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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.

Suggested Citation

  • Li, Kui-Wai, 2011. "The Optimal Level and Impact of Internal Factors on Growth," MPRA Paper 36419, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:36419
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    1. Ioana Andrada Moldovan (Gavril), 2015. "Does the Financial System Promote Sustainable Development? Evidence from Eastern European Countries," Central European Business Review, Prague University of Economics and Business, vol. 2015(2), pages 40-47.

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    More about this item

    Keywords

    Growth; external factors; domestic factors;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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