Structural Differences in Economic Growth

Nalan Baştürk, Richard Paap and Dick van Dijk

No 08-085/4, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: This paper addresses heterogeneity in determinants of economic growth in a data-driven way. Instead of defining groups of countries with different growth characteristics a priori, based on, for example, geographical location, we use a finite mixture panel model and endogenous clustering to examine cross-country differences and similarities in the effects of growth determinants. Applying this approach to an annual unbalanced panel of 59 countries in Asia, Latin and Middle America and Africa for the period 1971-2000, we can identify two groups of countries in terms of distinct growth structures. The structural differences between the country groups mainly stem from different effects of investment, openness measures and government share in the economy. Furthermore, the detected segmentation of countries does not match with conventional classifications in the literature.

This discussion paper resulted in a publication in Applied Economics (2013). Volume 44, pages 119-134.

Keywords: Economic growth; parameter heterogeneities; latent class models; panel time series (search for similar items in EconPapers)
JEL-codes: C32 C33 O4 O57 (search for similar items in EconPapers)
Date: 2008-09-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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