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Government size and economic growth in emerging market economies: a panel co-integration approach

Arpita Ghose and Sutapa Das

Macroeconomics and Finance in Emerging Market Economies, 2013, vol. 6, issue 1, 14-38

Abstract: A significant positive influence of both government size and domestic investment on economic growth is found in the long run during 1970--2006 for a sample of 19 emerging market economies, employing panel co-integration testing and estimating the parameters using dynamic ordinary least square method, for all the indicators, excepting the case when one chooses general government final consumption expenditure as a percentage of GDP a measure of government size and gross capital formation as a percentage of GDP a measure of domestic investment, with per capita GDP a proxy for economic growth. The findings corroborate the argument that diverse results of the earlier studies are due to different measures adopted.

Date: 2013
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DOI: 10.1080/17520843.2012.697075

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