Investigating the Effects of Institutional Quality and Human Capital On Economic Growth (in Persian)

Asghar Mobarak (), Kambiz Hojabr Kiani (), Abbas Memarnejad () and Kambiz Peykarjou ()
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Asghar Mobarak: Department of Economic, Science and Research Branch, Islamic Azad University Islamic Azad University
Kambiz Hojabr Kiani: Department of Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran
Abbas Memarnejad: Department of Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran.
Kambiz Peykarjou: Department of Economics, Science and Research Branch, Islamic Azas University, Tehran, Iran.

The Journal of Planning and Budgeting (٠صلنامه برنامه ریزی و بودجه), 2018, vol. 23, issue 1, 117-146

Abstract: The main challenge of developing countries is to achieve growth and development. The extant economic growth literature illustrates that the quality of institutions and social infrastructure are important factors that influence the economic growth and development. Accordingly, many analysts believe that regarding such institutional factors, the rule of law is one of the most prominent aspects necessary for a system to achieve investment and economic growth. This study aims to investigate the impact of institutional variables on economic growth in developed and developing countries for the period 1995-2015. To this end, Panel Smooth Transition Regression (PSTR) model has been used. The estimation results of model reject the linearity hypothesis, and estimate a model with two regimes that proposes a threshold at institutional quality indicators of 0.1627 and 0.625 for the countries under study. It is demonstrated that the factor of rule of law has a positive impact on economic growth; however, this impact is higher in the second regime. The results also show that in both regimes, the variables of institutional quality indices, economic freedom, human capital and other control variables have a positive effect on economic growth. Moreover, the intensity of the variables influencing the changes in both groups intensifies when institutional quality improves.

Keywords: Institutional Quality; Panel Smooth Transition Regression Model; Democracy; Economic Growth; Developing and Developed Countries (search for similar items in EconPapers)
JEL-codes: K12 K13 K23 (search for similar items in EconPapers)
Date: 2018
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