Capita GDP Growth Research Articles

Does the location and the institutional background matter in convergence modelling of the EU regions?

The paper focuses on the testing of regional income convergence of NUTS2 EU regions during the 2000–2011 period with the emphasis on conditional income convergence using both non-spatial and spatial approaches. In order to examine the fact that the per capita GDP growth rate in one region may be associated with the growth rate in neighbouring regions, our empirical part begins with the Exploratory Spatial Data Analysis (ESDA). This preliminary analysis based on the ESDA tools has suggested the appropriateness of the spatial aspect in income regional convergence modelling. Following these results, we proceed with the estimation of the beta-convergence models for purpose of verifying various absolute and conditional convergence hypotheses. The estimation of the income convergence models confirmed that the spatial dependence among regions does matter. We have also employed the dummy variable corresponding to the former political orientation of the regions in order to test the conditional convergence hypothesis assuming that it controls for different country specific factors. The incorporation of the dummy variable enabled us to assess the speed of convergence and the half-life time separately for two groups of regions under the consideration (post-communist or not). Almost all hypotheses of the analysed convergence models were confirmed. The inclusion of spatial effects to the models always led to worsening of the convergence characteristics. Overall, the results of our analysis imply that convergence process is not determined only by a region’s initial income and other specific factors but also essentially by its neighbourhood region’s growth performance.

Does Domestic Energy Consumption Affect GDP of a Country? A Panel Data Study

The present study is an attempt to test the relationship between energy consumption, energy efficiency, CO2 Emissions and economic growth for a set of some developed, transition and developing counties. For this purpose, panel data on various factors of GDP growth has been taken for 18 developing, 16 transition and 18 developed countries from 1980–2013. The paper uses the variant of Solow model to provide the economic justification behind the econometric estimation of regression model which includes energy consumption per capita, CO2 emissions and energy efficiency as one of the independent variables affecting GDP growth of a country, among others. To estimate the regression model, the study uses various panel data estimation methodologies such as: panel data cointegration, panel causality (assuming homogeneous and heterogeneous panels), panel VECM, panel VAR and panel data ARDL and SURE. The results help us to find out he short run and long-run relationship between the policy variables. The paper also tests the direction of causality between energy consumption and GDP and per capita GDP growth by working on the following hypotheses:(a) Neutrality Hypothesis, which holds that there is no causality (neither direction) between these two variables; (b) Energy conservation hypothesis, which holds that there is evidence of unidirectional causality from GDP growth to energy consumption; (c)Growth hypothesis, energy consumption drives GDP growth; and (d) Feedback hypothesis, which suggests a bidirectional causal relationship between energy consumption and GDP growth. S-shaped relationship between energy consumption and per capita GDP is also tested by hypothesizing that with high GDP, first energy consumption increases at an increasing rate and then increases at a decreasing rate. The overall conclusion emerges from the analysis is that per capita energy consumption has a negative impact on growth of per capita GDP in developing countries and transition economies but positive impact in case of developed countries. This may be due to the fact that in developed nations, the energy consumption expenditures may be more devoted to technological progress in alternative source of oil like shell gas or in expenditures related to renewable energy intensive technological products. The developing and transition countries although trying to put efforts in increasing expenditures in alternative energy sources like non-renewable, oil consumption still seem to not have many alternatives sources of energy. Therefore, reducing oil expenditures tend to promote growth among developing countries. Growth, Energy Conservation and Feedback hypotheses tend to work for developed, transition and developing countries. Also, the direction of causality may run from growth per capita to energy consumption depicting a S-shaped relation signifying that as society matures energy consumption increases but at a decreasing rate.

An interactive environmental model for economic growth: evidence from a panel of countries.

This study aims to determine an interactive environmental model for economic growth that would be supported by the "sustainability principles" across the globe. The study examines the relationship between environmental pollutants (i.e., carbon dioxide emission, sulfur dioxide emission, mono-nitrogen oxide, and nitrous oxide emission); population growth; energy use; trade openness; per capita food production; and it's resulting impact on the real per capita GDP and sectoral growth (i.e., share of agriculture, industry, and services in GDP) in a panel of 34 high-income OECD, high-income non-OECD, and Europe and Central Asian countries, for the period of 1995-2014. The results of the panel fixed effect regression show that per capita GDP are influenced by sulfur dioxide emission, population growth, and per capita food production variability, while energy and trade openness significantly increases per capita income of the region. The results of the panel Seemingly Unrelated Regression (SUR) show that carbon dioxide emission significantly decreases the share of agriculture and industry in GDP, while it further supports the share of services sector to GDP. Both the sulfur dioxide and mono-nitrogen oxide emission decreases the share of services in GDP; nitrous oxide decreases the share of industry in GDP; while mono-nitrogen oxide supports the industrial activities. The following key growth-specific results has been obtained from the panel SUR estimation, i.e., (i) Both the food production per capita and trade openness significantly associated with the increasing share of agriculture, (ii) food production and energy use significantly increases the service sectors' productivity; (iii) food production decreases the industrial activities; (iv) trade openness decreases the share of services to GDP while it supports the industrial share to GDP; and finally, (v) energy demand decreases along with the increase agricultural share in the region. The results emphasize the need for an interactive environmental model that facilitates the process of sustainable development across the globe.

The diversity of socio-economic pathways and CO2 emissions scenarios: Insights from the investigation of a scenarios database

The new scenario framework developed by the climate change research community rests on the fundamental logic that a diversity of socio-economic pathways can lead to the same radiative forcing, and therefore that a given level of radiative forcing can have very different socio-economic impacts. We propose a methodology that implements a “scenario discovery” cluster analysis and systematically identifies diverse groups of scenarios that share common outcomes among a database of socio-economic scenarios. We demonstrate the methodology with two examples using the Shared Socio-economic Pathways framework. We find that high emissions scenarios can be associated with either high or low per capita GDP growth, and that high productivity growth and catch-up are not necessarily associated with high per capita GDP and high emissions.

INDÚSTRIA E CRESCIMENTO: UMA ANÁLISE DE PAINEL PARA OS ESTADOS BRASILEIROS

O objetivo deste trabalho é desenvolver uma investigação empírica para o crescimento do PIB real per capita dos estados brasileiros no período de 1992 a 2009 utilizando dados de painel e estimações por efeitos fixo (EF) e aleatório (EA) e pelo método dos momentos generalizados (GMM). Os resultados econométricos indicam uma relação positiva e significativa entre o PIB da indústria geral e da indústria de transformação, da participação do valor adicionado da indústria geral, mas não da participação do valor adicionado da indústria de transformação para o crescimento econômico dos estados. Além disso, a média dos anos de estudos tem um impacto positivo no crescimento dos estados, e há evidência de que os estados que gastam mais (menos) com custeio e capital têm em média uma menor (maior) taxa de crescimento. Por fim, o desempenho do setor exportador e da inflação nos estados brasileiros não são significativos para explicar as diferenças nas taxas de crescimento.

The Relationship between China’s Population Structure Change in Minority Areas, Economic Growth and Demographic Dividend—Based on an Empirical Analysis of Time Series Data from 1992 to 2012

Because the sustainability of the economic development model has drawn much attention recently, the academic circle and the government have begun to focus on the population of minority areas. In past literature, due to the lack of the positive analysis of the relationship between minority population transition and economic development, and due to sample limitation and other factors, the research result is not very convincing. This paper used the economic convergence theory to establish a theoretical model, and selected the panel data in eight minority-concentrated provinces from 1992 to 2012 to analyze the impact of population transition in these provinces on economic growth. The result reveals a significant positive correlation between investment, human capital, the growth rate of labor and per capita GDP growth, a significant negative correlation between children’s dependency ratio and per capita GDP growth, and an uncertain relationship between elderly dependency ratio and per capita GDP growth. To maximize the democratic dividend, it is necessary to speed up the development of educational undertakings in minority areas, and to accelerate the industrial structure transition of minority areas. It is also important to perfect institutional improvement of minority areas.

Urbanization and Economic Development: A Tale of Two Barriers

In this paper we determine the main driving forces underlying the structural transformation and urbanization process in rapidly industrializing countries. We use a dynamic, small open economy model with an abundant supply of surplus labor in rural areas, two types of traded goods manufactured in urban areas, and barriers to both trade and migration. The model is supplemented with quantitative analysis fitting the data from China, to explore the role that reductions in trade and migration barriers played in China’s growth and urbanization. We find that the primary drivers for real per capita GDP growth are migration cost reduction and skill accumulation. While trade liberalization is important for urbanization during the transition toward China’s admission to the WTO it does not contribute much to real per capita GDP growth. During this transition process, migration cost reduction and TFP changes are also important, accounting for a significant proportion of increased urbanization.

Inequality, Gender Gaps and Economic Growth: Comparative Evidence for Sub-Saharan Africa

A growing body of empirical evidence suggests that inequality-income or gender related-canimpede economic growth. Using dynamic panel regressions and new time series data, this paperfinds that both income and gender inequalities, including from legal gender-based restrictions, arejointly negatively associated with per capita GDP growth. Examining the relationship for countriesat different stages of development, we find that this effect prevails mainly in lower incomecountries. In particular, per capita income growth in sub-Saharan Africa could be higher by as muchas 0.9 percentage points on average if inequality was reduced to the levels observed in the fastgrowingemerging Asian countries. High levels of income inequality in sub-Saharan Africa appearpartly driven by structural features. However, the paper's findings show that policies that influencethe opportunities of low-income households and women to participate in economic activities alsomatter and, therefore, if well-designed and targeted, could play a role in alleviating inequalities.

Education, Human Capital and Economic Growth: Empirical Research on 55 Countries and Regions (1960-2009)

This article constructed a panel data model to investigate the effect of education human capital on economic growth, using the latest education data of 55 countries and regions from 1960 to 2009. Meantime, by subdividing education human capital into higher education, secondary education and primary education, it also examines the effect of different education level on economic growth. Furthermore, while introducing health human capital into the model, we explored the influence of different economic development level and some important historical events. The result shows that in general, education human capital has a significant positive impact on economic growth. The positive impact of higher education on economic growth is especially significant, however, the primary education and secondary education does not have a significant impact on economic growth; as for human capital, life expectancy and per capita GDP growth also showed a significant positive correlation.

Inequality, Gender Gaps and Economic Growth: Comparative Evidence for Sub-Saharan Africa

A growing body of empirical evidence suggests that inequality—income or gender related—can impede economic growth. Using dynamic panel regressions and new time series data, this paper finds that both income and gender inequalities, including from legal gender-based restrictions, are jointly negatively associated with per capita GDP growth. Examining the relationship for countries at different stages of development, we find that this effect prevails mainly in lower income countries. In particular, per capita income growth in sub-Saharan Africa could be higher by as much as 0.9 percentage points on average if inequality was reduced to the levels observed in the fastgrowing emerging Asian countries. High levels of income inequality in sub-Saharan Africa appear partly driven by structural features. However, the paper’s findings show that policies that influence the opportunities of low-income households and women to participate in economic activities also matter and, therefore, if well-designed and targeted, could play a role in alleviating inequalities.

Official development assistance, volatility and per capita real gdp growth in sub-Saharan African countries: a comparative regional analysis

The issue of poor economic performance and growth of sub-Saharan African economies have become so worrisome and this has called for a wide range of research and experts argued in favor of official development assistance as an important catalyst for growth in salvaging the sub-Saharan African economies. Available statistics showed that there has been surge in official development assistance flow into Africa. Specifically, the statistics show that Sub-Saharan Africa has received more official development assistance than any other region reaching 10 times and 15 times of inflow to transition and developed economies respectively over the years. Despite this flow of ODA, sub-Saharan African economies have always witnessed dwindling economic performance. Experts opined that poor economic policies, diversion of official development assistance to unproductive consumption and volatility of aid have been responsible for the ineffectiveness of aid to salvage recipient countries. This study therefore sets out to examine the effectiveness of official development assistance on per capita GDP growth for the different regions in Sub-Sahara Africa. The study first undertakes to establish the existence of official development assistance volatility in the selected countries and examines its effect on per capita growth and as well accounting for policy environment as a channel to the link. The study covers the period 1970–2013 and Thirty-three Sub-Saharan African countries were selected based on data availability. The study employs the panel data co-integration and panel data error correction modelling approach to analyze the relationship between official development assistance and per capita Growth in these regions. The Autoregressive Conditional Heteroschedasticity (ARCH) and the General Autoregressive Conditional Heteroschedasticity (GARCH) models were also used to establish volatility with regards to official development assistance in the countries before the main analysis.ODA was found to have a positive and insignificant effect on West Africa, East Africa and non-oil exporting countries but the effect was positive and significant for Southern Africa, Central Africa and Oil Exporting countries. For West Africa, the effect became significant on growth only when Macroeconomic policy environment variables are captured. The study therefore recommends that government of Sub-Sahara countries embrace foreign international assistance while putting a befitting economically viable macroeconomic environment. And donor agencies should be more concerned in promoting good governance and policy framework in these countries than so much disbursement of ODA as such can undermine productive investment. This however will make the best of the ODA received.

Inequality and Growth: A Heterogeneous Approach

The combination of stagnant growth and high levels of income inequality renewed the debate about whether a more even distribution of income can spur economic activity. This paper tests for cross-country convergence in income inequality and estimates its impact on economic growth with a heterogeneous panel structural vector autoregression model, which addresses some empirical challenges plaguing the literature. We find that income inequality is converging across countries, and that its impact on economic growth is heterogeneous. In particular, while the median response of real per capita GDP growth to shocks in income inequality is negative and significant, the dispersion around the estimates is large, with at least one fourth of the countries in the sample presenting a positive effect. The results suggest that the negative effect is mainly driven by the Middle East and Central Asia and the Western Hemisphere across regions, and emerging markets across income levels. Finally, we find evidence that improved institutional frameworks can reduce the negative effect of income inequality on growth.

Public Expenditure, Demography and Growth: Theory and Evidence from India

Many countries in the developed world are ageing in terms of their distribution of population. Conversely, a number of countries in the south have younger population. India for example, has 60% of its population in the age group of 15-59, with the mean age close to 27 years as of present times. The lower share of population in the higher and lower age brackets make the dependency ratio lower than that of the ageing countries. The economic growth such a large share of working age population can usher in lies at the core of the demographic dividends. However, low human capital, poor health and inadequate physical infrastructure seems to create significant hurdles in the potential growth path such countries can achieve. We investigate through an endogenous growth model applied to the Indian macroeconomic data, as to whether public expenditures in education, health and physical infrastructure are conducive to rapid economic growth commensurate with the projected demographic dividends for India. We deploy a Structural Vector Autoregressive Model on data for shares of public expenditure on education and health as the main pillars of growth of human capital in the country, on the per capita GDP growth rate, the working age population, etc. Importantly, we find that a rise in expenditure on health imparts a positive impact on the working age population through greater participation. However, higher allocations for education and training draws workers away from the labor market in a country with large share of unskilled workers and employment opportunities in the large informal sector.

Austerity and recovery: Exchange rate regime choice, economic growth, and financial crises

Our study investigates the role of the exchange rate regime to explain the empirical link between financial crises and economic activity. We examine the relationship between real per capita GDP growth, exchange rate regimes, and the incidence of crises. Asymmetries are also explored. While exchange rate regimes of all types can promote positive economic growth, disaggregation by region or country type yields significantly different results. Pegged regimes work best for emerging market economies while crawling regimes deliver the greatest boost to economic growth in the G20. However, unlike the extant literature, the foregoing positive influences are offset when economies are in a downturn. An important finding is that exchange rate regimes and financial crises interact. In almost all cases and types of financial crises, pegged regimes exert a negative impact on economic growth even after controlling for several economic factors.

The impact of foreign direct investment and human capital on economic growth: Evidence from Chinese cities

Using a panel of Chinese cities over the period 1991–2010, we examine the determinants of economic growth, focusing on the role of foreign direct investment (FDI) and human capital. Consistent with the predictions of a human capital-augmented Solow model, we find that the growth rate (along the path to the steady-state income level) of per capita GDP is negatively correlated with population growth rate and positively correlated with investment rate in physical capital and human capital. We find that FDI has a positive effect on the per capita GDP growth rate and this effect is intensified by the human capital endowment of the city. The latter suggests that one way that human capital contributes to growth is to serve as a facilitator for technology transfers stemming from FDI. Furthermore, we find some suggestive evidence that the FDI-human capital complementary effect is stronger for technology-intensive FDI than for labor-intensive FDI. Our results are robust to alternative measures of human capital, model specifications, and estimation methods.

The Analysis and the Audit of Enterprises, A New Challenge in Front of Global Crisis Today

A number of studies have tried to explain SME and how they affect economic growth. These studies have mainly taken the role of SME as an engine of economic growth but connected with perfection of the market and institutional role. While various skeptics question the efficiency of SME and their role speaking in favor of large firms (Biggs, 2002). While many studies have assessed the importance of micro SME in economic growth just in the process of industrialization (Snodgrass and Biggs, 1996). Beck, Demirguc-Kunt and Levine (2005) provide the first evidence on the links between SME, economic growth and poverty reduction, using a new database compiled by Ayyagari, Beck and Demirguc-Kunt (2003). According to their per capita GDP growth and employment in manufacturing report from SME, show a strong positive correlation during the 1990-s. DOI: 10.5901/ajis.2015.v4n3s1p460

The impact of UN and US economic sanctions on GDP growth

In this paper, we empirically assess how economic sanctions imposed by the United Nations and the United States affect the target states' GDP growth. Our sample includes 160 countries of which 67 experienced economic sanctions over the period 1976–2012. We find, first, that UN sanctions have a statistically and economically significant influence on the target state's economic growth. On average, the imposition of UN sanctions decreases the target state's annual real per capita GDP growth rate by more than 2 percentage points (pp). These adverse effects last for a period of 10 years and lead to an aggregate decline in the target country's GDP per capita of 25.5%. Comprehensive UN economic sanctions, that is, embargoes affecting nearly all economic activity, trigger a reduction in GDP growth by more than 5 pp. Second, the effect of US sanctions is much smaller and less distinct. The imposition of US sanctions decreases the target state's GDP growth by 0.75–1 pp. This detrimental impact on growth persists for seven years and accounts for an aggregate decline in GDP of 13.4%.

REGIONAL INEQUALITIES IN TURKEY: POST 2001 ERA

This paper examines the path of the regional inequalities in Turkey for the post 2001 period. After the financial turmoil and the sharp downturn in the economy in 2001, Turkey managed to sustain 3.6 % real per capita GDP growth between 2002 and 2014. Even the increase in the GDP is remarkable the way that the growth is distrib- uted at the regional scale is questionable. Originating from the concern on the ability of Turkish regions to equally benefit from the economic growth, regional inequalities are evaluated via regional wage income differences at NUTS II disaggregation for the 2003-2008 period. Even initial set of analysis point out a fall in the regional wage income gaps, a careful interpretation indicate the persistence of the heterogeneous pattern coming from the pre-2001 period. Analysis covering all industries indicates that, out of the 26 sub-regions, 5 of the NUTS II regions in the eastern Turkey move to a group of regions with lower wage income during the 2003-2008 period. Meanwhile neither the high wage region clusters nor the outlier regions acting as geographic transitions do realize a significant movement within the distribution. Results are much or less consistent for manufacturing production as well. In general findings underline a period of ongoing polarization in the wage income at NUTS II level during the post 2001 period in Turkey. Additionally results also highlight the non-randomness of this polarization even at NUTS II disaggregation which once more points out that spatial dependence and spatial heterogeneity works together in Turkey.

Endogeneity and panel data in growth regressions: A Bayesian model averaging approach

Bayesian model averaging (BMA) has been successfully applied in the empirical growth literature as a way to overcome the sensitivity of results to different model specifications. In this paper, we develop a BMA technique to analyze panel data models with fixed effects that differ in the set of instruments, exogeneity restrictions, or the set of explanatory variables in the regression. The large model space that typically arises can be effectively analyzed using a Markov Chain Monte Carlo algorithm. We apply our technique to investigate the effect of foreign aid on per capita GDP growth. We show that BMA is an effective tool for the analysis of panel data growth regressions in cases where the number of models is large and results are sensitive to model assumptions.

Projections of the Impact of Pension Funds on Investment in Infrastructure and Growth in Latin America

This research study has various objectives. First, to highlight the importance of investment in infrastructure on economic growth. Second, to underscore the need for a competitive and transparent process to implement these investments, which must be aimed at efficiency and obtaining a proper balance between private and social benefits. Third, to identify the potential of pension funds as a flow of resources that can be channeled toward the development of infrastructure. And finally, to quantify the impact that the destination of these funds could have on the long-term growth projections of a country. To this end, we conducted an experiment to calculate per capita GDP growth in Latin America if the share of pension fund portfolios in assets related with direct infrastructure investment was increased. For this, we compared an inertial scenario (taking into account the current diversification of portfolios), versus one in which these were increased toward a higher level, in accordance with the regulatory framework of each country. These scenarios are incorporated in an expanded neoclassical growth model, in which GDP depends on the accumulation of traditional factors, plus the introduction of the infrastructure capital stock, which depends in part on the contributions of pension funds. The results of the model show substantial improvements in infrastructure investment and per capita GDP in Peru and Chile by more than 3% by 2050, and by 1.1% in the case of Mexico, and 2.16% in Colombia. The results of this study gives new light to the double importance that pension fund investment in infrastructure might have, generating a complementary relation between the objectives of the pension industry in providing workers with a profitable portfolio with limited risks, and at the same time generating an important contribution to growth in the country, which in the end would result in a greater development of pension funds, in brief, a virtuous circle that is necessary to strengthen.