Impact of government expenditure on unemployment in Asian countries: does institutional quality matter?

Toan Khanh Tran Pham

International Journal of Development Issues, 2024, vol. 24, issue 2, 170-184

Abstract: Purpose - Asian countries have had persistent unemployment levels. The purpose of this paper is to investigate the impact of government spending on unemployment. Furthermore, this paper investigates the moderating role of institutional quality on the government spending–unemployment nexus. Design/methodology/approach - Using data from 35 Asian countries from 2000 to 2022, the dynamic ordinary least squares and fully modified ordinary least squares technique is used to tackle with aforementioned issue. In addition, pooled mean group estimation is applied to verify the robustness of the findings. Findings - The results show that an increase in government expenditure and better institutions reduce the unemployment rate. Interestingly, the negative impact of government expenditure on unemployment will enhance and intensify with better institutional quality. Furthermore, trade openness and foreign direct investment decrease unemployment in Asian countries. The results are robust to various specifications. Practical implications - Findings from this study provide important implications for governments. Governments should use public expenditure efficiently and enhance and improve institutional quality to reduce unemployment. Originality/value - To the best of the author’s knowledge, this study pioneers the investigation of the moderating role of institutional quality in the relationship between government expenditure and unemployment in Asian countries.

Keywords: Asian countries; Unemployment; Institutional quality; Government spending (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

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:eme:ijdipp:ijdi-05-2024-0127

DOI: 10.1108/IJDI-05-2024-0127

Access Statistics for this article

International Journal of Development Issues is currently edited by Dr Dilip Dutta

More articles in International Journal of Development Issues from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().