The Catch-up Effect of Economic Growth. Evidence from the European Countries

Meral Kagitci (), Leonardo Badea () and Vasile Cosmin Nicula ()
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Meral Kagitci: The Bucharest University of Economic Studies, Finance Department.
Leonardo Badea: West University of Timișoara
Vasile Cosmin Nicula: Romanian Court of Accounts.

Journal for Economic Forecasting, 2021, issue 4, 76-86

Abstract: Using a sample of thirteen European countries (cohesion countries) during twenty-one years, from 2000 to 2020, we employ a Quantile Regression approach to investigate the catch-up effect for the economic growth. According to the reported results, the catch-up effect appears to be more pronounced at the lower end of the conditional economic growth distribution, but also when economic growth is on an upward trend. The results remain robust to a different econometric specification. Additionally, foreign direct investments exhibit a higher impact on economic growth across superior quantile as compared to the lower ones. The impact is also statistically significant irrespective of the selected quantile. The same conclusion is valid for the Political Stability Index, the positive relationship indicating that economic growth is extremely sensitive to political events.

Keywords: catch–up effect; quantile regression; panel data analysis (search for similar items in EconPapers)
JEL-codes: C21 E10 E61 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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