Economic Sentiments and Money Demand Stability in the CEECs

Open Economies Review - This paper aims at building a money demand function that takes account of the heterogeneities of the Central and Eastern European Countries (CEECs) in the context of the...     

Is education important in assessing the impact of institutions on economic growth in emerging economies?

ABSTRACT

In this article, we empirically revise the hypothesis that institutions cause economic growth for emerging countries starting from a theoretical model. Our sample consists of 21 countries covering different zones: European Emerging, Asia Pacific Emerging, Latin America, Middle-East and Africa while the status advanced versus secondary emerging countries based on FTSE (Financial Times Stock Exchange) classification is accounted for. The period analysed is 1995–2014. The methodology is based on System GMM estimator of Arellano-Bover and Blundell-Bond for dynamic panel data. Empirical findings suggest that only variables such as voice and accountability and government effectiveness have a significant positive impact on economic growth rates of the analysed countries. In the presence of control variables, i.e. trade and government final consumption, results are robust. Results remain robust for countries that have a high level of government expenditure on tertiary education which proves the role of education in assessing the impact of institutions on economic growth.