Structural Differences in Economic Growth
Tinbergen Institute Discussion Paper No. 2008-085/4
40 Pages Posted: 19 Sep 2008
Date Written: August 28, 2008
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.
Keywords: Economic growth, parameter heterogeneities, latent class models, panel time series
JEL Classification: C32, C33, O4, O57
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
European Regional Policies in Light of Recent Location Theories
By Diego Puga
-
Unemployment Clusters Across European Regions and Countries
By Diego Puga and Henry G. Overman
-
Regional Policy in the Global Economy: Insights from New Economic Geography
-
Multinationals' Location Choice, Agglomeration Economies and Public Incentives
By Holger Görg, Salvador Barrios, ...
-
Acquisition Versus Greenfield Investment: The Location of Foreign Manufacturers in Italy
-
Location Choices of Multinational Firms in Europe: The Role of National Boundaries and EU Policy
By Roberto Basile, Davide Castellani, ...
-
Regional Income Convergence in the Enlarged Europe, 1995-2000: A Spatial Econometric Perspective