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The Impact of Political Stability on Economic Growth in European Union

Emilia Anuta Corovei () and Adela Socol ()
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Emilia Anuta Corovei: “1st of December 1918†University of Alba Iulia
Adela Socol: “1st of December 1918†University of Alba Iulia

Ovidius University Annals, Economic Sciences Series, 2019, vol. XIX, issue 1, 8-14

Abstract: In our empirical study we analyze the impact of political stability on GDP growth forEuropean Union Countries over the period 2000-2017. We ran a panel OLS regression with robust standard errors and we removed panel autocorrelation and heteroskedasticity from our data. We consider a politically stable country when doesn’t face with conflicts, protests, radical changes of regimes, terorismand wars. Political risk is often associated with foreign investments. Foreign investors are not willing to invest in war and conflict countries, in regions where the legislative, executive and judiciary powers can not operate under normal democratic conditions. Our empirical results indicate that there is a positive and a significant relationship between political stability and GDP growth.

Keywords: GDP growth; Political stability; European Union (search for similar items in EconPapers)
JEL-codes: C23 F43 O47 (search for similar items in EconPapers)
Date: 2019
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Handle: RePEc:ovi:oviste:v:xix:y:2019:i:1:p:8-14