Re-Exploring the Nexus Between Economic Freedom and Growth: Is There a Threshold Effect?
1
조회
0
다운로드
0
인용
0
참고문헌
키워드
초록
This study aims to assess the nonlinear effect of economic freedom on economic growth using a sample of 35 emerging and developing countries over the period 1996-2018. To this end, the threshold regression approach of Hansen (1999, 2000) has been deployed. The panel threshold analysis provides evidence of significant nonlinear relationship between economic freedom and economic growth. The tipping point of economic freedom is around 49.87 for the entire sample. Moreover, our findings prove that the estimated threshold level of economic freedom index in emerging countries (64.097) is significantly higher compared to that of developing countries (48.59). Looking at individual country results, the presence of nonlinear threshold effects of economic freedom on economic growth was confirmed in nineteen out of the thirty-five models. The estimated threshold values are quite heterogeneous, ranging from 35.16 in Zimbabwe to 75.87 in Chile.
Abstract
This study aims to assess the nonlinear effect of economic freedom on economic growth using a sample of 35 emerging and developing countries over the period 1996-2018. To this end, the threshold regression approach of Hansen (1999, 2000) has been deployed. The panel threshold analysis provides evidence of significant nonlinear relationship between economic freedom and economic growth. The tipping point of economic freedom is around 49.87 for the entire sample. Moreover, our findings prove that the estimated threshold level of economic freedom index in emerging countries (64.097) is significantly higher compared to that of developing countries (48.59). Looking at individual country results, the presence of nonlinear threshold effects of economic freedom on economic growth was confirmed in nineteen out of the thirty-five models. The estimated threshold values are quite heterogeneous, ranging from 35.16 in Zimbabwe to 75.87 in Chile.
참고문헌 (78)
- Aidt, T., "Governance Regimes, Corruption and Growth: Theory and Evidence", Journal of Comparative Economics, 36(2), pp.195~220 (2008)
- Aidt, T. S., "Corruption, Institutions, and Economic Development", Oxford Review of Economic Policy, 25, pp.271~291 (2009)
- Aixala, J., "Economic freedom, Civil Liberties, Political Rights and Growth : A Causality Analysis", Spanish Economic Review, 11, pp.165~178 (2009)
- Ajide, K. B., "Economic Freedom and Foreign Direct Investment in Ecowas Countries: A Panel Data Analysis", Applied Econometrics and International Development, 14(2), pp.163~174 (2014)
- Alfada, A., "The Destructive Effect of Corruption on Economic Growth in Indonesia : A Threshold Model", Heliyon, 5(10), pp.1~14 (2019)
- Asandului, L., "Modelling Economic Growth Based on Economic Freedom and Social Progress", European Journal of Sustainable Development, 5(3), pp.229~238 (2016)
- Ashby, N., "Income Inequality and Economic Freedom in the U.S. states", Public Choice, 134, pp.329~346 (2008)
- Ayal, E. B., "Components of Economic Freedom and Growth : An Empirical Study", Journal of Developing Areas, 32(3), pp.327~338 (1998)
- Azman-Saini, W. N. W., "Foreign Direct Investment, Economic Freedom and Economic Growth: International Evidence", Economic Modelling, 27(5), pp.1079~1089 (2010)
- Barro, R. J., "Economic Growth in a Cross-Section of Countries", Quarterly Journal of Economics, 106(2), pp.407~443 (1991)
- Bayar, Y., "Impact of Openness and Economic Freedom on Economic Growth in the Transition Economies of the European Union", South-Eastern Europe Journal of Economics, 14(1), pp.7~19 (2016)
- Bennett, D. L., "Subnational Economic Freedom and Performance in the United States and Canada", Cato Journal, 36(1), pp.165~185 (2016)
- Berggren, N., "The Benefits of Economic Freedom : A Survey", Independent Review, 8, pp.193~211 (2003)
- Brkić, I., "The Impact of Economic Freedom on Economic Growth? New European Dynamic Panel Evidence", Journal of Risk and Financial Management, 13(2), pp.1~13 (2020)
- Castro, V., "Government Ideology and Economic Freedom", Journal of Comparative Economics, 49(1), pp.73~91 (2021)
- Cebula, R., "Do Regional Differentials in Economic Freedom Yield Regional Unemployment Rate Differentials in the U.S.? A Brief Exploratory Note Adopting Panel Data Analysis", Econometrics Letters, 3(1), pp.11~25 (2016)
- Cebula, R., "The Impact of Economic Freedom on Per Capita Real GDP: A Study of OECD Nation", Journal of Regional Analysis and Policy, 43(1), pp.34~41 (2013)
- Cebula, R. J., "Economic Growth, Ten Forms of Economic Freedom, and Political Stability: An Empirical Study using Panel Data, 2003-2007", Journal of Private Enterprise, 26, pp.61~81 (2011)
- Cebula, R. J., "Which Economic Freedoms influence Per Capita Real Income?", Applied Economics Letters, 20, pp.368~372 (2013)
- Cebula, R. J., "The Effects of Economic Freedom, Regulatory Quality and Taxation on the Level of Per Capita Real Income : A preliminary analysis for OECD nations and non-G8 OECD nations", Applied Economics, 46, pp.3836~3848 (2014)
- Cebula, R. J., "The Impact of Fiscal and other Economic Freedoms on Economic Growth : An empirical Analysis", International Advances in Economic Research, 18, pp.139~149 (2012)
- Cebula, R. J., "The Roles of Economic Freedom and Regulatory Quality in creating a Favorable Environment for Investment in Energy R and D, Infrastructure, and Capacity", American Journal of Economics and Sociology, 73, pp.299~324 (2014)
- Chen, S. T., "Government Size and Economic Growth in Taiwan : A Threshold Regression Approach", Journal of Policy Modeling, 27(9), pp.1051~1066 (2005)
- Coetzee, C. E., "Economic Freedom and Economic Growth in South Africa. Managing Global Transitions", International Research Journal, 15(2), pp.169~185 (2017)
- Dawson J. W., "Institutions, Investment, and Growth : New Cross-Country and Panel Data Evidence", Economic Inquiry, 36, pp.603~619 (1998)
- Dawson J. W., "Causality in the Freedom-Growth Relationship", European Journal of Political Economy, 19, pp.479~495 (2003)
- De Haan, J., "Market-Oriented Institutions and Policies and Economic Growth: A Critical Survey", Journal of Economic Surveys, 20, pp.157~191 (2006)
- Depken, C. A., "Asymmetric Effects of Economic Freedom on International Trade Flows", International Journal of Business and Economics, 4(2), pp.141~155 (2005)
- Dzhumashev, R., "The Two-way Relationship between Government Spending and Evidence", World Development, 36, pp.1173~1191 (2014)
- Ghosh, S., "Growth-Enhancing Economic Freedom", Journal of Financial Economic Policy, 9(02), pp.209~224 (2017)
- Góes, C., "Institutions and Growth : A GMM", IV Panel VAR Approach, 2016, pp.138, 85~91
- Gohmann, S. F., "Economic Freedom and Prosperity: The Origins and Maintenance of Liberalization" (2018), Routledge
- Gorlach, V. I., "The Impact of Economic Freedom on Economic Growth in the SADC : An Individual Component Analysis", Journal for Studies in Economics and Econometrics, 39(2), pp.41~63 (2015)
- Gropper, D., "Economic Freedom and Happiness", Cato Journal, 31, pp.237~255 (2011)
- Gwartney, J. D., "Economic Freedom, Institutional Quality, and Cross-country Differences in Income and Growth", Cato Journal, 24, pp.205~233 (2004)
- Economic Freedom of the World: 2002 Annual Report, "Gwartney J.G.", Fraser Institute, ~ (2002)
- Hajamini M., "Economic Growth and Government Size in Developed European Countries: A Panel Threshold Approach", Economic Analysis and Policy, 58, pp.1~13 (2018)
- Hall, J. C., "Economic Freedom and Income Levels Across the U.S. States A Spatial Panel Data Analysis", Contemporary Economic Policy, 37(1), pp.40~49 (2019)
- Hansen, B. E., "Threshold Effects in Non-dynamic Panels: Estimation, Testing, and Inference", Journal of Econometrics, 93, pp.345~368 (1999)
- Hansen B. E., "Sample Splitting and Threshold Estimation", Econometrica, 68, pp.575~603 (2000)
- Haque, M. E., "Corruption Clubs : Endogenous Thresholds in Corruption and Development", Economics of Governance, 10, pp.345~373 (2009)
- Heller, L. R., "Economic Freedom and Labor Market Conditions : Evidence from the States", Contemporary Economic Policy, 32(1), pp.56~66 (2014)
- Hussain, M. E., "Impact of Economic Freedom on the Growth Rate : A Panel Data Analysis", Economies, 4(2), pp.1~15 (2016)
- Imtiaz, S., "Economic Freedom and Foreign Direct Investment in South Asian Countries", Theoretical and Applied Economics, 24(2), pp.281~294 (2017)
- Justesen, K. M., "The Effects of Economic Freedom on Growth Revisited : New Evidence on Causality from a Panel of Countries 1970–1999", European Journal of Political Economy, 24, pp.642~660 (2008)
- Klein, P. G., "Politics and Productivity", Economic Inquiry, 41(3), pp.433~447 (2003)
- Leonardo, K.M, "Economic Growth and Corruption in Emerging Markets: Does Economic Freedom Matter?", International Economics, 166, pp.58~70 (2021)
- Méndez, F., "Corruption, Growth and Political Regimes : Cross-country evidence", European Journal of Political Economy, 22(1), pp.82~98 (2006)
- Miller, T., "Index of Economic Freedom" (2018), The Heritage Foundation
- Miller, T., "The Growth and Impact of Economic Freedom: 2017 Index of Economic Freedom" (2017), The Heritage Foundation
- Moomaw, R. L., "Integration, Growth and Cohesion in an Enlarged European Union", pp.65~85 (2005), Springer
- Murphy, R.H, "Applying Panel Vector Autoregression to Institutions, Human Capital, and Output", Empirical Economics, 57, pp.1633~1652 (2019)
- Naanwaab, C., "The impact of Economic Freedom on Bilateral Trade: A Cross-Country Analysis", International Journal of Business Management and Economic Research, 4(1), pp.668~672 (2013)
- Nadeem, M., "Does Really Economic Freedom Matter for Growth in South Asia? Empirical Evidences from Pre-Economic Crises and Post-Economic Crises Period", Asian Economic and Financial Review, 9(1), pp.52~63 (2019)
- Nejad, M. N., "Want Freedom Will Travel : Emigrant Self-Selection According to Institutional Quality", European Journal of Political Economy, 45, pp.71~84 (2016)
- Okunlola, O. C., "Does Economic Freedom enhance Quality of Life in Africa?", International Review of Economics, 68, pp.357~387 (2021)
- O’Reilly, C., "Exogenous Resource Shocks and Economic Freedom", Comparative Economic Studies, 59, pp.243~260 (2017)
- Pääkkönen, J., "Economic Freedom as Driver of Growth in Transition", Economic Systems, 34(4), pp.469~479 (2010)
- Panahi, H., "Economic Freedom and Economic Growth in MENA countries", Asian Economic and Financial Review, 4(1), pp.105~116 (2014)
- Pavlik, J., "Corruption : The Good, the Bad, and the Uncertain", Review of Development Economics, 22(1), pp.311~332 (2018)
- Pitlik, H., "Does Crises Promote the Extent of Economic Liberalization? An empirical Test", European Journal of Political Economy, 19, pp.565~581 (2003)
- Rapsikevicius, J., "The Impact of Economic Freedom on Economic and Environmental Performance: Evidence from European Countries", Sustainability, 13, pp.2380~ (2021)
- Razmi, M. J., "The Effect of Trade Openness and Economic Freedom on Economic Growth: The Case of Middle East and East Asian Countries", International Journal of Economics and Financial Issues, 3(2), pp.376~385 (2013)
- Rode, M., "Economic Freedom and Growth: Which Policies Matter the Most?", Constitutional Political Economy, 23(2), pp.95~133 (2012)
- Santiago, R., "The Impact of Globalization and Economic Freedom on Economic Growth: The Case of the Latin America and Caribbean Countries", Economic Change and Restructuring, 53, pp.61~85 (2020)
- Scully, G., "Economic Freedom, Government Policy and the Trade-offbetween Equity and Economic Growth", Public Choice, 113(1-2), pp.77~96 (2002)
- Slesman, L., "Political Institutions and Finance-Growth Nexus in Emerging Markets and Developing Countries: A Tale of One Threshold", Quarterly Review of Economics and Finance, 72, pp.80~100 (2019)
- Spruk, R., "Economic Freedom and Growth across German Districts", Journal of Institutional Economics, 14(4), pp.739~765 (2018)
- Does Economic Freedom Lead or Lag Economic Growth? Evidence from Bangladesh, "Tanin, T. I.", MPRA, ~, pp.Paper No. 79446 (2017)
- Thuy, D. T. B., "Global Change and Sustainable Development in Asian Emerging Economies, Vol.1" (2022)
- Tavares, J., "How Democracy Affects Growth", European Economic Review, 45, pp.1341~1378 (2001)
- Tunali C. B., "State Aid Policy in the European Union", Journal of Common Market Studies, 53(5), pp.1143~1162 (2015)
- "2021 Index of Economic Freedom" (2021)[URL]
- Viana, P., "The Joint Effect of Democracy and Economic Freedom on Corruption", Journal of public administration, 54(2), pp.285~300 (2020)
- Wulandari, D., "Analysis of the Connection between Economic Freedom and Economic Growth in Indonesia", Interdisciplinary Journal of Contemporary Research in Business, 6(10), pp.63~75 (2015)
- Xu, T., "Economic Freedom and Bilateral Direct Investment", Economic Modelling, 78(C), pp.172~179 (2018)
- Yener, K., "Role of Economic and Political Freedom in the Emergence of Global Middle Class", International Business Review, 25(3), pp.711~725 (2016)
- Zhang, F., "Does Economic Freedom Affect the Production Frontier? A Semiparametric Approach with Panel Data", Economic Inquiry, 56(2), pp.1380~1395 (2018)
