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The Determinants of Economic Growth: An Empirical Investigation of North Carolina

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  • Kingsley Nwala

    (Department of Business and Economics, Elizabeth City State University, Elizabeth City, North Carolina, 27909, USA.)

Abstract

This paper examines the determinants of economic growth in North Carolina using Autoregressive Distributed lag (ARDL) model approach, Co-integration, and Bounds tests. The state's gross domestic product, gross investment, labor force, literacy rate, and foreign direct investments data were estimated. The bounds test revealed that all of the variables in the models are co-integrated, meaning that they have long-run relationships with economic growth of the state. The estimated coefficients are statistically significant at 5% level, and have the expected positive signs. Gross investment, labor force, literacy rate and foreign direct investments variables are strong determinants of economic growth in the state of North Carolina. The implications from the study are that government policies encouraging increased gross investment spending, lowering unemployment rate of the labor force, encouraging inflow of foreign direct investments, and increasing investments in human capital should be strongly pursued by the state policy makers.

Suggested Citation

  • Kingsley Nwala, 2018. "The Determinants of Economic Growth: An Empirical Investigation of North Carolina," International Journal of Economics and Financial Issues, Econjournals, vol. 8(5), pages 26-34.
    • Handle: RePEc:eco:journ1:2018-05-5
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    North Carolina ; Cointegration; Autoregressive Distributed lag (ARDL) modeling and Economic growth.;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection

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