Abstract

This study estimates the impact of climatic factors on developing countries income level by incorporating the geographic, demographic and climatic variable. The correlation between these variables indicated significant relationship among these variables with expected direction through different linkage. First Ordinary Least Square regression is estimated by adding one or more variable then the model with two Stage Least Square is used to solve the endogeneity problem caused by institution quality by taking energy production and mortality rate as an instrument variables. Results indicated population growth and temperature has negative and significant impact on per capita GDP while precipitation, carbon dioxide and institution has positive impacts while variable for latitude dummy is insignificant.

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