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Public Spending, Income Inequality and Economic Growth in Asian Countries: A Panel GMM Approach

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  • Yobouet Thierry Bienvenu Gnangoin

    (School of Economics, Dongbei University of Finance and Economics, Dalian 116025, China)

  • Liangsheng Du

    (School of Economics, Dongbei University of Finance and Economics, Dalian 116025, China)

  • GuyRoland Assamoi

    (School of International Economics, Dongbei University of Finance and Economics, Dalian 116025, China)

  • Akadje JeanRoland Edjoukou

    (School of Accounting, Dongbei University of Finance and Economics, Dalian 116025, China)

  • Diby François Kassi

    (School of Finance, Dongbei University of Finance and Economics, Dalian 116025, China)

Abstract

This paper offers an empirical examination of the relationship between government spending’s, income inequality, and economic growth by using the case of 19 Asian countries from 2002 to 2017. For this purpose, the paper uses robust difference-GMM estimation and panel granger causality test. We found that gross domestic investment and regulatory quality are the main variables that contribute to these countries’ economic growth. While current government consumption reduces economic growth. Also, government expenditure on education and regulatory quality granger cause economic growth in these countries. However, the effect of government expenditure on education on economic growth is not significant. So, to increase their economic growth, this study recommends these countries’ governments to encourage gross domestic investment, maintain regulatory quality and reduce their current consumption. This study also concludes that income inequality has no impact on these countries’ economic growth for this period.

Suggested Citation

  • Yobouet Thierry Bienvenu Gnangoin & Liangsheng Du & GuyRoland Assamoi & Akadje JeanRoland Edjoukou & Diby François Kassi, 2019. "Public Spending, Income Inequality and Economic Growth in Asian Countries: A Panel GMM Approach," Economies, MDPI, vol. 7(4), pages 1-15, November.
    • Handle: RePEc:gam:jecomi:v:7:y:2019:i:4:p:115-:d:290017
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    8. António Afonso & Gabriela Baquero Fraga, 2024. "Government spending efficiency in Latin America," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 51(1), pages 127-160, February.
    9. Gautam Negi, 2021. "Fiscal Impulse And Sectoral Output €“ Evidence From Indian States," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 28, pages 151-167, December.
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