Drivers of Growth in Fast Emerging Economies: A Dynamic Instrumental Quantile Approach

2015 African Governance and Development Institute WP/15/009

20 Pages Posted: 21 Apr 2015

See all articles by Simplice Asongu

Simplice Asongu

African Governance and Development Institute

Date Written: March 21, 2015

Abstract

This study complements the scarce literature on growth determinants in fast emerging economies of the BRICS and MINT by assessing the determinants throughout the conditional distributions of the growth rate and real GDP output for the period 2001-2011. An instrumenal variable (IV) quantile regression approach is complemented with Two-Stage-Least Squares and IV Least Absolute Deviations. The instrumentation process is dynamic. The following findings are established. First, while Gross FDI has a negative effect on economic growth, the impact of Net FDI is positive, with a higher magnitude in top quantiles of the distributions. Second, the positive effect of natural resources is more apparent in countries with low initial growth levels. Third, the impact of telecommunications infrastructure is not very significant. Fourth, whereas the incidence of bank credit is positive for GDP growth, it is negative for real GDP output. Fifth, while trade openness is positive in bottom quantiles of GDP growth, but for the highest quantile in real GDP output, it is consistently negative on real GDP output. Sixth, while the incidence of political stability is negative on GDP growth, it is positive on real GDP output, with the negative (positive) effect apparent only in top (bottom) quantiles of GDP growth (real GDP output). Policy implications are discussed.

Keywords: Economic Growth; Emerging countries; Quantile regression

JEL Classification: C52; F21; F23; O40; O50

Suggested Citation

Asongu, Simplice, Drivers of Growth in Fast Emerging Economies: A Dynamic Instrumental Quantile Approach (March 21, 2015). 2015 African Governance and Development Institute WP/15/009. Available at SSRN: https://ssrn.com/abstract=2597025 or http://dx.doi.org/10.2139/ssrn.2597025

Simplice Asongu (Contact Author)

African Governance and Development Institute ( email )

P.O. Box 8413
Yaoundé, 8413
Cameroon

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
45
Abstract Views
347
PlumX Metrics