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A PLS path model to investigate the relations between institutions and human development

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  • S. Terzi
  • A. Trezzini
  • L. Moroni

Abstract

The paper studies the relations between institutions and human development, in particular the causal effects of the different types of institutions on different components of human development. We assume development to be created by aggregate demand; in particular that aggregate demand determines the material components of human development. We thus divide institutions into those that create demand and those that are determined by the whole process of development. Similarly we divide human development in its three traditional components (economic development, health, knowledge). Both human development and institutions are assumed to be multidimensional constructs; all the main components of these constructs are defined as latent variables, and the relations between them as structural relations. A partial least squares (PLS) path model is developed: it is the aggregation (and simultaneous estimation) of an outer model relating observed or manifest variables to their own latent variable and of a structural model (inner model) relating some endogenous latent variable to other latent variables. From the goodness of fit point of view, our results seem to validate our theoretical assumptions. Copyright Springer Science+Business Media Dordrecht 2014

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  • S. Terzi & A. Trezzini & L. Moroni, 2014. "A PLS path model to investigate the relations between institutions and human development," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(3), pages 1271-1290, May.
    • Handle: RePEc:spr:qualqt:v:48:y:2014:i:3:p:1271-1290
    DOI: 10.1007/s11135-013-9834-4
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    5. Sorin Romulus Berinde & Partenie Dumbrava, 2015. "CORPORATE GOVERNANCE CHOICE REGARDING SMEs FINANCING STRATEGIES IN ROMANIA," JOURNAL STUDIA UNIVERSITATIS BABES-BOLYAI NEGOTIA, Babes-Bolyai University, Faculty of Business.
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    More about this item

    Keywords

    Structural equations models; Institutions; Human development; Economic growth;
    All these keywords.

    JEL classification:

    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • C40 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - General
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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