Government Size and Economic Growth: A Review of International Literature

Nyasha, Sheilla; Odhiambo, Nicholas M.

doi:10.1177/2158244019877200

Cited by 41 publications

(33 citation statements)

References 35 publications

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“…By looking at the country-specific or macroeconomic control variables, trade openness (TO) shows a positively significant impact on Gpc in all models under Panel A, while gross capital formation (GCF) and government size (GS) are positively and negatively significant in Models (1) and (4), respectively. The findings are in line with existing literature that shows the negative impact of a large public sector on economic growth (Baklouti & Boujelbene, 2016;Nyasha & Odhiambo, 2019;Sheehey, 1993). In other words, the impact of GS depends on the relative size of the public sector and the level of Gpc.…”

Section: Baseline Resultssupporting

confidence: 92%

Bank Concentration and Economic Growth Nexus

Smolo¹

2020

AFL

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This paper examines the relationship between bank concentration and economic growth in Organization of Islamic Cooperation (OIC) countries. This is done using the system GMM estimators on a panel data sample consisting of 41 countries and 650 observations. Our analysis reveals that bank concentration has negative impact on economic growth and this relationship is non-linear. Furthermore, the impact of bank concentration on economic growth is found to be dependent on the country’s income and corruption levels. Therefore, it seems reasonable to conclude that bank concentration has negative impact on the economic growth in OIC countries.

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Section: Baseline Resultssupporting

confidence: 92%

Bank Concentration and Economic Growth Nexus

Smolo¹

2020

AFL

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“…The various empirical studies that have been conducted partly support the Keynesian view, while others support Wagner's view. Nyasha and Odhiambo (2019) divide the causal relationship into four types: (1) The supplyleading response or the government expenditure-led growth (also known as the Keynesian view); (2) The demand-driven response or the growth led government expenditure view (also known as Wagner's Law); (3) The bi-directional causality or feedback response; and (4) No causality or the independent view (also known as the neutrality view). This opens a research gap to contribute to the debate, so that research problems are directed at the relationship between public sector spending and economic growth in Indonesia.…”

Section: Introductionmentioning

confidence: 99%

The Relationship Between Government Spending and Economic Growth Revisited

Wahyudi

2020

IJEFI

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This study aims to analyze and verify the relationship between government spending and economic growth. This relationship has been a hot topic for debate among economists, with plenty of research done and being done upon it. This particular study uses panel data from 34 provinces in Indonesia during the 2014-2018 period. During this time, Indonesia's government allocated significant amount of its annual budget towards infrastructure. The estimated econometric test result using the Granger Causality Test did not find support for the effect of economic growth on government spending. Conversely, government spending has a significant effect on economic growth. This study provides support for Keynesian economic system, where government spending is used as a policy instrument to encourage economic growth in a nation.

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“…This theory suggests causality between public expenditure and national income from national income to government expenditure. Based on Wanger's law, an increase in government expenditure is due to economic growth (IMF, 1988;Nyasha and Odhiambo, 2019).…”

Section: Review Of Extant Literaturementioning

confidence: 99%

Post-Financial Crises Puzzle of Economic Growth in Low and Lower-Middle Income Countries: Evidence from Static and Dynamic Panel Estimations

Shafiq¹,

Adeleye²

2020

Preprint

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This paper investigates economic growth in 65 low and lower-middle-income countries from 2010 to 2017. Results from static and dynamic panel data techniques show that foreign direct investment (FDI), capital formation, and labor force significantly increase economic growth while government expenditure decreases growth. Mobile phone subscription reveals no significant impact on growth at aggregate levels. Furthermore, analyses at the income group level reveal substantial differences between the determinants of economic growth in low and lower-middle-income countries. For instance, FDI is a significant predictor of growth in low-income countries, but not in lower-middle-income countries. Similarly, government expenditure and mobile cellular subscriptions are not significant predictors in low-income countries relative to lower-middle-income countries. Interestingly, capital formation and labor force are the two common significant predictors across low and lower-income countries.

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Government Size and Economic Growth: A Review of International Literature

Cited by 41 publications

References 35 publications

Bank Concentration and Economic Growth Nexus

Bank Concentration and Economic Growth Nexus

The Relationship Between Government Spending and Economic Growth Revisited

Post-Financial Crises Puzzle of Economic Growth in Low and Lower-Middle Income Countries: Evidence from Static and Dynamic Panel Estimations

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