Institutions and economic development: a Granger causality analysis of panel data evidence

Citation

Law, Siong Hook and Lim, Thong Cheen and Ismail, Normaz Wana (2013) Institutions and economic development: a Granger causality analysis of panel data evidence. Economic Systems, 37 (4). pp. 610-624. ISSN 0939-3625

Abstract

This study examines the causal relationship between institutions and economic development using a panel Granger causality test. The study incorporates two institutional datasets, the International Country Risk Guide (ICRG) and World Governance Indicators (WGI). The empirical results based on 60 countries show that there is a bi-directional causality between institutions and economic development. The findings also suggest that causality patterns between institutions and economic performance vary at different stages of income level. Better institutional quality fosters economic development in higher income countries, whereas economic development tends to enhance institutional quality in lower income countries.

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Additional Metadata

Item Type:	Article
Divisions:	Faculty of Economics and Management
DOI Number:	https://doi.org/10.1016/j.ecosys.2013.05.005
Publisher:	Elsevier
Keywords:	Economic performance; Institutions; Governance; Panel Granger causality test
Depositing User:	Nabilah Mustapa
Date Deposited:	27 Apr 2015 02:37
Last Modified:	01 Oct 2015 03:47
Altmetrics:	http://www.altmetric.com/details.php?domain=psasir.upm.edu.my&doi=10.1016/j.ecosys.2013.05.005
URI:	http://psasir.upm.edu.my/id/eprint/28315
Statistic Details:	View Download Statistic

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