Governance, Resources and Growth
53 Pages Posted: 5 Jan 2017 Last revised: 4 Mar 2017
Date Written: July 7, 2016
Using a large sample of 50 oil exporting countries, we extend the prior literature by examining the role of quality of governance (QOG) on economic growth under the condition of heterogeneity and cross-sectional independence in errors. We document that QOG is by far the most consistent driver of economic growth both in the long and short-run. Our result is robust to alternative and an inverse measure of QOG. We also investigate a number of mediating factors contributing the QOG and economic growth linkage. We show that the positive effect of QOG on economic growth works in countries with higher information communication technology (ICT) diffusion, social capital, economic globalization, and financial development (FD). We also show that the ‘resource curse’ or ‘resource blessings’ debate in growth literature is sensitive to methodological choices.
Keywords: Common correlated effects pooled (CCEP), financial development, ICT diffusion, oil resource, QOG, social capital.
JEL Classification: O43, F43.
Suggested Citation: Suggested Citation