Regulatory Quality and Economic Performance: Evidence from European Countries

Yelyzaveta Shebalkova, Jan VOHARČà K and Harinarayanan Kayathingal
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Yelyzaveta Shebalkova: Pan-European University in Bratislava, Faculty of Economics and Business, Tomášikova 20, 821 02 Bratislava, Slovak Republic
Jan VOHARČà K: DTI University, SládkoviÄ ova 533/20, 01841 Dubnica and Váhom, Slovak Republic
Harinarayanan Kayathingal: DTI University, SládkoviÄ ova 533/20, 01841 Dubnica and Váhom, Slovak Republic

Littera Scripta, 2026, vol. 19, issue 1, 1-12

Abstract: This study investigates the relationship between regulatory quality and economic growth across 11 European countries over the period 2010–2023 using a comprehensive panel data framework. Employing pooled OLS, fixed effects, two-way fixed effects, and System GMM estimators, the analysis examines the robustness, heterogeneity, and dynamic properties of the regulatory quality–growth nexus. The results indicate that regulatory quality does not have a statistically significant or robust effect on economic growth once country-specific and time-specific heterogeneity are controlled for. Additional analyses reveal no significant differences across Western, Central, and Eastern European countries, nor evidence of dynamic or non-linear effects. The findings suggest that in mature and highly regulated European economies, regulatory quality may act more as a background institutional condition rather than a direct driver of short-term growth, highlighting the importance of complementary macroeconomic factors.

Keywords: Regulatory Quality; Economic Growth; Panel Data Analysis; European Economies; Institutional Economics (search for similar items in EconPapers)
JEL-codes: C23 O43 O47 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:rsg:littra:2026-001

DOI: 10.36708/LS.2026.I01.001

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