objective of this study is to measure the role of labour regulations in moderating the contribution of trade to economic growth among 30 Organisation for Economic Co-operation and Development countries for the period 2006–2013. In doing so, we employ a one-step Generalised Method of Moments system estimation method. Our results reveal that openness to trade does not have a robust and significant effect on growth. However, the interaction of openness with strict labour regulations enhances the contributions of trade to growth.

Financial Development and Economic Growth

2015 ◽  
pp. 233-245
Author(s):  
Filiz Eryılmaz ◽  
Hasan Bakır ◽  
Mehmet Mercan
Keyword(s):  
Economic Growth ◽  
Data Analysis ◽  
New Zealand ◽  
Financial Development ◽  
Positive Relationship ◽  
Panel Data Analysis ◽  
Annual Data ◽  
The Subject ◽  
The Relationship

The relationship between financial development and economic growth has been the subject of considerable debate in development and growth literature. Therefore this chapter provides evidence on the role of financial development in accounting for economic growth in 23 OECD countries (Italy, Japan, Luxemburg, Holland, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, England, USA, Australia, Austria, Belgium, Canada, Denmark, Finland, Turkey, France, Germany, Greece, Iceland) via panel data analysis using the annual data for the period 1980-2012. The authors find a positive relationship between financial development and economic growth for all countries. Also this result means that financial development leads economic growth in these countries. So the results may help policymakers formulate effective financial sector policies as a tool to promote economic growth.

scholarly journals An econometric study of the role of the political stability on the relationship between democracy and economic growth

2020 ◽  
Vol 67 (2) ◽  
pp. 187-206
Author(s):  
Nedra Baklouti ◽  
Younes Boujelbene
Keyword(s):  
Economic Growth ◽  
Data Model ◽  
Generalized Method Of Moments ◽  
Political Stability ◽  
Dynamic Panel Data ◽  
The Political ◽  
Dynamic Panel ◽  
Mena Countries ◽  
The Relationship

This article examines the nexus between democracy and economic growth while taking into account the role of political stability, using dynamic panel data model estimated by means of the Generalized Method of Moments (GMM) over the period 1998 to 2011 for 17 Middle East and North Africa (MENA) countries. Our empirical results showed that there is a bidirectional causal relationship between democracy and economic growth. Moreover, it was found that the effect of democracy on economic growth depends on the political stability. The results also indicated that there is important complementarity between political stability and democracy. In fact, political stability is a key determinant variable of economic growth. Eventually, democracy and political stability, taken together, have a positive and statistically significant effect on economic growth. This finding suggests that, if accompanied by a stable political system, democracy can contribute to the economic growth of countries. Thus, the MENA governments should use policies to promote political stability in the region.

scholarly journals EXTERNAL DEBT, INSTITUTIONAL QUALITY AND ECONOMIC GROWTH

2020 ◽  
Vol 23 (2) ◽  
pp. 221-238
Author(s):  
Siti Nurazira Mohd Daud
Keyword(s):  
Economic Growth ◽  
Panel Data Analysis ◽  
External Debt ◽  
Institutional Quality ◽  
Dynamic Panel Data ◽  
Dynamic Panel ◽  
Debt Overhang ◽  
Negative Effect ◽  
Dynamic Panel Data Analysis

This paper addresses the gap in the literature by investigating the role of the institutional quality in the nexus of external debt and economic growth. By employing a dynamic panel data analysis, we found that the institutional quality plays some role in complementing the effect of external debt on a country’s economic growth. We also found that the negative effect of external debt and a country’s economic growth monotonically increases with the level of institutional indicator, which implies the possibility of debt overhang may still happen in economies endowed with good institutions, but for higher values of debt.

scholarly journals Foreign Aid, Domestic Savings and Economic Growth in Selected MENA Countries

2016 ◽  
Vol 6 (1) ◽  
pp. 352 ◽  
Author(s):  
Mahmoud Mohammed Sabra ◽  
AbdelHakeem Eltalla
Keyword(s):  
Economic Growth ◽  
Foreign Aid ◽  
System Analysis ◽  
Negative Impact ◽  
Trade Openness ◽  
Negative Relationship ◽  
Dynamic Panel Data ◽  
Mena Countries ◽  
Domestic Savings

<p class="ber"><span lang="EN-GB">Foreign aid can have either a positive or a negative impact on economic growth. The role of foreign aid in supporting growth by completing domestic savings has been a subject of substantial argument. In this study, we explore the role of foreign aid, trade openness, investment, domestic savings and economic growth in eight MENA countries (Morocco, Algeria, Egypt, Palestine, Syria, Jordan, Lebanon and Tunisia) for the period from 1977 to 2013. The estimation has been done using simultaneous equation model and dynamic panel data system analysis. A negative relationship is found between economic growth and foreign aid. The negative impact of foreign aid on economic growth could be due to presence of Dutch disease and bad policy environment. In addition, foreign aid seems to crowd out domestic savings rather than complementing it. The effects of trade openness and domestic investment on economic growth are significantly positive.</span></p>

Does corporate social responsibility lead to improved firm performance? The hidden role of financial slack

2019 ◽  
Vol 16 (7) ◽  
pp. 957-982 ◽  
Author(s):  
Woon Leong Lin ◽  
Jo Ann Ho ◽  
Siew Imm Ng ◽  
Chin Lee
Keyword(s):  
Corporate Social Responsibility ◽  
Social Responsibility ◽  
Dynamic Panel Data ◽  
Dynamic Panel ◽  
Content Type ◽  
Financial Slack ◽  
Generalised Method Of Moments ◽  
Corporate Social ◽  
The Relationship

Purpose The purpose of this study is to investigate the relationship between corporate social responsibility (CSR) and corporate financial performance (CFP), as the findings on the relationship have been inconsistent and have led to calls to further examine this relationship. However, instead of investigating the connection between CSR and CFP, academics have stated that a contingency viewpoint must be used for uncovering the context and conditions which catalyse the relationship between both constructs. Design/methodology/approach This study acquired the CSR data from 100 companies listed in Fortune’s most admired US companies between 2007 and 2016. These data were used to investigate the CSR–CFP link with the help of the dynamic panel data system, which is the generalised method of moments (GMM) estimator. Findings The results indicate that CSR and CFP have a neutral relationship which characterises the effect between CFP and CSR. However, this study found that financial slack positively affected the CSR–CFP relationship, implying that companies will only benefit from CSR activities if they have excess financial resources. Originality/value This study offers a very distinctive perspective regarding the CSR–CFP link according to the financial slack perspective.

THE ROLE OF INSTITUTIONAL QUALITY IN THE RELATIONSHIP BETWEEN FDI AND ECONOMIC GROWTH IN VIETNAM: EMPIRICAL EVIDENCE FROM PROVINCIAL DATA

2019 ◽  
Vol 64 (03) ◽  
pp. 601-623 ◽  
Author(s):  
NGUYEN VAN BON
Keyword(s):  
Economic Growth ◽  
Positive Impact ◽  
Estimation Method ◽  
Institutional Quality ◽  
Economic Activities ◽  
Fdi Inflows ◽  
Important Message ◽  
The Impact ◽  
The Relationship

All investigations into the role of institutions in the relationship between foreign direct investment (FDI) and economic growth conclude the impact of interaction between FDI and institutional quality on economic growth is significantly positive. Contrary to the conclusion of these studies, this paper finds it is significantly negative for a panel data of 43 provinces in Vietnam over the period 2005–2012 via the estimation method of difference panel GMM Arellano–Bond. In addition, the estimated results also show: (1) FDI inflows significantly foster economic growth; (2) Good institutional quality has a significantly positive impact while bad institutional quality has a negative albeit insignificant effect on economic growth. From the policy perspective, these findings signal an important message to developing countries that governments should carefully adjust policies and institutions because aside from attracting more FDI inflows and promoting the economic activities, it can also be detrimental to economic growth.

scholarly journals TRADE OPENNESS AND ECONOMIC GROWTH: A CAUSALITY TEST IN PANEL PERSPECTIVE

2017 ◽  
Vol 17 (2) ◽  
Author(s):  
Jamilah Idris ◽  
Zulkornain Yusop ◽  
Muzafar Shah Habibullah
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Method Of Moments ◽  
Purchasing Power Parity ◽  
Trade Openness ◽  
Estimation Method ◽  
Dynamic Panel Data ◽  
Dynamic Panel ◽  
General Method Of Moments ◽  
General Method

Openness to trade has been one of the primary drivers stimulating growth. The goal of this particular study is to investigate the relationship between trade openness and economic growth in 87 selected countries which includes both Organizations for Economic Co-operation and Development (OECD) and developing countries for 1977–2011 periods. We used two measures of trade openness i.e. the ratio of trade openness (TO) typically spoke by exports plus imports in nominal value divided by GDP (nominal) which is commonly used in the literature, and trade openness in real (RO) which is defined as the sum of imports and exports in US$ relative to GDP in purchasing power parity US$ (real GDP). An empirical studywas conducted to determine the causal relationship between trade openness and growth in a panelperspective. We used a dynamic panel data estimation method i.e. the general method of moments (GMM). The empirical results reveal a bidirectional causal relationship for both developing and OECD countries. Our finding is consistent with the endogenous theory that increased openness leads to higher growth, which thus prompts expanded openness.Keywords: Openness; Economic Growth; Dynamic Panel General Method of Moments (GMM).

The relationship between urbanization and economic growth

2018 ◽  
Vol 45 (2) ◽  
pp. 316-339 ◽  
Author(s):  
Ha Minh Nguyen ◽  
Le Dang Nguyen
Keyword(s):  
Economic Growth ◽  
Causal Relationship ◽  
Dynamic Model ◽  
Estimation Method ◽  
Static Model ◽  
Dynamic Panel Data ◽  
Content Type ◽  
Non Linear ◽  
Asean Countries ◽  
The Relationship

Purpose The purpose of this paper is to examine the relationship between urbanization and economic growth in ASEAN countries for the period 1993-2014. Design/methodology/approach The Granger causality test and the regression estimation method with static and dynamic panel data (FE, RE, Driscoll and Kraay, D-GMM and PMG) were used. The sample includes seven ASEAN countries: Brunei, Cambodia, Indonesia, Malaysia, Philippines, Thailand and Vietnam. Findings The results show that at least a causal relationship exists between urbanization and economic growth and urbanization positively impacts economic growth. However, the relationship between urbanization and economic growth is non-linear. The urbanization reaches a threshold after which it may impede the economic growth. The estimated threshold is 69.99 percent for the static model and 67.94 percent for the dynamic model. Research limitations/implications The evidence from this study suggests that there is a non-linear relationship between urbanization and the economic growth. Urbanization has the potential to accelerate the economic growth, and this potential will depend on the establishment of favorable institutions and investments in appropriate public infrastructure. Practical implications The decision on the model of urbanization needs to be based on social and environmental considerations as well as market-based economic efficiency. The quality of urbanization manifests in the way that people and businesses perceive when they come to cities and their position in the labor market, urban housing, niche commodity markets, supply chain, collaborative network and physical space for the operation of the business. Most ASEAN countries have not yet reached a high level of urbanization, despite having a number of policies for promoting urbanization to contribute to the economic growth. However, policymakers should find ways to facilitate the development of urbanization that contributes to economic growth, employment growth, environmental sustainability, rather than the pursuit of speeding up the process of urbanization. Originality/value Between urbanization and economic growth at least a causal relationship exists. Urbanization positively impacts economic growth. However, the relationship between urbanization and economic growth is non-linear. The urbanization reaches a threshold after which it may impede the economic growth. The estimated threshold is 69.99 percent for the static model and 67.94 percent for the dynamic model.

Sign in / Sign up

Export Citation Format

Share Document