An empirical analysis of government interventions in ECOWAS: evidence from dynamic panel threshold

Olumide Olusegun Olaoye, Ambreen Noman and Ezekiel Olamide Abanikanda

International Journal of Emerging Markets, 2021, vol. 18, issue 8, 1892-1916

Abstract: Purpose - The study examines whether the growth effect of government spending is contingent on the level of institutional environment prevalent in Economic Community of West African States (ECOWAS). Design/methodology/approach - The study adopts the more refined and more appropriate dynamic threshold panel by Seo and Shin (2016) and made applicable be Seoet al.(2019). The technique models a nonlinear asymmetric dynamics and cross-sectional heterogeneity simultaneously in a dynamic threshold panel data framework. Findings - The results show that there is a threshold effect in the government spending-growth relationship. Specifically, the authors found that the impact of government spending on economic growth is positive and statistically significant only above a certain threshold level of institutional development. Below that threshold, the effect of government spending on growth is insignificant and negative at best. The findings suggest that government spending-growth nexus is contingent on the level of Institutional quality. Originality/value - Unlike previous studies that adopt the linear interaction model which pre-imposea prioriconditional restrictions, this study adopts the dynamic threshold panel framework which allows the lagged dependent variable and endogenous covariates.

Keywords: Government expenditure; Economic growth; Institutions; FD-GMM; Dynamic panel threshold; Kink (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (1)

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:ijoemp:ijoem-08-2020-0979

DOI: 10.1108/IJOEM-08-2020-0979

Access Statistics for this article

International Journal of Emerging Markets is currently edited by Prof Ilan Alon

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