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Governance, resources and growth

Md Al Mamun, Kazi Sohag and M. Kabir Hassan

Economic Modelling, 2017, vol. 63, issue C, 238-261

Abstract: Using a large sample of 50 oil exporting countries, we extend the prior literature by examining the role of quality of governance (QOG) on economic growth under the condition of heterogeneity and cross-sectional independence in errors. We document that QOG is by far the most consistent driver of economic growth both in the long- and short-run. Our result is robust to an alternative and an inverse measure of QOG. We also investigate a number of mediating factors contributing the QOG and economic growth linkage. We show that the long-run positive effect of QOG on economic growth is stronger in countries with higher information communication technology (ICT) diffusion; and such effect works only in countries with higher social capital, economic globalization, and financial development (FD). We also show that the ‘resource curse’ or ‘resource blessing’ debate in growth literature is sensitive to methodological choices.

Keywords: Common correlated effects pooled (CCEP); Financial development; ICT diffusion; Oil resource; Quality of Governance; Social capital (search for similar items in EconPapers)
JEL-codes: O43 F43 (search for similar items in EconPapers)
Date: 2017
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