The Determinants of Economic Growth in Ghana: New Empirical Evidence

Abstract

This article deals with an investigation into the determinants of economic growth in Ghana over the period from 1975 to 2014. In particular, we investigated the impact of physical capital, human capital, labour, government expenditure, inflation, foreign aid, foreign direct investment, financial development, globalization and debt servicing on economic performance within an augmented Solow growth model. It was found that, in the long run, both human capital and foreign aid have a positive influence on output, while labour, financial development and debt servicing have a negative impact on output. It was also found that, in the short run, government expenditure and foreign aid have a positive influence on economic growth, while labour, inflation and financial development have a negative impact on economic growth. These findings hold important policy implications for the country.

External Debt, Institutional Quality and Economic Growth

“…( 1)where is economic growth measured as the growth rate in GDP per capita, ED it is country i's external debt level, X it is a vector of control variables used in the growth literature, namely initial income, investment-gross domestic product ratio, population growth rates, trade, and institutional quality (see Cordella et al, 2010;Iyke, 2017Iyke, , 2018Takumah and Iyke, 2017;Juhro et al, 2020;Ho and Iyke, 2020), e it is the error term, i = 1,...N is the country identifier, and t = 1,...T is the time identifier. The institutional quality indicator is measured using the country external debt policy, economic management cluster, and macroeconomic management indicators published by the World Bank, which are developed to assess the quality of a country's present policy and institutional framework.…”

Financial development and economic growth in sub-Saharan Africa: A sectoral perspective

“…This study seeks to contribute to the literature on the relationship between finance and growth in sub-Saharan Africa on two levels. First, previous studies (see, for instance, Aluko et al, 2020;An et al, 2020;Ho & Iyke, 2020;Ibrahim & Alagidede, 2018) focused on the impact of financial development on aggregate growth. This study complements existing literature by examining the impact of financial development on sectoral growth.…”

Does Export Diversification Lead to Income Convergence? Evidence From Cross-Country Analysis

“…diversification, which indicates that higher value of export concentration leads to the lower diversification and vice versa), human capital, general government final consumption expenditure, trade openness, foreign direct investment, gross fixed capital formation, and domestic credit to private sector over the period of 1970 to 2010. The determinants of economic growth based on the extended growth theory are chosen following recent works by Kumar and Pacheco (2012), Arazmuradov et al (2014), Chapsaa et al (2015), Völlmecke et al 2015, Li et al (2016), Iyke (2017Iyke ( , 2018, and Ho and Iyke (2020). The data sources and description of the variables are illustrated in Appendix B.…”