INVESTMENT IN HIGHER EDUCATION VERSUS ECONOMIC GROWTH – A PROPOSAL FOR THE DECOMPOSITION OF THE MRW MODEL FOR POLAND

Higher education has become an increasingly knowledge-based sector of the present-day economy. The state faces the issues of financing higher education and assessing the effects of investment in the sector of higher education. The aim of this article is to determine the impact of investment expenditure on higher education (including the resources from the EU funds) on Poland’s economic growth as measured by the GDP growth rate. The research hypothesis of the article is that the economic growth that is caused by investment in higher education with the contribution of the EU funds results in a higher GDP growth than in the case when there is no access to such resources. The results of the research indicate that increased investment in higher education, which was the result of the availability of the EU structural funds, influenced the increase in human capital in Poland and raised its impact on the GDP growth rate.

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Taxation, government spending and economic growth: The case of Bulgaria

Journal of Tax Reform ◽

10.15826/jtr.2021.7.3.102 ◽

2021 ◽

Vol 7 (3) ◽

pp. 255-266

Author(s):

G. Ganchev ◽

◽

I. Todorov ◽

Keyword(s):

Economic Growth ◽

Growth Rate ◽

Tax Revenue ◽

Gdp Growth ◽

Real Gdp ◽

Long Run ◽

Gdp Growth Rate ◽

Short Run ◽

The Impact

The objective of this article is to estimate the impact of three fiscal instruments (direct taxes, indirect taxes, and government expenditure) on Bulgaria’s economic growth. The study employs an autoregressive distributed lag model (ARDL) and Eurostat quarterly seasonally adjusted data for the period 1999–2020. Four control variables (the shares of gross capital formation, household consumption, and exports in GDP as well as the economic growth in the euro area) are included in the model to account for the influence of non-fiscal factors on Bulgaria’s real GDP growth rate. The empirical results indicate a long-run equilibrium relationship between Bulgaria’s economic growth and the independent variables in the ARDL. In the short term, Bulgaria’s real GDP growth rate is affected by its own past values and the previous values of the shares of direct tax revenue, exports, government consumption, and indirect tax revenue in GDP. In the long term, Bulgaria’s economic growth is influenced by its own previous values and the past values of the share of household consumption in GDP and the euro area’s real GDP growth rate. Fiscal instruments can be used to stabilize Bulgaria’s growth in the short run but they are neutral in the long run. The direct tax revenue, government consumption, and indirect tax revenue are highly effective and can be used as tools for invigorating and stabilizing Bulgaria’s economic growth in the short run. However, in the long term, the real GDP growth rate can be hastened only by encouraging domestic demand (final consumption expenditure of households) and promoting exports. This research cannot answer the question of whether flat income taxation stabilizes the economy or not, since it does not separate the impact of tax rate changes from the influence of tax base modifications.

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Domestic Debt and Economic Growth in Tanzania

Journal of Economics and Management Sciences ◽

10.30560/jems.v1n1p207 ◽

2018 ◽

Vol 1 (1) ◽

pp. p207

Author(s):

Josephat Lotto ◽

Catherine T. Mmari

Keyword(s):

Economic Growth ◽

Growth Rate ◽

Gdp Growth ◽

Gdp Growth Rate ◽

Domestic Debt ◽

Negative Effect ◽

The Government ◽

The Impact ◽

The Relationship ◽

Positive Effect

The main objective of this paper was to examine the impact of domestic debt on economic growth in Tanzania for the period 1990 to 2015 using Ordinary Least Square (OLS) regression method to estimate the effects. The study finds that there is an inverse but insignificant relationship between domestic debt and the economic growth of Tanzania as measured by GDP annual growth. The inverse relationship between domestic debt and GDP may be caused by different factors such as; increased trend in domestic borrowing, government lenders’ profile dominated by commercial banks and non-bank financial institutions which promotes the “crowding out” effect; the nature of the instruments used by the government ; the improper use of the domestic borrowed funds which may include funding budgetary deficits, paying up principal and matured obligations on debt, developing financial markets as well as fund other government operations. Other control variables relate with the GDP as predicted. For example, Inflation (INF) has a negative effect on the GDP growth rate, but the relationship is not statistically significant, while gross capital formation (GCF) has a positive statistically significant effect on GDP growth rate. Furthermore, foreign direct investment (FDI) showed a positive effect on the GDP growth rate and export (X) has a positive effect on GDP growth rate, and the relationship is statistically significant explaining that if a country applied an export-led growth economic strategy it enjoys the gains of participating in the world market. This means that an increase in export stimulates demand for goods which leads to increase in output, and as a country’s output increases, the economic performance also takes a similar trend. Finally, government expenditure (GE) had a negative effect on the GDP growth rate which may be explained by the increased government expenditures which are funded by either tax or borrowing. Therefore, what is required for countries like Tanzania is to have better debt management strategies as well as prudential financial management while maintaining to remain within the internationally acceptable debt level of 45% of GDP and maintain a GDP growth rate of not less than 5%. It is important for the country to realize from where to borrow from, the tenure, the risks involved and limitations to borrowing and thus set the right balance of combination of both kinds of debt. Another requirement is to properly utilize the borrowed funds. The central government’s objective should be to use the funds in more development-oriented projects that bring positive returns to the economic development. The government should not only create a right environment and policies for investment to attract investment from domestic and foreign sources but also be cautious about the kind of investments that the foreign investors make.

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INVESTMENT AND ECONOMIC GROWTH: THE EXAMPLE OF BOSNIA AND HERZEGOVINA

ACTA ECONOMICA ◽

10.7251/ace2033021b ◽

2021 ◽

pp. 21-41

Author(s):

Jelena Bjelić

Keyword(s):

Economic Growth ◽

Growth Rate ◽

Bosnia And Herzegovina ◽

Foreign Investment ◽

Added Value ◽

Gdp Growth ◽

Gdp Growth Rate ◽

Total Investment ◽

The Impact ◽

The Relationship

An investment is a factor of the economic growth and a mandatory constituent in the majority of development models. This study analyzes the impact of the gross investment on the economic growth in Bosnia and Herzegovina (BiH) for the period 2005-2017, and provides the assessment of the interdependence of investment and a newly added value in industry. The relationship between the foreign investment and the economic growth is also included. The dependent variables are the GDP growth rate and the added value in industry (as % of GDP). The independent variables are the total investment rate (as % of GDP) and the foreign investment rate (as % of GDP). The hypothesis is that the gross investment and the foreign investment are positively correlated with the GDP growth rate. The investments contribute to a higher newly added value in industry. The results show that the gross investment is a significant factor of the economic growth because there is a high significance and positive correlation between the observed variables (the total investment and the GDP growth). This shows that the investment growth stimulates the economic growth in Bosnia and Herzegovina. But the dynamic analysis as an investment-GDP ratio shows oscillations. The impact of investments on the share of the newly added value in industry is insignificant and negative. The results of the dynamic analysis are similar. The relationship between the variables of the foreign investment rates and the GDP growth is significant and positive. Although the foreign investments are not sufficient, they still contribute, to a certain extent, to the economic growth of BiH.

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Investigating the Impact of External Debt on Economic Growth: A Case Study of Pakistan

Journal of Business & Tourism ◽

10.34260/jbt.v4i2.160 ◽

2021 ◽

Vol 4 (2) ◽

pp. 41-51

Author(s):

IRUM SAJJAD ◽

DR. MUHAMMAD AZAM KHAN

Keyword(s):

Economic Growth ◽

Growth Rate ◽

External Debt ◽

Gdp Growth ◽

Policy Makers ◽

Explanatory Variables ◽

Gdp Growth Rate ◽

Augmented Dickey Fuller ◽

The Impact ◽

Adf Test

This article is an attempt to evaluate the effect of external debt on economic growth for during the period of 1980–2016. The Augmented Dickey Fuller (ADF) test is used for determining stationarity, whereas the ADF test results exhibit that the variables used found are . The empirical results indicate that external debt and total debt service have deleterious and statistically significant impacts on GDP growth rate. The other explanatory variables namely human capital by life expectancy, exports, and Foreign Direct Investment (FDI)reveals significantly positive significant influence on GDP growth rate. Appropriate policy should be adopted by the policy makers to reduce external debt, increase volume of exports and enhance more foreign investment, it will boost economic growth in the country.

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Analysis of the Impact of Exchange Rate, Inflation, Export and Import on Gross Domestic Product in Bangladesh

Business Management and Economics Research ◽

10.32861/bmer.512.170.175 ◽

2019 ◽

pp. 170-175

Author(s):

Papi Halder

Keyword(s):

Economic Growth ◽

Growth Rate ◽

Exchange Rate ◽

Gross Domestic Product ◽

Positive Impact ◽

Domestic Product ◽

Gdp Growth ◽

Policy Makers ◽

Gdp Growth Rate ◽

The Impact

This study is about the impact of selected macroeconomic variables on economic growth of Bangladesh. Economic growth of Bangladesh is measured in terms of annual nominal GDP growth rate. Least squared regression model has been employed considering exchange rate, export, import and inflation rate as independent variables and gross domestic product as the dependent variable in this study. The results reveal that export and import have significant positive impact on GDP growth rate. The other variables (exchange rate and inflation) are not significant, indicating that there exists no significant relationship among the variables. The findings will help the policy makers to make policies concerning the country’s economic growth to remain robust in the near future.

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A Johansen Cointegration Test for the Relationship between Remittances and Economic Growth of Japan

Modern Applied Science ◽

10.5539/mas.v11n10p137 ◽

2017 ◽

Vol 11 (10) ◽

pp. 137 ◽

Cited By ~ 2

Author(s):

Suwastika Naidu ◽

Atishwar Pandaram ◽

Anand Chand

Keyword(s):

Economic Growth ◽

Growth Rate ◽

Migrant Workers ◽

Developed Countries ◽

Gdp Growth ◽

Data Set ◽

Economic Growth Rate ◽

Gdp Growth Rate ◽

The Impact ◽

The Relationship

Remittance inflows have been a key stimulus to economic growth of many developing countries. There is scant literature available on the impact of remittance inflows and outflows on the economic growth of the large developed countries. For instance, there is little literature on the impact of remittance inflows and outflows on the economic growth rate of Japan. Hence this research objective of this paper is to investigate the relationship between ‘remittance inflows’ and ‘outflows’ on the ‘economic growth rate’ of Japan. The paper by utilizing the World Bank data set and the econometric model namely the Granger Causality Model to test and analysis the impact of remittance inflows and outflows on the economic growth rate of Japan. The findings show that in the long run, a 1% increase in remittance outflows will decrease GDP growth rate by 0.000793%. In the short run, a 1% increase in remittance outflows and inflows will decrease GDP growth rate by 0.000599% and 0.000327% respectively. The Japanese government should encourage retired Japanese workers to return to the labour market and effectively contribute to the workforce and retired workers can be re-trained so that less foreign migrant workers are needed and this will reduce remittance outflow.

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The Impact of Trade Openness and Export Expansion Grants in Nigerian Economy (1986-2019): New Evidence from Quantile Regression.

10.21203/rs.3.rs-145322/v1 ◽

2021 ◽

Author(s):

Behiye Cavusoglu ◽

Mohammed A. M Usman

Keyword(s):

Economic Growth ◽

Growth Rate ◽

Quantile Regression ◽

Granger Causality ◽

Trade Openness ◽

Gdp Growth ◽

Annual Data ◽

Gdp Growth Rate ◽

Export Expansion ◽

The Impact

Abstract Trade openness and export promotion policies such as export expansion grants are the furthermost competent yardstick for measuring growth and development, approved by various countries since 1970s. Looking at the Nigeria economy whose depends almost largely on external trade is inclusive. Therefore, this analysis explores the effects of trade openness and export expansion grants on Nigerian economy using annual data from 1986-2019. This analysis makes use of coefficient covariance metrics, stability leverage plots and pairwise granger causality and quantile regression to portray the impact of trade openness and export expansion grants on Nigerian economic growth. The outcomes confirm that, there was a positive relationship between trade openness (TOPN) and economic growth (GDPR) in the first and last quantiles (seventh) quantile while the remaining quantiles has negative effect on GDP growth rate of Nigeria and were statistically insignificant during the study era. While the coefficients of export expansion grants (EEXG) have positive effect on GDP growth rate of Nigeria in all quantiles but statistically significant only in sixth as well seventh quantile. Also, the result of pairwise granger causality showed strong bi-directional causality between trade openness and GDPR at 5% level of significance as well as uni-directional causality running from GDPR to export expansion grants. Therefore, it recommended that, Nigerian government should adjust the structure of its trade through concentrating on high value-added products instead of exporting semi-finished goods as well by given more support to domestic industries (such as subsidies, tax holiday, more export expansion grants) to compete internationally. Also, government should maintain stable exchange rate as well policies through effective monetary policies that would reduce inflation rate in the economy in order to attain Nigeria's Economic Recovery and Growth Plan which is in line with SDGs goal of 2023 in Nigeria.

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Impact of External Debt on Economic Growth in Jordan for the Period (2010-2017)

International Journal of Economics and Finance ◽

10.5539/ijef.v11n4p114 ◽

2019 ◽

Vol 11 (4) ◽

pp. 114 ◽

Cited By ~ 2

Author(s):

Khaled Abdalla Moh’d AL-Tamimi ◽

Mohammad Sulieman Jaradat

Keyword(s):

Economic Growth ◽

Growth Rate ◽

Direct Investment ◽

External Debt ◽

Empirical Literature ◽

Gdp Growth ◽

Annual Data ◽

Gdp Growth Rate ◽

Independent Variable ◽

The Impact

The study investigates the effect of external debt on economic growth in Jordan by using annual data for the period (2010-2017) by using external debt as a percentage of gross domestic product (GDP) as an independent variable, and GDP growth rate (A proxy for economic growth) as a dependent variable. The study starts with theoretical literature for the impact of external debt on economic growth, then empirical literature for previous studies that analyze the same relationship, after that analyzing the impact of external debt on economic growth in Jordan during the period (2010-2017). The study finds the same conclusion as previous studies that there is a negative and significant impact of external debt on economic growth during the study period, and recommends relying on other financing methods like foreign direct investment.

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The Impact of Public Expenditure Structure on Economic Growth in Russia

Economic Policy ◽

10.18288/1994-5124-2018-6-8-35 ◽

2018 ◽

Vol 13 (6) ◽

pp. 8-35

Keyword(s):

Economic Growth ◽

Growth Rate ◽

National Economy ◽

Positive Impact ◽

Empirical Studies ◽

Social Spending ◽

Gdp Growth ◽

Gdp Growth Rate ◽

General Government ◽

The Impact

In this paper we estimate the impact of changes in the structure of general government expenditure on GDP growth rate in Russia. We construct two types of models: with expenses as shares of total general government spending and as percentages of GDP. The structural vector autoregression (SVAR) methodology from [Corsetti et al., 2012] has been used. According to our estimates, an increase in the share of productive expenditures (national economy, education and health) has a positive impact on the rate of economic growth, while an increase of the share of non-productive expenditures (national defense and social policy) has a negative effect on the growth rate of GDP. The largest positive effect among productive expenditures belongs to expenditure on the national economy: increasing spending on the national economy by 1% of GDP while maintaining the total expenditure unchanged leads to an increase in GDP growth rate by 1.1 p.p. The second largest effect is produced by expenditure on education: a 1% of GDP increase in this expenditure with constant total spending leads to additional GDP growth of 0.8 p.p. Expenditure on health care has the least positive impact on growth: the effect of its increase is estimated at +0.1 p.p. to GDP growth rate. For defense and social spending the effect is negative: -2.1 p.p. and -0.7 p.p. respectively. The results obtained in this paper are generally consistent with the results in previous empirical studies for Russia based on fiscal multipliers, as well as results in empirical studies with foreign and international data.

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What is the relationship between FDI and economic growth? Evidence from EU15 countries

Zbornik Veleučilišta u Rijeci ◽

10.31784/zvr.8.1.8 ◽

2020 ◽

Vol 8 (1) ◽

pp. 253-281

Author(s):

Vlatka Bilas

Keyword(s):

Economic Growth ◽

Growth Rate ◽

Panel Cointegration ◽

Gdp Growth ◽

Causality Test ◽

Ardl Model ◽

Long Run ◽

Gdp Growth Rate ◽

The Impact ◽

The Relationship

The aim of the paper is to examine the relationship between foreign direct investment (FDI) and economic growth in EU15 countries over the period 2002-2018. EU15 makes a group of countries which entered the EU prior to the biggest enlargement in 2004, namely latest in 1995 (Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden and United Kingdom). Paper findings contribute to the existing literature on the impact of FDI on economic growth. It employs different unit root tests, panel cointegration test (ARDL model) and Granger causality. Estimated panel ARDL model found some evidence that there are long-run equilibrium between LogGDP, LogFDI and LogFDIP series. The rate of adjustment back to equilibrium is between 4.43% and 5.95%. The long-run coefficients are all positive, but not all of them are statistically significant. In case of LogFDIP series long-run coefficients are statistically significant, varying between 0.1226 and 0.4398. These coefficients indicate that 1% increase in LogFDIP (logarithm of FDI to GDP) increases LogGDP between 0.1226% and 0.4398%. Results of Dumitrescu-Hurlin panel causality test indicated that there is only unidirectional causal relationship from GDP growth rate to FDI growth rate, and from GDP growth rate to LogFDIP. Conclusively, there is only a weak evidence that FDI had statistically significant impact on the GDP in EU15 countries.

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