Domestic Product Growth Rate Research Articles

Empirical Analysis of the Impact of Debt Servicing on the Performance of the Nigerian Economy

The study interrogates the impact of debt servicing on the performance of the Nigerian economy. Using yearly time series data from 1980 to 2022 obtained from Debt Management Office, Central Bank of Nigeria and the World Bank National Account. The dependent variable in the model was Growth Rate of Gross Domestic Product (GRGDP), and the explanatory variables were External Debt Service (EDS), Domestic Debt Service (DDS), Interest Rate (INR) and Exchange Rate (EXR). The methodology utilized was the popular Auto-Regressive Distributed Lag (ARDL) model. Findings reveal that in the long run, EDS has a positive though insignificant nexus to GRGDP. For DDS the relationship is a significant negative association with GRGDP. Whilst for Exchange Rate a positive and significant relationship was found. INR had a positive but insignificant nexus to GRGDP. Based on the findings the study recommended the review of Nigeria’s debt sustainability plan, imposition of strict limits on amount to borrow, type and the sources from where to borrow. Also, Nigeria government should ensure that debt or borrowings are channeled towards project that are self-liquidating and infrastructure development as well as minimize the use of huge debt to finance recurrent expenditures.

The Validity of Electricity Consumption as an Indicator for Economic Evaluation: Cross-Country Analysis

Abstract: This article aims to investigate the validity of using electricity consumption as an indicator to evaluate economic conditions and explore the relationship of this indicator across different countries. The study reveals a positive correlation between electricity consumption and the growth rate of Gross Domestic Product (GDP), which becomes more significant in the post-21st century period for middle-income, high-income countries, and globally. The relationship between the growth rate of industrial value-added and electricity consumption exhibits dynamic variations. It weakens for lower-middle-income countries but strengthens for upper-middle-income and high-income countries in the post-21st century. Moreover, there is a strong positive correlation between the logarithm of GDP and the logarithm of electricity consumption, particularly pronounced for high-income countries, with a significant increase in correlation in the 21st century. Similarly, a strong positive correlation exists between the logarithm of industrial value-added and the logarithm of electricity consumption, especially notable for high-income countries where the correlation further intensifies in the post-21st century. In conclusion, electricity consumption can serve as an effective indicator for evaluating economic conditions, with its relationship to economic growth and industrialization influenced by the income level of countries.

Static and Dynamic Modeling of Non-Performing Loan Determinants in the Eurozone

The issue of non-performing loans (NPLs) in a bank’s portfolio is important for a bank’s stability and sustainability. Their increased presence indicates a potential worsening of the economy and a lower quality of the bank’s assets. We estimated determinants of non-performing loans in the Eurozone for quarterly data 2015–2020. The results confirmed spatial spillover effects within Eurozone countries, which means that when a shock happens in one country in the Eurozone, it will also affect the other economies of the Eurozone area. Based on the Hausman test, a fixed-effects model was chosen as appropriate and showed that bank-specific and macroeconomic determinants significantly affect NPLs in these economies. In relation to previous studies that dealt with this issue, a co-integration analysis was introduced. A significant impact of return on assets, return on equity, and the loan-to-deposit ratio, as well as the gross domestic product, inflation, and exchange rate on NPLs in the short run and long run, was confirmed using a Pooled Mean Group (PMG) estimator. Bank management should customize credit policy based on both internal and external conditions to improve their performance, focusing on enhancing profitability and maintaining a lower loan-to-deposit ratio to reduce NPLs. The research suggests that a higher gross domestic product (GDP) growth rate is associated with fewer NPLs, while inflation uncertainty and a volatile exchange rate can increase NPLs, highlighting the importance of adjusting strategies to the macroeconomic landscape.

Macroeconomic Determinants of Foreign Direct Investment Inflow in Laos

This study aims to study macroeconomic determinants of foreign direct investment inflow in Lao PDR, which includes macroeconomic variables such as gross domestic product growth rate (GDPGRO), government investment spending (GI), exchange rate (EXR), inflation rate (IFR), interest rate (IR), openness trade (OPTR) and money supply (MS) from 2001-2022. This results found that: The foreign direct investment inflow has 12,298.57 million US dollars on an average per year is equal to 559.03 million US dollars and has an average growth rate of 4.73% per year, for the public expenditure used to investment is increasing every year with an average growth rate of 10.96% per year. The exchange rate of kip per US dollar has an increasing trend but overall there is a growth rate equal to 1 digit only in 2022 there is a growth rate equal to 2 digits which is equal to 45.94%. For the inflation, the growth rate is 6.33% per year, which is the year with the lowest inflation rate is 2017 which is equal to 0.83% and the year with the highest inflation rate is 2022 which is equal to 22.96%, The decreasing trend in which the year with the highest interest rate on US currency loans is 2002 which is equal to 13.5% and the year with the lowest interest rate on US currency loans is 2011 which is equal to 8.15%, the open trade has an increasing trend. The year with the highest increase in 2021 is equal to 77.91% of GDP and the money supply is increasing every year. For the analysis of macroeconomic factors to foreign direct investment, it was found that the economic growth rate of gross domestic product (GDPGRO), public investment expenditure, the exchange rate of kip per US dollar and the money supply have a positive coefficient and reject the null hypothesis with a statistical significance level of 0.01 and 0.05 indicates that it is a doubtful factor for foreign direct investment to increase. Meanwhile, the inflation rate has a negative coefficient and rejects the null hypothesis at a statistical significance level of 0.05, which is a factor that reduces foreign direct investment transfers. For the interest rate in dollars and the open trade, there are accepted null hypothesis, it shows that there is no effect on the transfer of foreign direct investment.

The Public Debt Conundrum: Unpacking Its Effects on Nigeria’s Economic Progress

The study assessed the effect of public debt on economic progress in Nigeria from 1986 to 2022. It investigates the connections among gross domestic product growth rate which is used to measure economic progress, domestic debt, external debt, gross capital formation and exchange rate to throw light on their effect on the path of economic progress of Nigeria. Employing ARDL method, with data sourced from Central Bank of Nigeria Statistical Bulletin and World Bank Development Indicators. Findings reveals that domestic debt and external debt had a positive insignificant short-term effect on Nigeria’s economic progress and both domestic and external debt have an adverse effect on Nigeria’s economic progress in the long term. Also, gross capital formation had an adverse insignificant effect both in the short and long term, exchange rate had a negative insignificant short-term effect, but its long run effect was positive and significant on Nigeria’s economic progress. A long run cointegrating equilibrium relationship was established among the variables in the study. Based on the findings, the study recommends among others that policy makers should manage debt prudently, avoid over reliance on debt as it is only a short-term solution, boost revenue generation and capital formation to drive economic progress and manage exchange rate properly to avoid fluctuations as it has potential to boost Nigeria long-term economic progress.

Assessing the Impact of Fuel Subsidy Removal on Economic Growth in Nigeria: A VECM Approach

The yearly budgetary allocation on subsidy in Nigeria has remained a concern for policymakers and other agents of the economy as to whether it has achieved the targeted goal of economic growth in Nigeria. Thus, this study examined the impact fuel subsidy payments had on economic growth in Nigeria from 2005 to 2023. Secondary data were sourced from the Central Bank of Nigeria (CBN) Statistical Bullentin, the World Bank World Development Indicator (WDI) and the Nigerian Extractive Industry Transparency Initiative (NEITI) working paper. The data were converted into quarterly data for ease of analysis and estimation. Gross Domestic Product (GDP) growth rate was used as the dependent variable while Fuel Subsidy Expenditure (FSE), Exchange Rate (EXC) and Inflation Rate (INF) were the independent variables. The long run relationship among the variables was confirmed using the Johansen Co-integration technique while the Vector Error Correction Model (VECM) technique of analysis was adopted for estimation of the data. The study found that a negative significant relationship exists between fuel subsidy expenditure and economic growth in Nigeria within the period under study. The study therefore recommends a re-direction of government expenditure on subsidy to other critical area of the economy that can propel the growth of the economy.

Credit Risk Management and Profitability of Nepalese Commercial Banks

Banks are an essential component in the economy in the process of creating economic growth in both developed and developing countries. In order to contribute to its commitment to promote growth, banks should be able to lock in on the stability of their financial performance. This study has examined the relationship of credit risk management on performance of Nepalese commercial banks. The descriptive, Correlational research design and review have been adopted for the study. The pooled data of ten commercial banks out of total population of twenty commercial banks operating up to January 2024 has been analyzed. The findings indicate that specific financial indicators, such as credit to deposit ratio, non-performing loan, and interest spread rate, play crucial roles in influencing ROA and ROE. Major issue on non-performing loan and impairment cost were highlighted. Identified that gross domestic product growth rate has an insignificant positive impact on profitability of commercial banks in Nepal. These insights contribute to a deeper understanding of the dynamics within the banking sector, offering valuable implications for stakeholders and policymakers.

The deviation characteristics and influencing factors of urban scaling laws in China: industrial and sectoral perspective

ABSTRACT When facing the complex and enormous system of cities, it is imperative to interpret urban development phenomena in a scientifically rigorous manner. Urban scaling laws describe the logarithmic relationship between the population size of a city and various systemic indicators, providing insights into the reasons behind urban population distribution patterns and scaling characteristics. While research related to urban scaling laws has garnered increasing attention, current studies often focus on revealing the relationships between urban size and economic, social, and infrastructural indicators, neglecting investigations into the relationships between population size and industrial sector indicators. Therefore, this study approaches the topic from the perspective of industries and sectors, employing methods such as ordinary least squares regression and comparative analysis to identify the deviation characteristics of urban scaling laws in China. Additionally, the XGBoost + Shap value modeling method is utilized to discern the factors influencing these deviations. The study findings indicate that from 1988 to 2019, China’s secondary industry scaling index exhibited superlinear growth, while the tertiary industry scaling index demonstrated linear growth, with significant differences observed across various industries. The range of deviation in China’s industry scaling index is relatively large. Among the variables considered, the growth rate of gross domestic product (GDP) exerts the strongest influence on the industry scaling index, followed by urbanization growth rate and urbanization rate. Factors such as population density, per capita national income, and the proportion of secondary industry to GDP also impact industry scaling indices. The research reveals disparities in urban development and suggests responses through urban policy interventions, thereby providing a basis for urban planning and policy formulation.

After the 20th Century: Growth, Convergence and Divergence in Indian Mountainous States

This paper deals with the growth, convergence, divergence and inequalities in the mountainous states of India. The data used in this paper was collected from the RBI site, which covers two decades – the first from 2000-01 to 2010-11 and the second from 2011-12 to 2021-22. By analyzing the data, this study attempted to address the compound annual growth rates with regression equation and concluded that, Meghalaya has the lowest and Sikkim has the highest net state domestic product growth rate for the entire time period (2000-01 to 2021-22). In mountainous states, the average growth rate of per capita net state domestic product declined from 6.13 percent in 2000-01/2010-11 to 4.40 percent in 2011-12/2021-22. Higher per capita net state domestic product growth rates were estimated for Himachal Pradesh, Mizoram, Sikkim, Tripura and Uttarakhand; when compared to the average growth rate for the mountainous states and India as a whole. Over the period 2000-01/2010-11 to 2011-12/2021-22, the states with the highest compound annual growth rates on per capita net state domestic product were Assam and Mizoram. In a detailed analysis of income inequality, the gini coefficient increased from 0.122 to 0.263 during 2000-01 to 2021-22 and the coefficient of variation also showed an increase. The findings revealed that there was a significant presence of σ - divergence, β - divergence and α - divergence in the mountainous states in the first, second decades and throughout the 21st century.

A study on the effect of the growth rate of gross domestic product on some macroeconomic variables

A study on the effect of the growth rate of gross domestic product on some macroeconomic variables

Exploring the Impact of Remittance and Economic Growth on Inflation

This study investigates the influence of remittance income and economic growth on the inflation rate in South Asian Association for Regional Corporation (SAARC) countries. Remittance inflows have a double effect on the economy’s inflation rate: firstly, it increases consumer spending capacity, driving up demand for goods and services, which can lead to higher prices; secondly the influx of foreign currency can cause local currency appreciation, raising import costs and contributing to inflation. While previous studies have focused primarily on how inflation hinders economic growth, this study seeks to understand how economic growth causes inflation from the other side. Economic growth boosts consumer and business spending, increasing demand for goods and services, which can increase prices. Furthermore, higher demand for resources and labor can raise production costs, further contributing to inflation. The correlation between remittance income and inflation has been extensively documented, but the impact of economic growth on inflation remains to be determined. The study is based on descriptive and exploratory research design and driven by a positivist research philosophy. The present study is based on secondary data collected from World Bank reports and the countries’ economic surveys. This study uses an unbalanced panel dataset of 272 data points from eight member countries of SAARC. Basic econometric techniques such as covariance analysis, panel unit root testing, panel autoregressive distributed lag model, and scaled coefficient analysis are employed. The remittance income is only statistically significant at the 10 percent significance level. A one percent increase in remittance income leads to a 0.284 percent increase in inflation over the long run. The growth rate of gross domestic product plays a crucial role in setting inflation. One percent rise in gross domestic product growth leads to a 0.3405 percent increase in inflation in the long term. The error correction term exhibits a negative and statistically significant relationship. The coefficient size suggested that around 65.14 percent of the disequilibrium was rectified in each cycle. The current year’s lagged gross domestic product growth negatively and statistically significantly impacts economic growth. One percent rise in gross domestic product growth led to 0.3308 percent fall in inflation in the short term across SAARC countries. The results indicate that remittance income has a minimal long-term effect on inflation in SAARC nations, whereas gross domestic product growth substantially impacts inflation. Policymakers should prioritize promoting sustainable economic growth to mitigate inflationary pressures effectively.

THE IMPACT OF THE COVID-19 PANDEMIC AND ECONOMIC CRISIS ON THE PERFORMANCE OF LICENSED COMMERCIAL BANKS IN SRI LANKA

Sri Lanka faced an array of incidents starting from the Easter Sunday attack in 2019 to COVID-19 pandemic and the Economic Crisis which caused disastrous effects on the economy. Despite the policy measure taken, the banking sector was severely affected by soaring Non-Performing Loans (NPLs) levels and dwindling profits. Therefore, the main objective of this study is to evaluate the impact created by the series of adverse economic and social issues from 2019 on the performance of the banking sector in terms of profitability and NPLs using a sample of 12 licensed commercial banks. The data were collected from secondary sources such as annual reports issued by the banks and the Central Bank for the period 2013-2022. The impact of the Easter attack, Pandemic, and Economic Crisis are referred to using a dummy variable, inflation, Gross Domestic Product (GDP) growth rate, and interest rate are used to measure the impact of the macroeconomic environment on the banking sector performance and capital adequacy ratio was used as a control variable. Return on Equity, Return on Assets, and NPLs were used to measure the bank's performance. The results of the random effects panel regression models suggest that there is a significant impact of the Pandemic, Economic Crisis, and GDP growth rate on the performance of the banking sector. This research indicates that a country like Sri Lanka needs to take aggressive policy measures to face these adverse situations. It is required to take credit risk mitigation measures and provide quality loans to curtail the adverse impact caused by the NPLs.

Analysing the impact of digital technology diffusion on the efficiency and convergence process of the commercial banking industry of Pakistan

In a dynamic financial ecosystem, digitalisation is supporting banks in revamping their business processes to be more efficient, reducing costs, coping with customers’ evolving demands, and keeping them abreast of market competition. This two-stage research aims to investigate three issues in Pakistan’s banking industry from 2006 to 2020: (i) banking efficiency; (ii) the impact of digitalisation on banking efficiency; and (iii) banking efficiency’s absolute and conditional convergence. In our first-stage analysis, bootstrap data envelopment analysis has been applied, which exhibits bias-corrected overall, pure, and scale efficiencies of 74, 77, and 96%, respectively. In the second-stage analysis, we executed Tobit and two-step dynamic panel data system generalised method of moments (DPDSYS-GMM) models, and the results uncover that digitalisation has a positive influence on banking efficiency. Findings confirm that return on assets, bank size, interest rate, and gross domestic product growth rate have a positive association with banking efficiency. Our research reveals that state-controlled banks outperform their private sector and special-purpose counterparts. Our DPDSYS-GMM findings validate β and σ-convergence, implying that initially, low-efficient banks caught up (converged) to the more efficient opponents, reducing cross-sectional efficiency dispersion and attaining common equilibrium. The findings of banking efficiency conditional β-convergence assert that the adoption of digital technology has played a critical role in the convergence process and that digitalisation has acted as a catalyst for less efficient banks to catch up significantly faster to their more efficient rivals. This study displays digitalisation’s disruptive influence on the overall transformation of Pakistan’s banking system in the modern era, resulting in significant efficiency gains.

The M-Estimator and S-Estimator in Robust Improved Geographically and Temporally Weighted Regression for Modelling GRDP in West Java, Indonesia

The success of development in a region in Indonesia can be measured by economic growth, especially in the financial sector using the Gross Regional Domestic Product (GRDP) growth rate. The GRDP figure at the Regency and City level in West Java is one of Indonesia's highest and most diverse. This is due to various factors, including the geographical location of West Java, which is directly adjacent to DKI Jakarta, which is the center of the national economy. Although classified as high, the diversity of GRDP values between regions in West Java needs attention to equalize economic growth. The diversity of GRDP values can be modeled by the Improved Geographically and Temporally Weighted Regression (I-GTWR) method by taking samples in 2018-2022. The I-GTWR modeling method considers the influence of spatial heterogeneity and spatial-temporal interaction, which has been proven to produce better results than the GTWR method in modeling GRDP in Central Java in 2011-2015. This study also adds M-estimators and S-estimators to improve the model's performance and make it robust to outliers. The explanatory variables we use are Regional Original Revenue, General Allocation Fund, Foreign Investment, Regional Minimum Wage, Domestic Investment, Poverty, Per-Capita Expenditure, and Number of Job Vacancies. The analysis shows that the Robust I-GTWR model, especially the M-estimator, produces better model performance than the I-GTWR model in modeling West Java GRDP. The coefficient of determination made by the Robust I-GTWR method using the M-estimator is 94.62% with a mean absolute deviation value of 0.1491 and an Akaike Information Criterion value of 110.4899.

Analysis of Factors Affecting the Loan Growth of Banks with a Focus on Non-Performing Loans

The purpose of this paper is to investigate the intertemporal relationship between the non-performing loan ratio and bank lending and to analyze factors affecting loan growth using data from Mongolian commercial banks. There has been a lack of research on Mongolian banks’ lending behavior due to their short history. Thus, this paper investigates the effect of the non-performing loan ratio on total loan growth using an ordinary least squares (OLS) regression model with panel data. We used bank-related variables such as the loan-to-deposit ratio, provision-to-gross loan portfolio ratio, equity-to-asset ratio, and liquidity ratio, and economic variables such as the real gross domestic product (GDP) growth rate, interest rate, and inflation rate. The results of this paper show that non-performing loans have a significant negative impact on total loan growth. The implication of this result is that non-performing loans affect banking efficiency, which, in turn, affects financial stability and the real economy. Moreover, high non-performing loans reduce banks’ profits. Also, this paper found that loss reserve and the liquidity ratio have a positive effect on total loan growth, while the effects of the loan-to-deposit ratio and the equity capital ratio were not found to be significant. Additionally, from a macro perspective, the inflation rate has a positive effect on the total loan growth rate, while the interest rate has a positive effect on total loan growth rather than a negative effect. And real gross domestic product (GDP) growth does not affect the total loan growth rate.

Negative impact of democracy on GDP annual growth rate in 2001-2019 and 2020 and mortality rate due to COVID-19 in 2020

The study examines the negative impact of democracy on the GDP annual growth rate in 2001-2019 and 2020 and the morality rate due to COVID-19 in 2020. Whether democracy has deteriorated in the first 20 years of the 21st century in terms of annual gross domestic product (GDP) growth rate and the mortality rate due to COVID-19 was investigated. Using various statistical data and by applying instrumental variable analysis with three instrumental variables. The negative correlation between democratic maturity and GDP growth rate and positive one between democratic maturity and COVID-19 mortality rate in 2020 were found. The same relationships were observed even when the data of China and the United States or those of China and G7 countries were deleted and even when only G20 countries were considered, indicating that this is a common phenomenon in the world. We also proposed that these relationships were casual. The decline in the growth of capital formation, the accompanying decline in the growth of value added in all three sectors, and the decline in the growth of international trade were suggested as the causes of democracy’s deterioration. Negative effects of democracy were also observed when GDP per capita growth rate was used, when democracy indicators proposed by different institutions were used, or when the Great Recession was considered. We confirmed the same negative effect of democracy by considering covariates and using the GDP growth rate in 2021, following the pandemic. This strengthened the conclusion that democracy in the first 20 years of the 21st century has deteriorated in terms of annual GDP growth rate and mortality rate due to COVID-19 in 2020.

Contribution of Population Growth on Economic Growth in Rwanda (1992-2022)

This study examines the impact of changes in population size on economic growth in Rwanda between 1992 and 2022. The research methodology involves the use of secondary data from World Bank development indicators. The key variables analysed include population size, gross capital formation expenditure, and gross domestic product growth rate. A multivariate time series analysis was used to examine the impact of population on economic growth in this study. Diagnostic tests were conducted, and the results indicated that the model was sound. The variables were not significantly affected by heteroskedasticity and serial correlation problems. During the unit root test, it was found that all variables were stationary at the level using intercept and trend. This led to the use of the Ordinary Least Square model. The findings reveal a complex relationship between population dynamics, gross capital formation, and economic growth in Rwanda. The R-squared value was found to be close to one, indicating that population growth and gross capital formation explain economic growth to the greatest extent. The findings from the study showed that population has negative relationship with economic growth. Gross capital formation also plays a crucial role in driving economic growth by facilitating investment activities across different sectors.

ECONOMIC RESILIENCE OF G20 COUNTRIES DURING COVID-19 PANDEMIC AND THE IMPACT OF RESILIENCE ON THEIR ECONOMIC GROWTH

This paper is an effort to understand the aftermath of global health crisis that unleashed economic turbulence, the world over, due to COVID-19. A pandemic of such huge dimension and consequences not only caught everyone unaware but the epitome of science and medicine advancement also could not lessen the speedily advancing health hazards. All countries had to put in Herculean efforts to overcome this crisis but India being the most populous had to face a humongous task. Initially the challenge was how one can resist the economic shock and later it was how fast one can overcome the crisis. This paper compares the performance of Indian economy with some prominent G20 countries with respect to unemployment rate, growth rates, foreign direct investment and economic inequality. We compare 2019, considered as normal year with 2020, the hardest hit year due to Covid 19. We have also tried to explore the resilience index of all G20 countries, by calculating both the resistance index and the recovery index of the crisis. Finally, we explore the impact of resilience index along with household consumption expenditure, capital formation and exports on the growth rate of real Gross domestic product of G20 countries. We adopt an econometric approach, using multiple linear regression for analysis. Based on our analysis, appropriate proposals have been formulated for future course of actions that will enhance the future economic prosperity of G20 countries.

Analysis of the Effects of Money Market Fund Mobilization on the Dynamics of Nigerian Economic Growth

Economic growth is a function of some productive efforts among which savings mobilizations is considered very vital. This study examines savings mobilization strategy and its impact on Nigeria’s economic growth during the year 2001-2022.This is vested with the objectives to investigate the effect of banking density, savings rates and money supply on economic growth. The study relies on time series data sourced from the publication of the Central Bank of Nigeria. Gross Domestic Product Growth Rate (GDPGR) was adopted as dependent variable, while Banking Density (BD), Savings Rates (SR) and Money Supply (MS) were the independent variables. Augmented Dickey Fuller (ADF) unit root test was employed, to test the stationarity. The Auto Regressive Distributive Lag (ADRL) was used to ascertain the relationship between the variables alongside Vector Error Correction Model (VCM). Post estimation diagnostic tools used include Breuch-Godfrey serial correlation LM test and the CUSUM test for stability. From the ARDL, β-coefficient and the associated probabilities were adopted to determine the extent and direction of relationship on economic growth. Data were tested at 5% level of significance; it was discovered that banking density and savings rates affected economic growth positively but with insignificant effects, while money supply affected economic growth negatively with insignificant effect. The study therefore recommends amongst others, that stakeholders, be directed towards entrenching higher banking density as opposed to banking desert, and that money supply should be made dynamic in accordance with economic realities.

Impact of Infrastructure on Economic Growth: A Comparative Analysis of Developed and Developing Countries

The significance of infrastructure for economic growth and the welfare of a country has become a burning issue for the last three decades. This research examines the impact of infrastructure on economic growth across selected developed and developing countries. The dependent variable is economic growth, measured by the growth rate of gross domestic product, and the independent variables to measure infrastructure are transportation, communication, education, and electricity. The data set for analysis is collected from online sources of World Development Indicators for eighteen years (2000-2018). The panel data set of this study is evaluated by constructing fixed and random effects models. The findings reveal that infrastructure plays a significant role in the economic growth of developing countries, with less contribution in the case of developed countries. Because the infrastructure of developed countries is already well established, and if they invest more in infrastructure, the economic growth will rise slightly. So, they invest more in innovations and technology rather than in infrastructure. In developing countries, transportation, communication, and electricity have a positive impact, but education is insignificant in the growth rate. This study's findings align with the Solow Growth Theory, which states that public capital, in which infrastructure is included as necessary input in the production process, contributes to economic growth.