This study provides evidence on the role of financial development in accounting for economic growth in low- and middle-income countries classified by geographic regions. To document the relationship ...between financial development and economic growth, we estimate both panel regressions and variance decompositions of annual GDP per capita growth rates to examine what proxy measures of financial development are most important in accounting for economic growth over time and how much they contribute to explaining economic growth across geographic regions and income groups. We find a positive relationship between financial development and economic growth in developing countries. Moreover, short-term multivariate analysis provides mixed results: a two-way causality relationship between finance and growth for most regions and one-way causality from growth to finance for the two poorest regions. Furthermore, other variables from the real sector such as trade and government expenditure play an important role in explaining economic growth. Therefore, it seems that a well-functioning financial system is a necessary but not sufficient condition to reach steady economic growth in developing countries.
This paper extends the line of research attempting to link innovation to economic growth by addressing some unexplored questions. Using global patent data, this paper empirically investigates the ...importance of both the quantity and quality of innovation on economic growth, controlling for past measures of inventive inputs. Moreover, our research examines how innovation inputs can be translated into per capita growth under the various economic structures and stages of economic development. Based on a sample of 58 countries for the period 1980–2003, our empirical results indicate that countries hosting firms with higher quality patents also have higher economic growth. Furthermore, we have some evidence that those countries that increase the level of patenting also witness a concomitant increase in economic growth.
Using the data of Chinese industrial enterprises, we examine how the incentive to reach GDP growth targets affects the local firms' capacity utilization. We find that Chinese economic growth targets ...exhibit a persistent pattern of top-down amplification along different jurisdiction levels, which is associated with a decline in local firms' capacity utilization. Moreover, the effect of amplified targets on overcapacity is more pronounced (1) when officials utilize hard-constraint vocabulary in setting the economic growth target, (2) during the National Congress of Communist Party, and (3) when the age of prefecture-level officials is close to 55. We also find officials intervene local firms' capacity decisions by increasing private communication with local entities and loosening public policies for local firms within their jurisdictions. Further results show that the amplification of economic targets is detrimental to future development of both regional economy and local firms.
•Chinese economic growth targets exhibit a persistent pattern of top-down amplification along different jurisdiction.•The top-down amplification of economic growth targets is associated with a decline in local firms' capacity utilization.•Officials intervene firms' capacity decisions by increasing private communication with local entities and loosening public policies for local firms.•The amplification of economic targets is detrimental to future development of both regional economy and local firms.
The New Growth Evidence Temple, Jonathan
Journal of economic literature,
03/1999, Letnik:
37, Številka:
1
Journal Article
Recenzirano
Why do growth rates differ? This paper surveys the recent empirical literature on economic growth, starting with a discussion of stylized facts, data problems, and statistical methods. Six research ...questions are emphasized, drawing on growth and convergence research. In answering these questions, the paper argues that efficiency has grown at different rates across countries, casting doubt on neoclassical models in which technology is a public good. The latter half of the paper rounds up a variety of findings before providing answers to all six questions, including a short summary of how differences in growth rates arise.
A new data set of on openness indicators and trade liberalization dates allows the 1995 Sachs and Warner study on the relationship between trade openness and economic growth to be extended to the ...1990s. New evidence on the time paths of economic growth, physical capital investment, and openness around episodes of trade policy liberalization is also presented. Analysis based on the new data set suggests that over the 1950–98 period, countries that liberalized their trade regimes experienced average annual growth rates that were about 1.5 percentage points higher than before liberalization. Postliberalization investment rates rose 1.5–2.0 percentage points, confirming past findings that liberalization fosters growth in part through its effect on physical capital accumulation. Liberalization raised the average trade to GDP ratio by roughly 5 percentage points, suggesting that trade policy liberalization did indeed raise the actual level of openness of liberalizers. However, these average effects mask large differences across countries.
The article explains the importance of the emerging movement for EU digital constitutionalism (EUDC), which reflects a Union-wide effort to address through regulation the challenges posed by ...digitalisation. The article outlines the core legislative acts that have been introduced by proponents of EUDC. It describes why EUDC is important for fundamental rights protection and European foreign policy, and how the ‘Brussels effect’ extends the impact of EUDC. It enquires into whether EUDC is sustainable, taking into consideration waning EU global influence and the need for economic growth. The EU needs to strike a balance between fundamental rights protection and economic growth. The proportionality principle is the right tool for this. A proportional approach should be followed in establishing a transatlantic digital accord with the US—an agreement on the basic principles governing the digital space. A more proportional approach will pave the way to such an agreement—giving EUDC a global scope.
This study explores the relationship between economic growth and CO2 emissions in the so-called European Union 5 (EU-5) countries (Germany, France, Italy, Spain, and the United Kingdom) for the ...1985–2016 period. In doing so, we employ a carbon emission function to investigate the environmental Kuznets curve phenomenon, which describes a relationship between economic growth and environmental degradation. The empirical results confirm the existence of an N-shaped relationship between economic growth and CO2 emissions in the EU-5 countries. We incorporate additional variables such as renewable electricity consumption, trade openness, natural resource abundance, and energy innovation to augment the carbon emission function. Renewable electricity consumption, natural resources, and energy innovation improve environmental quality, while trade openness and the interaction between economic growth and renewable electricity consumption exert a positive impact on CO2 emissions. This study is novel in that it presents an interaction between economic growth and renewable electricity consumption. We also confirm the need for renewable energy regulations related to increasing renewable sources and promoting energy innovation to reduce the negative effects of energy and fossil energy resources on environmental degradation.
•The N-shaped EKC relationship exists between economic growth and CO2 emissions.•Renewable electricity consumption exerts negative effect on carbon emissions.•Natural resource availability improves environmental quality.•Economic growth/renewable electricity consumption relation increases CO2 emissions.
•COVID-19 has exposed major faultlines and fragilities in current systems.•A structural-unruly duality characterises emergence, progression and impact.•Mainstream development thinking and practice ...are part of the problem.•Transformations are needed in science-policy, economies and governance.•Resilience, equity, diversity, care and inclusive politics are required.
COVID-19 is proving to be the long awaited ‘big one’: a pandemic capable of bringing societies and economies to their knees. There is an urgent need to examine how COVID-19 – as a health and development crisis - unfolded the way it did it and to consider possibilities for post-pandemic transformations and for rethinking development more broadly. Drawing on over a decade of research on epidemics, we argue that the origins, unfolding and effects of the COVID-19 pandemic require analysis that addresses both structural political-economic conditions alongside far less ordered, ‘unruly’ processes reflecting complexity, uncertainty, contingency and context-specificity. This structural-unruly duality in the conditions and processes of pandemic emergence, progression and impact provides a lens to view three key challenge areas. The first is how scientific advice and evidence are used in policy, when conditions are rigidly ‘locked in’ to established power relations and yet so uncertain. Second is how economies function, with the COVID-19 crisis having revealed the limits of a conventional model of economic growth. The third concerns how new forms of politics can become the basis of reshaped citizen-state relations in confronting a pandemic, such as those around mutual solidarity and care. COVID-19 demonstrates that we face an uncertain future, where anticipation of and resilience to major shocks must become the core problematic of development studies and practice. Where mainstream approaches to development have been top down, rigid and orientated towards narrowly-defined economic goals, post-COVID-19 development must have a radically transformative, egalitarian and inclusive knowledge and politics at its core.
We propose a new measure of the economic importance of each innovation. Our measure uses newly collected data on patents issued to U.S. firms in the 1926 to 2010 period, combined with the stock ...market response to news about patents. Our patent-level estimates of private economic value are positively related to the scientific value of these patents, as measured by the number of citations the patent receives in the future. Our new measure is associated with substantial growth, reallocation, and creative destruction, consistent with the predictions of Schumpeterian growth models. Aggregating our measure suggests that technological innovation accounts for significant medium-run fluctuations in aggregate economic growth and TFP. Our measure contains additional information relative to citation-weighted patent counts; the relation between our measure and firm growth is considerably stronger. Importantly, the degree of creative destruction that is associated with our measure is higher than previous estimates, confirming that it is a useful proxy for the private valuation of patents.
External Debt and Economic Growth Kharusi, Sami Al; Ada, Mbah Stella
Journal of economic integration,
03/2018, Letnik:
33, Številka:
1
Journal Article
Recenzirano
Odprti dostop
This study investigated the relationship between government external borrowing and economic growth, prompted by continuous increases in Oman's external debt to finance its annual budget. Time series ...data for the period 1990~2015 were collected from the World Bank and the Central Bank of Oman. The study employed the Autoregressive Distributed Lag cointegration approach explain the error correction mechanism to ascertain the short-run dynamic nature of external debt and economic growth. Consistent with some existing empirical evidence, the study reveals a negative and significant influence of external debt on economic growth in Oman. Further, gross fixed capital was found to be positively significant in determining growth performance in Oman. The study, therefore, recommends a more productive use of the external debt fund in order to affect positive growth.