ARE EMPIRICAL RESULTS IN ECONOMIC GROWTH MODELS BIASED BECAUSE OF OMITTED VARIABLES? CROSS-COUNTRY EVIDENCE

Hsin-Yu Liang and Alan K. Reichert

The International Journal of Business and Finance Research, 2010, vol. 4, issue 3, 31-42

Abstract: This study examines the impact of external factors, such as law, regulation, and technology on a country’s rate of economic growth. The results suggest that the technological, legal, and regulatory environment can play a major role towards enhancing the smooth functioning of the financial system and economic growth. While a growing body of evidence examines the individual impact of similar external factors, Demirguc-Kunt (2006) argues that it is crucial to consider all the relevant factors together in one model. Thus, this study first examines the individual impact of these external factors for both advanced and emerging countries. Next, we examine the joint impact of relevant factors selected by stepwise regression procedures. The findings provide evidence for both groups of countries that the best models for predicting economic growth are ones that do include all the relevant factors together in one model.

Keywords: Legal system; regulation; technology; financial development; economic growth. (search for similar items in EconPapers)
JEL-codes: G21 G28 K00 O11 O16 (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.theibfr2.com/RePEc/ibf/ijbfre/ijbfr-v4n3-2010/IJBFR-V4N3-2010-3.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ibf:ijbfre:v:4:y:2010:i:3:p:31-42

Access Statistics for this article

The International Journal of Business and Finance Research is currently edited by Terrance Jalbert

More articles in The International Journal of Business and Finance Research from The Institute for Business and Finance Research
Bibliographic data for series maintained by Mercedes Jalbert ( this e-mail address is bad, please contact ).