IDEAS home Printed from https://ideas.repec.org/a/ovi/oviste/vxixy2019i1p8-14.html
   My bibliography  Save this article

The Impact of Political Stability on Economic Growth in European Union

Author

Listed:
  • Emilia Anuta Corovei

    (“1st of December 1918†University of Alba Iulia)

  • Adela Socol

    (“1st of December 1918†University of Alba Iulia)

Abstract

In our empirical study we analyze the impact of political stability on GDP growth forEuropean Union Countries over the period 2000-2017. We ran a panel OLS regression with robust standard errors and we removed panel autocorrelation and heteroskedasticity from our data. We consider a politically stable country when doesn’t face with conflicts, protests, radical changes of regimes, terorismand wars. Political risk is often associated with foreign investments. Foreign investors are not willing to invest in war and conflict countries, in regions where the legislative, executive and judiciary powers can not operate under normal democratic conditions. Our empirical results indicate that there is a positive and a significant relationship between political stability and GDP growth.

Suggested Citation

  • Emilia Anuta Corovei & Adela Socol, 2019. "The Impact of Political Stability on Economic Growth in European Union," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(1), pages 8-14, August.
    • Handle: RePEc:ovi:oviste:v:xix:y:2019:i:1:p:8-14
    as

    Download full text from publisher

    File URL: http://stec.univ-ovidius.ro/html/anale/RO/wp-content/uploads/2019/08/2.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Barro, Robert J. & Lee, Jong-Wha, 1994. "Sources of economic growth," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 40(1), pages 1-46, June.
    2. Randall G. Holcombe & Donald J. Lacombe, 2004. "The Effect of State Income Taxation on Per Capita Income Growth," Public Finance Review, , vol. 32(3), pages 292-312, May.
    3. Alesina, Alberto & Özler, Sule & Roubini, Nouriel & Swagel, Phillip, 1996. "Political Instability and Economic Growth," Journal of Economic Growth, Springer, vol. 1(2), pages 189-211, June.
    4. Nazeer, Abdul Malik & Masih, Mansur, 2017. "Impact of political instability on foreign direct investment and Economic Growth: Evidence from Malaysia," MPRA Paper 79418, University Library of Munich, Germany.
    5. Dumitrescu Bogdan Andrei & Dedu Vasile & Enciu Adrian, 2009. "The Correlation Between Unempoyment And Real Gdp Growth.A Study Case On Romania," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 2(1), pages 317-322, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mahmood ul Hasan & Nawazish Ameer Haider & Saif Ullah, 2023. "Democracy, Political Stability and Economic Growth: A Panel Data Analysis of Selected Asian Countries," Journal of Economic Impact, Science Impact Publishers, vol. 5(1), pages 92-99.
    2. Zeeshan, Muhammad & han, Jiabin & Rehman, Alam & Ullah, Irfan & Hussain, Arif & Alam Afridi, Fakhr E., 2022. "Exploring symmetric and asymmetric nexus between corruption, political instability, natural resources and economic growth in the context of Pakistan," Resources Policy, Elsevier, vol. 78(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. James A Kahn & Jong-Soo Lim, 2001. "Finite Horizons, Political Economy, and Growth," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 4(1), pages 1-25, January.
    2. Pal Sudeshna, 2011. "Media Freedom and Socio-Political Instability," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 17(1), pages 1-23, March.
    3. Bordo, Michael D. & Rousseau, Peter L., 2006. "Legal-political factors and the historical evolution of the finance-growth link," European Review of Economic History, Cambridge University Press, vol. 10(3), pages 421-444, December.
    4. Takahiro SATO, 2017. "India in the World Economy: Inferences from Empirics of Economic Growth," ESRI Discussion paper series 338, Economic and Social Research Institute (ESRI).
    5. Durlauf, Steven N. & Quah, Danny T., 1999. "The new empirics of economic growth," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 4, pages 235-308, Elsevier.
    6. Fischer, Justina A.V., 2012. "The choice of domestic policies in a globalized economy: Extended Version," MPRA Paper 37816, University Library of Munich, Germany.
    7. Celal Kucuker, 2003. "Türkiye Ýktisat Kongresi Büyüme Stratejileri Çalýþma Grubu," Working Papers 2003/5, Turkish Economic Association.
    8. Laura Recuero Virto & Denis Couvet & Frédéric Ducarme, 2018. "The determinants of economic growth in countries with high marine biodiversity," Working Papers 2018.03, FAERE - French Association of Environmental and Resource Economists.
    9. Ang, James B. & Fredriksson, Per G., 2018. "State history, legal adaptability and financial development," Journal of Banking & Finance, Elsevier, vol. 89(C), pages 169-191.
    10. Brunetti, Aymo & Kisunko, Gregory & Weder, Beatrice, 1998. "Credibility of Rules and Economic Growth: Evidence from a Worldwide Survey of the Private Sector," The World Bank Economic Review, World Bank, vol. 12(3), pages 353-384, September.
    11. Fischer, Justina A.V., 2012. "The choice of domestic policies in a globalized economy," Papers 306, World Trade Institute.
    12. Xiaodong Gong & Maheshwar Rao, 2014. "‘The Economic Impact of Prolonged Political Instability: A Case Study of Fiji’," NATSEM Working Paper Series 14/26, University of Canberra, National Centre for Social and Economic Modelling.
    13. Ladislava Grochová & Luděk Kouba, 2011. "Political instability and economic growth: an empirical evidence from the Baltic states," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 59(2), pages 81-88.
    14. Gasmi, Farid & Recuero Virto, Laura & Couvet, Denis, 2023. "An empirical analysis of economic growth in countries exposed to coastal risks - Implications for their ecosystems," TSE Working Papers 23-1399, Toulouse School of Economics (TSE).
    15. Nazeer, Abdul Malik & Masih, Mansur, 2017. "Impact of political instability on foreign direct investment and Economic Growth: Evidence from Malaysia," MPRA Paper 79418, University Library of Munich, Germany.
    16. Kulsoom Rani & Zakia Batool, 2016. "Impact of Political Instability and Foreign Direct Investment on Economic Development in Pakistan," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 6(2), pages 83-89, February.
    17. Gasmi, Farid & Recuero Virto, Laura & Couvet, Denis, 2023. "An empirical analysis of economic growth in countries exposed to coastal risks: Implications for their ecosystems," Economic Systems, Elsevier, vol. 47(4).
    18. Mounir MARZOUGUI, 2016. "L’impact de l’instabilité politique sur la volatilité de l’inflation dans les pays en développement," Journal of Academic Finance, RED research unit, university of Gabes, Tunisia, vol. 7(1), June.
    19. Hajamini, Mehdi & Falahi, Mohammad Ali, 2018. "Economic growth and government size in developed European countries: A panel threshold approach," Economic Analysis and Policy, Elsevier, vol. 58(C), pages 1-13.
    20. Farid Gasmi & Laura Recuero Virto & Denis Couvet, 2020. "The Impact of Renewable Versus Non-renewable Natural Capital on Economic Growth," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 77(2), pages 271-333, October.

    More about this item

    Keywords

    GDP growth; Political stability; European Union;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ovi:oviste:v:xix:y:2019:i:1:p:8-14. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gheorghiu Gabriela (email available below). General contact details of provider: https://edirc.repec.org/data/feoviro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.