Objectives: The main objectives of the study include, to identify whether there is any direct impact of labor, capital/investment, technological advancement and institutional quality on economic growth; understanding the marginal effect of capital and technological advancement for different levels of institutional quality; determining how these relationships vary on the group of countries based on their income groups – poorer to richer. Method: Panel data for the period 2006–2020 and 40 countries was considered for the analysis. In order to examine the relationships for all the countries, fixed effect OLS was applied. In addition, to identify the nature of the relationships for the countries based on their income group, quantile fixed effect regression was conducted. To control the time effect, the variable, year, was considered as dummy variable. Findings: The study finds that the rate participation of the labor force negatively impacts economic growth whereas institutional quality, capital formation, and advancement of technology positively impact economic growth. The study also finds that the relationship between economic growth and labor, capital, R&D and institutional quality vary across the income group of countries. In case of the 10th quantile, that is the lowest income group countries, none of the independent variables have been found to be impacting the dependent variable, economic growth. This statement has been found true for the two subsequent upper groups of countries – that is for 25th and 50th quantile – as well. However, in the case of 75th and 90th quantile, institutional quality has been found to impact economic growth positively.The positive impact, however, has been found decreasing with increasing of income group of countries. On the other hand, the findings of the study implies that the impact of capital on economic growth will likely to be significant with gradual improvement in the quality of institutions and it has been the case for all the income group countries. In addition, the study finds, the impact of advancement of technology on economic growth gradually decrease with the improvement of institutional quality. Other than this lowest income group of countries, for all other income group countries, the impact of technological advancement tends to have a positive impact with the gradual improvement of the quality of institutions of an economy.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:sh-48329 |
| Date | January 2022 |
| Creators | Abdullah, Nahian Bin |
| Publisher | Södertörns högskola, Nationalekonomi |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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