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The Optimal Level and Impact of Internal Factors on Growth

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  • Li, Kui-Wai

Abstract

This paper empirically uses data from the world economy to show that performance of domestic factors are equally important to external factors when comes to growth. Various external and domestic factors are used to construct two separate indices and the principal component method is applied in the analysis. The empirical results show that given a different level of performance in the economy’s external factors, a higher performance in the internal factors will produce a higher growth rate. When the performance of an economy’s internal factors is extremely low, it would be appropriate for that economy first to improve its internal factors.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 36419.

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Date of creation: Jul 2011
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Handle: RePEc:pra:mprapa:36419

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Keywords: Growth; external factors; domestic factors;

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  7. Li, Kui-Wai & Zhou, Xianbo, 2010. "Openness, domestic performance and growth," Economics Letters, Elsevier, vol. 107(1), pages 13-16, April.
  8. Balassa, Bela, 1986. "Comparative Advantage in Manufactured Goods: A Reappraisal," The Review of Economics and Statistics, MIT Press, vol. 68(2), pages 315-19, May.
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