Optimal government size and economic growth in developing and MENA countries: A dynamic panel threshold analysis

Nouira, Ridha; Kouni, Mohamed

doi:10.1080/17938120.2021.1898231

Cited by 17 publications

(19 citation statements)

References 37 publications

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“…Those results are in line with results from Fetahi-Vehapi et al ( 2015), Dritsakis and Stamatiou (2016), who revealed a positive trade openness impact on economic growth in EU countries, and Alfonso and Jalles (2011), who found a negative relationship between government size and economic growth. Some authors (Nouira & Kouni, 2021;Zungu & Greyling, 2021) identified a threshold (10-30 per cent depending on the country) above which the government size negatively related to economic growth.…”

Section: Results Of the Evaluation Infrastructure Development Impact ...mentioning

confidence: 99%

Development of the Model to Examine the Impact of Infrastructure on Economic Growth and Convergence

Mačiulytė-Šniukienė

Butkus

Davidavičienė

2022

Journal of Business Economics and Management

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Core infrastructure, which covers transportation, information and communication (ICT), energy, water and sanitation systems, plays a significant role in economic growth. The development of core infrastructure – one of the European Union (EU) Cohesion Policy (CP) priorities – is heavily funded. However, it remains unclear whether these investments achieve the main aim, i.e. contribute to economic growth and convergence between EU countries and especially regions. A theoretical model addressing the identified issues is needed to assess the impact of infrastructure on economic growth and convergence comprehensively and as accurately as possible. To reach this aim, first, we have disclosed the definition of infrastructure and its structure. Also, we discussed different approaches to the relationship between infrastructure and economic growth. We developed a theoretical model for evaluating infrastructure impact on economic growth and convergence. Moreover, based on the neoclassical approach, we specified an econometric model that includes indicators of different types of infrastructure and assessed growth and convergence outcomes of infrastructure development. Even though we find that infrastructure positively affects growth and convergence, the estimated impact is not statistically significant except for some types of ICT and transport infrastructure.

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Section: Results Of the Evaluation Infrastructure Development Impact ...mentioning

confidence: 99%

Development of the Model to Examine the Impact of Infrastructure on Economic Growth and Convergence

Mačiulytė-Šniukienė

Butkus

Davidavičienė

2022

Journal of Business Economics and Management

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“…The models on the effects of debt commonly include general government final consumption expenditure (% of GDP) to proxy the size of the public sector. Nouira and Kouni (2021) present a discussion on the effects of public spending on economic growth and estimate the inverted U-shaped relationship between the size of the public sector and the rate of growth of output. Section 2 explains that whether the effect will be positive or negative depends on household consumption and private investment responses to an increase in government spending (and public debt).…”

Section: Modelmentioning

confidence: 99%

“…These variables also represent the size of the public sector, as an increase in the share of the private sector in GDP is associated with a decrease in the share of the public sector. Furthermore, research includes investment and consumption shares in growth regressions to determine whether the economy is consumption-or investment-led (Kim 2017;Nouira and Kouni 2021).…”

Section: Modelmentioning

confidence: 99%

Empirical Evidence on Factors Conditioning the Turning Point of the Public Debt–Growth Relationship

et al. 2021

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This paper contributes to the limited literature on the factors conditioning the turning point of the public debt–growth relationship. A decade after the global financial crisis, when the debt ratio in many countries was still above pre-crisis levels, the COVID-19 pandemic again increased the pressure on public finances. It revived the debate on the ability to promote economic recovery through debt-financed government expenditure. However, more intense government borrowing increases its costs and uncertainty about future taxation policy, thus potentially disturbing private consumption, investment, and economic growth. In this paper, we estimate the thresholds of indicators on which the expenditure multiplier depends, which may already imply a risk that public debt will dampen economic growth. We use a methodology of structural threshold regression to examine the varying effects that debt might have on growth using consumption, investment, taxes, and imports as threshold variables, as well as several other factors suggested by previous contributions. The applied methodology allows for the addressing of parameter heterogeneity and endogeneity to be accounted for at the same time. The main results suggest that a positive debt effect is more likely if the conditions for a high expenditure multiplier are met, that an increase in the public-debt-to-GDP ratio is not necessarily deleterious to growth if shares of private consumption and investment in GDP are high, while the tax-revenue-to-GDP ratio is low.

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“…Armey (1995) illustrates such nonlinear relationship between government size and economic growth as an “inverted-U” shaped curve, also known as the Armey curve. Most of the existing research studies that test the existence of Armey curve use panel data analysis ( Kustepeli, 2005 ; Vaziri et al., 2011 ; Facchini and Melki, 2013 ; Hok et al., 2014 ; Asimakopoulos and Karavias, 2016 ; Ali and Khan, 2017 ; Kim et al., 2018 ; Murshed et al., 2018 ; Nouira and Kouni, 2021 ). Little evidence was found in the studies using time series dynamic threshold approach by Hansen (2000) .…”

Section: Introductionmentioning

confidence: 99%

Nonlinear threshold approach for asymmetric effects of government size on economic growth in an emerging Asian economy: the Malaysian experience

Aznan

Goh

Koong

et al. 2022

Heliyon

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Optimal government size and economic growth in developing and MENA countries: A dynamic panel threshold analysis

Cited by 17 publications

References 37 publications

Development of the Model to Examine the Impact of Infrastructure on Economic Growth and Convergence

Development of the Model to Examine the Impact of Infrastructure on Economic Growth and Convergence

Empirical Evidence on Factors Conditioning the Turning Point of the Public Debt–Growth Relationship

Nonlinear threshold approach for asymmetric effects of government size on economic growth in an emerging Asian economy: the Malaysian experience

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