The Relationship Between Economic Freedom with Economic Growth and Development in Emerging Market Economies: A Panel Data Analysis

Muhammet Buğra Sucu ()
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Muhammet Buğra Sucu: Gazi University

Bulletin of Economic Theory and Analysis, 2017, vol. 2, issue 2, 135-167

Abstract: This study discussed on correlation between economic freedom and different types of economic indicators. The impact of economic freedom on economic growth and development were examined in the application part of the study. In order to analyze the effects of economic freedoms on economic growth and development, the five main components of the Fraser Institute’s Economic Freedom of the World 2015 Annual Report were taken as independent variables. These five main components are size of government, legal structure and property rights, sound money, freedom to trade internationally and regulation. The rate of change in per capita real income level as an indicator of economic growth has been determined. As a development indicator, the share of high technology products in the exports of manufacturing industry products has been taken. Using panel data analysis, nine emerging market economies were examined for the period 2000-2013. The results of the analysis show that; reducing the size of government, strengthening the legal structure and property rights, and maintaining a stable monetary policy (enhancing the access to the sound money) is a positive effect on economic growth. According to the results; reducing the size of government, strengthening the legal structure and property rights and a stable monetary policy is a positive effect on economic growth. At the same time legal structure and property rights, liberalization of international trade and reducing regulation is a positive effect on exports of high-tech products.

Keywords: Economic Freedom; Economic Growth; Economic Development (search for similar items in EconPapers)
JEL-codes: P47 (search for similar items in EconPapers)
Date: 2017
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