Institutional Quality and Industrial Growth: A Causality Analysis

The research study investigates the causal links between institutional quality and industrial output growth in Nigeria for the periods 1996:Q1-2018:Q4. Institutional quality was delineated into three i.e. economic institution (government effectiveness, regulatory quality, rule of law, and control of corruption), financial institution (contract intensive money, lending rate, and financial deepening), and political institution (voice and accountability, and political stability and absence of violence). The study computed the Granger causality test using both the VECM and the Toda and Yamamoto [1] and Dolado and Lutkepohl [2] (TYDL) augmented VAR procedure. The causality result in the short run showed that none of the institutional quality variables have a causal effect on industrial output growth but the feedback was reported. In the long run, a bi-causal relationship was reported from government effectiveness, control of corruption, financial deepening, and voice and accountability to industrial growth, whereas, a one-way directional relation was found running from industrial growth to regulatory quality and political stability & absence of violence. Thus, there is a need for the government to intensify efforts towards improving the extent people can challenge her power and authority because these play significant roles in the development level of Nigerian industries.

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Increasing Supply of Tradable Goods in the Common Market for Eastern and Southern Africa (COMESA)

Review of Economics and Development Studies ◽

10.26710/reads.v1i2.117 ◽

2015 ◽

Vol 1 (2) ◽

pp. 73-117

Author(s):

Macleans Mzumara

Keyword(s):

Foreign Direct Investment ◽

Rule Of Law ◽

Direct Investment ◽

Institutional Quality ◽

Political Stability ◽

Government Effectiveness ◽

Regulatory Quality ◽

Tradable Goods ◽

And Control ◽

Control Of Corruption

The author investigated the nature of institutional quality in the Common Market for Eastern and Southern Africa (COMESA) on the basis of voice and accountability political stability, government effectiveness, regulatory quality, rule of law and control of corruption. The author further investigated the existence of a link between institutional quality and factors of production. The results show that capital, entrepreneurship and foreign direct investment are the major determinants of production of tradable goods in COMESA. In exception of Mauritius and Namibia (currently no longer a member) the rest of COMESA member states have very poor institutional quality. This affects their ability to attract foreign direct investment hence production of tradable goods. Voice and accountability, government effectiveness, rule of law and political stability play a major role in increasing production of tradable goods in COMESA. Foreign direct investment is affected by voice and accountability, rule of law and political stability than any other factors. Availability of raw material is affected by government effectiveness, regulatory quality, political stability, voice and accountability and control of corruption. Capital is very sensitive to issues of voice and accountability and control of corruption and regulatory quality.

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Assessing the impact of institutions on economic growth in the BRICS countries

BRICS Journal of Economics ◽

10.38050/2712-7508-2021-4-2 ◽

2021 ◽

Vol 2 (4) ◽

pp. 30-46

Author(s):

Ayushi Tiwari ◽

Tridisha Bharadwaj

Keyword(s):

Economic Growth ◽

Institutional Quality ◽

Political Stability ◽

Physical Capital ◽

Government Effectiveness ◽

Brics Countries ◽

Regulatory Quality ◽

And Control ◽

The Impact ◽

Control Of Corruption

This study examines the impact of institutional quality on economic performance in the BRICS countries for the period from 2002 to 2019. The panel data study was estimated using pooled OLS and a fixed effect model. The study employed six institutional quality indicators (Worldwide Governance Indicators) which included voice and accountability, political stability and absence of violence/terrorism, government effectiveness, regulatory quality, rule of law, and control of corruption. The study also controlled for conventional sources of growth, i.e. human capital, physical capital, government expenditure, and inflation. All of these factors were positive and significant in our study. The findings also reveal that government effectiveness, regulatory quality and control of corruption had a positive and significant impact on economic growth in the BRICS countries, whereas other institutional variables turned out to be insignificant.

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Institutional Analysis of Shadow Economy (Study on ASEAN 7 Developing Countries)

Ekuilibrium Jurnal Ilmiah Bidang Ilmu Ekonomi ◽

10.24269/ekuilibrium.v15i1.2373 ◽

2020 ◽

Vol 15 (1) ◽

pp. 55

Author(s):

Ana Rahmawati Wibowo ◽

Wiwin Indrayanti

Keyword(s):

Developing Countries ◽

Rule Of Law ◽

Shadow Economy ◽

Secondary Data ◽

Political Stability ◽

Government Effectiveness ◽

Regulatory Quality ◽

Negative Effect ◽

And Control ◽

Control Of Corruption

This study aims to analyze the institutional variables of governance in ASEAN 7 developing countries. The independent variables consist of Voice and Accountability, Political Stability and Absence of Violence, Government Effectiveness, Regulatory Quality, Rule of Law and Control of Corruption, while shadow economy is dependent variable. The data used in this study are quantitative data and secondary data by using program Stata 14, the analysis technique used is multiple linear regression panel data. The results show that Voice and accountability has a negative and significant effect on the shadow economy as well as Political stability, Government effectiveness and Control of corruption on the other side. Regulatory quality has a positive and significant effect on the amount of shadow economy. Meanwhile, Rule of law no significant effect on the shadow economy. Underlying the results, the study arranges some policy to reduce negative effect of shadow economy.

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Effect of Governance on Educational Performance in Nepal

Journal of Education and Research ◽

10.51474/jer.v11i1.502 ◽

2021 ◽

Vol 11 (1) ◽

pp. 97-114

Author(s):

Jiban Khadka

Keyword(s):

Good Governance ◽

Political Stability ◽

Educational Performance ◽

Line Graphs ◽

Government Effectiveness ◽

Secondary Sources ◽

Multiple Line ◽

Governance Indicators ◽

Regulatory Quality ◽

Control Of Corruption

Good governance often seems to have accelerated educational performance. Stepping onto the contribution of governance to the education, this paper examines the effect of Worldwide Governance Indicators produced by Kaufmann et al. (1999) on Educational Performance (EP) of Nepal during the years from 1996 to 2018. The six indicators of WGIs: political stability and absence of violence, government effectiveness, voice and accountability, regulatory quality, control of corruption and rule of law are used as independent variables, and the educational performance (student learning achievement and education index) as a dependent variable. The results, based on the data collected from the secondary sources, derived from multiple-line graphs and the regression model shows that the majority of WGIs insignificantly explained the educational performance across the years. One indicator namely government effectiveness is found as a negative significant predictor of EP. The findings of this study suggest to reform in the existing level of WGIs for the better educational performance.

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Does Institutional Quality Matter in the Relationship Between Competition and Bank Stability? Evidence from Asia

Journal of Indonesian Economy and Business ◽

10.22146/jieb.v36i3.1428 ◽

2021 ◽

Vol 36 (3) ◽

pp. 283-301

Author(s):

Muizzuddin Muizzuddin ◽

Eduardus Tandelilin ◽

Mamduh Mahmadah Hanafi ◽

Bowo Setiyono

Keyword(s):

Rule Of Law ◽

Negative Impact ◽

Generalized Method Of Moments ◽

Institutional Quality ◽

Political Stability ◽

Bank Stability ◽

Government Effectiveness ◽

The Rule Of Law ◽

Regulatory Quality ◽

The Relationship

Introduction/Main Objectives: This study aims to investigate whether competition impacts bank stability. Furthermore, the study also analyzes the role of institutional quality in a country, such as voice and accountability, political stability, government effectiveness, regulatory quality, the rule of law, and control of corruption, forming the effect of competition on bank stability. Background Problem: Analysis of the relationship between competition and bank stability has been at the center of academic and policy debate. However, the theoretical and empirical research has not concluded whether bank competition leads to more or fewer stable banks. Novelty: We consider institutional quality's role in mitigating the negative impact of competition on bank stability, which has mainly been under-elaborated in prior studies, particularly in using measures from The World Bank’s Worldwide Governance Indicators, which measure how the institutions of each country influence bankers’ and the people's behavior, as part of the cultural system. Research Methods: Using a sample of 427 Asian commercial banks from 2011 to 2019, we employ the generalized method of moments (GMM) estimator and consider loan growth and the cost to income ratio as instrumental variables. Findings/Results: We find robust evidence that competition erodes bank stability. Besides, better institutional quality, especially government effectiveness, regulatory quality, the rule of law, and corruption control in each country are important aspects that promote bank stability and mitigate the negative impact of competition on bank stability. Conclusion: Competition has a negative impact on bank stability. Meanwhile, the quality of institutions can both promote bank stability and mitigate this negative relationship.

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Deciphering African Financial Development Interaction With Institutional Quality And Economic Growth Nexus

ETIKONOMI ◽

10.15408/etk.v20i1.16177 ◽

2021 ◽

Vol 20 (1) ◽

pp. 23-44

Author(s):

Easmond Baah Nketia ◽

Yusheng Kong

Keyword(s):

Economic Growth ◽

Private Sector ◽

Financial Development ◽

Institutional Quality ◽

Political Stability ◽

Estimation Technique ◽

Government Effectiveness ◽

Development Indicators ◽

Regulatory Quality ◽

Domestic Savings

The paper scrutinized the correlation between financial development interaction with institutional quality and economic growth in Africa. The study adopted 30 different interactions. The study used the Augmented mean group estimation technique to estimate the model. Gross domestic savings/GDP and broad money/GDP positively influenced growth with the majority of interactions with institutional quality indicators. Credit to Private Sector/GDP interaction with Voice & Accountability; and Political Stability has a higher impact on growth than any interaction variable. However, government effectiveness, regulatory quality, and corruption control are weak in Africa; even if interacted with financial development indicators, it mostly reduces economic growth. This study recommends that governments in Africa strengthen financial development indicators; Bank Deposit/GDP, Gross Domestic Savings/GDP and Credit to private sector/GDP, and institutional quality indicator political stability & absence of violence since their interaction has proven to aid rapid economic growth.JEL Classification: E17, F62, F63How to Cite:Nketia, E. B., & Kong, Y. (2021). Decipheting African Financial Development Interaction with Institutional Quality and Economic Growth Nexus. Etikonomi: Jurnal Ekonomi, 20(1), 23 – 44. https://doi.org/10.15408/etk.v20i1.16177.

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Economic growth and institutional quality in South East Europe

Ekonomika preduzeca ◽

10.5937/ekopre2102001m ◽

2021 ◽

Vol 69 (3-4) ◽

pp. 1-13

Author(s):

Jelena Minović ◽

Vesna Aleksić ◽

Slavica Stevanović

Keyword(s):

Economic Growth ◽

Rule Of Law ◽

Growth Control ◽

Institutional Quality ◽

Political Stability ◽

Government Effectiveness ◽

The Rule Of Law ◽

East European ◽

South East Europe ◽

Control Of Corruption

The paper researched the causal relationship between institutional quality measures and real gross domestic product growth (GDP) on the South East European (SEE) countries in the period 1996-2016. To achieve the aim of this research the panel techniques (the Dumitrescu-Hurlin noncausality approach) were used. The SEE suffers from very poor control of corruption, as well as significant political instability, the weak rule of law and poor government effectiveness. Our results indicate that there is unidirectional homogeneous causality between political stability and real GDP growth. Control of corruption leads to government effectiveness. The rule of law leads to control of corruption, and government effectiveness to political stability. Additionally, there is a bidirectional homogeneous causality between the rule of law and political stability. Thus, the research found some empirical evidence that stronger institutional measures cause higher economic growth.

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The Moderating Effects of Institutional Qualities and Energy Use on the Economic Output

10.20944/preprints202012.0713.v1 ◽

2020 ◽

Author(s):

Abdulrasheed Zakari ◽

Jurij Toplak

Keyword(s):

Energy Use ◽

Institutional Quality ◽

Political Stability ◽

Moderating Effects ◽

African Countries ◽

Economic Output ◽

Regulatory Quality ◽

Two Factors ◽

Institutional Strategies ◽

Control Of Corruption

Energy and institutional quality are two factors that determine economic output, but these two factors are often neglected in the search for economic output. Therefore, this study examines the relative importance of energy use and its interaction with institutional quality for economic output. We employ a robust econometric estimation technique on a panel sample of 21 African countries between 2002-2019. Our results show that energy use is significant and negatively related to economic output while moderating terms of institutional quality are significantly associated with economic output, but the direction of the association depends on the specific quality. We find the moderating term control of corruption and government effectiveness to be negative and significantly associated with economic output, whilst political stability, regulatory quality, rule of laws, voice, and accountability positively impact. Our results imply that improved economic output is possible when there are specific institutional strategies.

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Corruption, Institutional Quality and Economic Growth in West African Countries (1995-2017)

Journal of Public Administration and Governance ◽

10.5296/jpag.v9i2.14915 ◽

2019 ◽

Vol 9 (2) ◽

pp. 217

Author(s):

Osabiyi, Kolawole Emmanuel ◽

Aiyegbusi Oluwole. Oladipo ◽

OLOFIN, Olabode Philip

Keyword(s):

Economic Growth ◽

West Africa ◽

Institutional Quality ◽

Political Stability ◽

West African ◽

Series Data ◽

Panel Var ◽

African Countries ◽

Regulatory Quality ◽

Control Of Corruption

This study examines the relationship among corruption, institutional quality and economic growth; and analyses the interaction effects of corruption and institutional qualities such as political stability and absence of violence (pv), government effectiveness (ge), regulatory quality (rq), control of corruption (cc), voice and accountability (va), and rule of law (rl) on economic growth (gdp) in West African Countries. Time series data covering the period between 1995 and 2017 were employed with Panel VAR method. Our results showed that corruption (cp) and economic growth are negatively related at lag one, and positively related at lag two, but the results were statistically insignificant. All institutional quality indicators, except ge are negatively related to economic growth at lag one, but at lag 2, positively related except rq, cc, and pv. These results were also statistically insignificant, except that of pv which is statistically significant.Our results also showed that interaction of control of corruption with corruption (cccp); regulatory quality with corruption (rqcp); and political stability and absence of violence with corruption (pvcp) negatively affect economic growth in West Africa both at lag one and two and were statistically insignificant. These results are expected in countries that are poorly rated both in terms of corruption and institutional quality. The study suggests reasonable policy interventions aimed at reducing the incidence of corruption as well as improving institutional quality in West Africa Countries.

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Mediating role of trust in the relationship between public governance quality and tax compliance

Bussecon Review of Social Sciences (2687-2285) ◽

10.36096/brss.v3i4.276 ◽

2022 ◽

Vol 3 (4) ◽

pp. 11-22

Author(s):

Yusuf Mohammed Alkali ◽

Abdulsalam Masud ◽

Almustapha A. Aliyu

Keyword(s):

Rule Of Law ◽

Tax Compliance ◽

Political Stability ◽

African Countries ◽

Public Governance ◽

Government Effectiveness ◽

Regulatory Quality ◽

Governance Quality ◽

Control Of Corruption

This paper examined the mediating role of trust in government on the influence of public governance quality indicators (accountability, political stability, government effectiveness, regulatory quality, rule of law, and control of corruption) on tax compliance in Africa. Cross-country data obtained from 38 African countries for 2015 was used and analyzed using Ordinary Least Squares (OLS) regression analysis. The study found that accountability, political stability, control of corruption, and trust have a significant influence on tax compliance among the sampled African countries, but government effectiveness, regulatory quality, and the rule of law and have insignificant influence on tax compliance. The result of the mediating effects revealed that trust mediates the influence of accountability and political stability on tax compliance in Africa. However, it failed to mediate the influence of government effectiveness, regulatory quality, rule of law, and control of corruption on tax compliance among sample African countries. The study offers theoretical insights on the role of trust as a mediator on social exchange relationships from the context of public governance quality on tax compliance. It also implies to the policymakers that building trust is an important mechanism through which the impact of public governance on tax compliance would be more pronounced. The study further calls for replication of its findings in other continents such as the Americas, Asia, and Europe.

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