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Institutions-growth spatial dependence: An empirical test

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  • Ahmad, Mahyudin
  • Hall, Stephen G.

Abstract

Do institutions spatially affect growth? By employing a neoclassical growth model with institutional controls and augmenting the model with a formal spatial framework, this study finds evidence that institutions has spatial spillover effect on economic growth based on a panel observation from 58 developing countries for the period between 1985-2008. This study also shows that the spatial lag model is the most appropriate to model the spillover effect.

Suggested Citation

  • Ahmad, Mahyudin & Hall, Stephen G., 2012. "Institutions-growth spatial dependence: An empirical test," MPRA Paper 42360, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:42360
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    File URL: https://mpra.ub.uni-muenchen.de/42360/1/MPRA_paper_42360.pdf
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    References listed on IDEAS

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    1. Kelejian, Harry H. & Murrell, Peter & Shepotylo, Oleksandr, 2013. "Spatial spillovers in the development of institutions," Journal of Development Economics, Elsevier, vol. 101(C), pages 297-315.
    2. Arbia, Giuseppe & Battisti, Michele & Di Vaio, Gianfranco, 2010. "Institutions and geography: Empirical test of spatial growth models for European regions," Economic Modelling, Elsevier, vol. 27(1), pages 12-21, January.
    3. Easterly, William & Levine, Ross, 1998. "Troubles with the Neighbours: Africa's Problem, Africa's Opportunity," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 7(1), pages 120-142, March.
    4. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    5. Maarten Bosker & Harry Garretsen, 2009. "Economic development and the geography of institutions," Journal of Economic Geography, Oxford University Press, vol. 9(3), pages 295-328, May.
    6. Anselin, Luc & Bera, Anil K. & Florax, Raymond & Yoon, Mann J., 1996. "Simple diagnostic tests for spatial dependence," Regional Science and Urban Economics, Elsevier, vol. 26(1), pages 77-104, February.
    7. repec:cup:apsrev:v:98:y:2004:i:01:p:171-189_00 is not listed on IDEAS
    8. Harry Seldadyo & J. Paul Elhorst & Jakob De Haan, 2010. "Geography and governance: Does space matter?," Papers in Regional Science, Wiley Blackwell, vol. 89(3), pages 625-640, August.
    9. G. Faber & M.J. Gerritsen, 2009. "External influences on local institutions: spatial dependence and openness," Working Papers 09-11, Utrecht School of Economics.
    10. Peter Claeys & Fabio Manca, 2011. "A missing spatial link in institutional quality," Applied Economics Letters, Taylor & Francis Journals, vol. 18(3), pages 223-227.
    11. Nazrul Islam, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, Oxford University Press, vol. 110(4), pages 1127-1170.
    12. Derek D. Headey & Andrew Hodge, 2009. "The Effect of Population Growth on Economic Growth: A Meta-Regression Analysis of the Macroeconomic Literature," Population and Development Review, The Population Council, Inc., vol. 35(2), pages 221-248.
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    Citations

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    Cited by:

    1. Bologna, Jamie & Young, Andrew T. & Lacombe, Donald J., 2016. "A spatial analysis of incomes and institutional quality: evidence from US metropolitan areas," Journal of Institutional Economics, Cambridge University Press, vol. 12(01), pages 191-216, March.
    2. Ahmad, Mahyudin, 2018. "Globalization, economic growth, and spillovers: A spatial analysis," MPRA Paper 86252, University Library of Munich, Germany.
    3. Slesman, Ly & Baharumshah, Ahmad Zubaidi & Ra'ees, Wahabuddin, 2015. "Institutional infrastructure and economic growth in member countries of the Organization of Islamic Cooperation (OIC)," Economic Modelling, Elsevier, vol. 51(C), pages 214-226.
    4. Hall, Stephen G & Ahmad, Mahyudin, 2013. "Can Trust Explain Social Capital Effect on Property Rights and Growth?," MPRA Paper 48440, University Library of Munich, Germany.
    5. repec:spr:epolit:v:34:y:2017:i:3:d:10.1007_s40888-017-0057-3 is not listed on IDEAS

    More about this item

    Keywords

    Institutions; economic growth; spatial dependence; spillover effect; spatial lag model;

    JEL classification:

    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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