Article

Do all countries grow alike?

University of Groningen, Faculty of Economics and Business & CIBIF, 9700 AV Groningen, The Netherlands
Journal of Development Economics (Impact Factor: 2.13). 01/2010; DOI: 10.1016/j.jdeveco.2009.07.006
Source: RePEc

ABSTRACT This paper investigates the driving forces of output change in 77 countries during the period 1970–2000. A flexible modeling strategy is adopted that accounts for (i) the inefficient use of resources, and (ii) different production technologies across countries. The proposed model can identify technical, efficiency, and input change for each of three endogenously determined regimes. Membership in these regimes is estimated, rather than determined ex ante. This framework enables explorations into the determinants of output growth and convergence issues in each regime.

0 Bookmarks
 · 
196 Views
  • [Show abstract] [Hide abstract]
    ABSTRACT: Rajan and Zingales (2003) hypothesize that openness trade and financial is a crucial determinant of financial development. The main policy implication emerging from this hypothesis is that openness should be promoted as a means of facilitating economic growth through financial development. While subsequent research confirms that openness affects financial development, we study whether finance continues to be growth promoting as economies become increasingly open a key implicit assumption behind the policy recommendation. Using data from 78 economies for the period 1981-2006, we find that very high levels of financial openness generally erode the growth-promoting role of financial development while high trade openness strengthens it. These worldwide findings by and large hold for subsamples of Sub-Saharan African, Latin American and OECD economies. Notable exceptions are the invariance of the finance-growth (FG) nexus on trade openness in OECD economies and the positive effect of financial openness on the FG link in Latin American economies.
    Journal of Banking & Finance 11/2014; 48. DOI:10.1016/j.jbankfin.2014.06.031 · 1.29 Impact Factor
  • Source
    [Show abstract] [Hide abstract]
    ABSTRACT: This paper investigates the relationship between tax structures and economic growth in a panel of developed and developing countries. In order to raise revenue, low-income countries have historically relied more heavily on international trade taxes, whilst richer nations employ comparatively more consumption and income taxes. Using the new Government Revenue Dataset (GRD) from the International Centre for Tax and Development (ICTD), we consider the effects of revenue-neutral changes in tax structure on economic growth for a panel of over 100 countries with data covering the period 1980-2010. Results from the Common Correlated Effects Mean Group (CMG) estimator (Pesaran 2006) find that increases in income taxes (specifically personal income taxes) offset by reductions in trade or consumption taxes have had a negative impact on GDP growth rates. We also highlight the fact that trade liberalisation has not had any discernible positive effects on economic growth. Revenue-neutral increases in personal income taxes are found to be particularly harmful in middle- and low-income countries. Taken alongside the results of, for example, Baunsgaard and Keen (2010), this is a reminder of the difficulties of tax reform for developing countries.
  • Source
    [Show abstract] [Hide abstract]
    ABSTRACT: Cultural evolution is a long-term endogenous process which is revealed in society’s cultural traits and it is embodied in institutional characteristics (property rights protection, rule of law, etc.) and transaction characteristics (risk levels, time required for start-ups, corruption levels, literacy levels, etc.). In the short- and medium-term, culture, institutions and transactions are exogenous for the economic and societal system. The paper aims to explore the roles of cultural, transaction and institution characteristics in the determination of opportunity entrepreneurship, at the medium-term. A series of variables is used to express these roles, which are analysed with a principal component analysis and a regression analysis. As expected, the conclusions confirm that the cultural traits both positively and negatively affect opportunity entrepreneurship depending on the particular traits combination. Moreover, the effect of enhanced transaction characteristics and economic institutions is conducive to opportunity entrepreneurship. Performing a sensitivity analysis, we construct a hypothetical, more opportunity entrepreneurship-oriented world by postulating pro-entrepreneurship cultural traits. In this ‘new world’, because cultural traits are no longer an issue, they present ‘entrepreneurial maturity’; the important factors in promoting opportunity entrepreneurship are transaction and economic institution characteristics.
    09/2014; 3(11). DOI:10.1186/s13731-014-0011-3

Full-text (2 Sources)

Download
96 Downloads
Available from
May 21, 2014