Institutions, economic openness and credit cycles: An international evidence

Nguyen, Canh Phuc; Schınckus, Chrıstophe; Thanh, Su Dinh; Chong, Felicia Hui Ling

doi:10.14254/2071-8330.2020/13-4/16

Cited by 9 publications

(8 citation statements)

References 46 publications

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“…This implies that institutional quality (economic freedom) is essential for real GDP growth in SSA. This result of our study is consistent with the work of [ 56 , 65 ].…”

Section: Resultssupporting

confidence: 94%

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Effect of government revenue on economic growth of sub-Saharan Africa: Does institutional quality matter?

Ayana,

Demissie,

Sore

2023

PLoS ONE

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Following the approval of sustainable development goals at the global level, the link between fiscal policy, institutional quality, and economic growth has attracted special attention in economic literature. This study scrutinizes the effect of government revenue-institutional quality interaction on the economic growth of 43 Sub-Saharan Africa countries for the period of 2012–2022. Methodology-wise, the study employed the System Generalized Method of Moment (SGMM) to analyze the panel data gained from dependable data sources; the World Development Indicator and the Heritage Economic Freedom Index. The novelty of this study emanates from the estimation technique designated and the introduction of revenue-institutional quality into the economic growth model of SSA. The result of the study reveals that government revenue adversely affects economic growth while institutional quality positively enhances economic growth before interacting with each other. However, the interactive coefficient of government revenue and economic growth positively affected the real GDP growth rate of SSA countries over the study periods. Precisely, before interacting with institutional quality, a percentage change in government revenue, keeping all other things constant, leads to a 0.0866 percent decline in economic growth while it marks a 0.2329 percent upsurge in economic growth in the presence of institutional quality. The result of the study further shows that government revenue promotes the economic growth of the region when combined with institutional quality. On the other hand, foreign direct investment and openness to trade were the key sources of economic growth whereas the population growth rate adversely impacted economic growth in SSA countries. The policy implication of the study is that SSA needs to strengthen government revenue management. Further, the finding of the study implies that SSA countries need to improve institutional quality through promoting efficiency of the regulatory quality and the size of the SSA governments. In addition to this, the fast real GDP growth rate of SSA countries demands improved institutional quality indicators such as the rule of law and extended access to the open market.

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“…This implies that institutional quality (economic freedom) is essential for real GDP growth in SSA. This result of our study is consistent with the work of [ 56 , 65 ].…”

Section: Resultssupporting

confidence: 94%

“…[ 56 ] Observed that institutions enhance credit growth and in turn economic growth in the panel data of 60 countries for the study periods of 2003 and 2017. Similarly [ 57 ], examined the effect of institutional quality on economic growth.…”

Section: Reviews Of Related Literaturementioning

confidence: 99%

Effect of government revenue on economic growth of sub-Saharan Africa: Does institutional quality matter?

Ayana,

Demissie,

Sore

2023

PLoS ONE

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“…While institutions were traditionally associated with organizational functions, the contemporary view broadens the concept to include technology, influencing economic growth as an endogenous variable. Enhancements in institutional quality are linked to increased productivity [ 26 ] exhibiting a positive impact on economic growth [ 27 , 28 ]. The evolution of institution is crucial for long-term growth, with static institutions having short-term effects but lacking long-term impacts [ 29 ].…”

Section: Literature Reviewmentioning

confidence: 99%

Remittances inflow and economic growth nexus in Sub-Saharan Africa: Do institutional quality and macroeconomic stability matter?

Delessa,

Alemu,

Bane

2024

Heliyon

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“…[ 56 ] found institutional quality in African countries from the period of 1999–2017 through the use of the FMOLS estimation technique. Further, their study found that there is bidirectional causality between economic growth and institutional quality [ [57] , [58] ]. Observed that institutions enhance credit growth and in turn economic growth in the panel data of 60 countries for the study periods of 2003 and 2017.…”

Section: Reviews Of Related Literaturementioning

confidence: 99%

On the government revenue on economic growth of Sub-Saharan Africa: Does institutional quality matter?

Ayana,

Demissie,

Sore

2024

Heliyon

View full text Add to dashboard Cite

Institutions, economic openness and credit cycles: An international evidence

Cited by 9 publications

References 46 publications

Effect of government revenue on economic growth of sub-Saharan Africa: Does institutional quality matter?

Effect of government revenue on economic growth of sub-Saharan Africa: Does institutional quality matter?

Remittances inflow and economic growth nexus in Sub-Saharan Africa: Do institutional quality and macroeconomic stability matter?

On the government revenue on economic growth of Sub-Saharan Africa: Does institutional quality matter?

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