The growth effect of democracy and technology: An industry disaggregated approach |
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Institution: | 1. Baugh Center for Entrepreneurship & Free Enterprise, Baylor University, USA;2. Department of Economics, Clemson University, USA;1. Department of Economics, Universidad del Rosario, Bogotá, Colombia;2. Department of Economics and Finance, Utah State University, Logan, UT, USA |
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Abstract: | The theoretical and empirical sides of democracy-growth literature fail to offer a consensus on the impact of democracy on growth. This paper provides a disaggregated manufacturing approach that reveals different effects of democracy across industries within countries. I surmise that the interplay between democracy and technological development is crucial to the economic performance of industries. A panel dataset of 61 manufacturing industries from 72 countries between 1990 and 2010 is employed, along with a wide variety of democracy measures. The results point to a technologically-conditioned effect of democracy. Political regime changes towards democracy are growth-enhancing for industries close to the World Technology Frontier but have a negative effect on backward industries. This evidence is robust to specification changes and alternative estimation techniques, and prevails once the possible dynamics of manufacturing growth are tackled. |
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Keywords: | Democracy Manufacturing industries Economic growth World technology frontier Panel data H7 O14 O43 |
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