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Investigating the Effects of Institutional Quality and Human Capital On Economic Growth (in Persian)

Author

Listed:
  • Mobarak, Asghar

    (Department of Economic, Science and Research Branch, Islamic Azad University Islamic Azad University)

  • Hojabr Kiani, Kambiz

    (Department of Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran)

  • Memarnejad, Abbas

    (Department of Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran.)

  • Peykarjou, Kambiz

    (Department of Economics, Science and Research Branch, Islamic Azas University, Tehran, Iran.)

Abstract

The main challenge of developing countries is to achieve growth and development. The extant economic growth literature illustrates that the quality of institutions and social infrastructure are important factors that influence the economic growth and development. Accordingly, many analysts believe that regarding such institutional factors, the rule of law is one of the most prominent aspects necessary for a system to achieve investment and economic growth. This study aims to investigate the impact of institutional variables on economic growth in developed and developing countries for the period 1995-2015. To this end, Panel Smooth Transition Regression (PSTR) model has been used. The estimation results of model reject the linearity hypothesis, and estimate a model with two regimes that proposes a threshold at institutional quality indicators of 0.1627 and 0.625 for the countries under study. It is demonstrated that the factor of rule of law has a positive impact on economic growth; however, this impact is higher in the second regime. The results also show that in both regimes, the variables of institutional quality indices, economic freedom, human capital and other control variables have a positive effect on economic growth. Moreover, the intensity of the variables influencing the changes in both groups intensifies when institutional quality improves.

Suggested Citation

  • Mobarak, Asghar & Hojabr Kiani, Kambiz & Memarnejad, Abbas & Peykarjou, Kambiz, 2018. "Investigating the Effects of Institutional Quality and Human Capital On Economic Growth (in Persian)," The Journal of Planning and Budgeting (٠صلنامه برنامه ریزی Ùˆ بودجه), Institute for Management and Planning studies, vol. 23(1), pages 117-146, May.
    • Handle: RePEc:auv:jipbud:v:23:y:2018:i:1:p:117-146
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    More about this item

    Keywords

    Institutional Quality; Panel Smooth Transition Regression Model; Democracy; Economic Growth; Developing and Developed Countries;
    All these keywords.

    JEL classification:

    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law

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