Growth of Real GDP and Total Factor Productivity in Asia with an Emphasis on Malaysian Growth

Sibabrata Das () and Mukti Upadhyay
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Sibabrata Das: Strategy, Policy, and Review Department, International Monetary Fund
Mukti Upadhyay: Department of Economics, Eastern Illinois University

Atlantic Economic Journal, 2019, vol. 47, issue 4, No 3, 413 pages

Abstract: Abstract This paper estimates growth models for a panel of 15 Asian countries during 40-plus years from the early 1970s to 2014. The focus then shifts to Malaysia for which an annual time-series model is also estimated for the same time period. Both types of models indicate significant influence of human capital either directly on output growth or on growth through total factor productivity. We find that the lower the development level of a country (i.e., a greater income gap), the greater the total factor productivity growth which therefore permits faster income convergence. There is some evidence of interaction between human capital and the income gap as well which leads to an even bigger impact of human capital on total factor productivity growth. The interaction between human capital and openness produces a greater effect on growth in Malaysia based on the time-series model than its effect based on the panel model. Our results suggest that, barring large external shocks, a continued focus on human capital development should help to prevent growth slowdown in Malaysia over the next 15 years.

Keywords: Real GDP growth; Total factor productivity; Panel data model; Time series model; Malaysia; O47; O53 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11293-019-09642-5

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