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Drivers of Growth in Fast Emerging Economies: A Dynamic Instrumental Quantile Approach

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  • Asongu, Simplice

Abstract

This study complements the scarce literature on growth determinants in fast emerging economies of the BRICS and MINT by assessing the determinants throughout the conditional distributions of the growth rate and real GDP output for the period 2001-2011. An instrumenal variable (IV) quantile regression approach is complemented with Two-Stage-Least Squares and IV Least Absolute Deviations. The instrumentation process is dynamic. The following findings are established. First, while Gross FDI has a negative effect on economic growth, the impact of Net FDI is positive, with a higher magnitude in top quantiles of the distributions. Second, the positive effect of natural resources is more apparent in countries with low initial growth levels. Third, the impact of telecommunications infrastructure is not very significant. Fourth, whereas the incidence of bank credit is positive for GDP growth, it is negative for real GDP output. Fifth, while trade openness is positive in bottom quantiles of GDP growth, but for the highest quantile in real GDP output, it is consistently negative on real GDP output. Sixth, while the incidence of political stability is negative on GDP growth, it is positive on real GDP output, with the negative (positive) effect apparent only in top (bottom) quantiles of GDP growth (real GDP output). Policy implications are discussed.

Suggested Citation

  • Asongu, Simplice, 2015. "Drivers of Growth in Fast Emerging Economies: A Dynamic Instrumental Quantile Approach," MPRA Paper 67309, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:67309
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    References listed on IDEAS

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    1. Augustin Kwasi Fosu, 2013. "Growth of African Economies: Productivity, Policy Syndromes and the Importance of Institutions," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 22(4), pages 523-551, August.
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    3. Simplice A. Asongu, 2013. "Investment And Inequality In Africa: Which Financial Channels Are Good For The Poor?," The African Finance Journal, Africagrowth Institute, vol. 15(2), pages 43-65.
    4. Pasquale Tridico, 2007. "The determinants of economic growth in emerging economies: a comparative analysis," Departmental Working Papers of Economics - University 'Roma Tre' 0075, Department of Economics - University Roma Tre.
    5. Simplice A. Asongu, 2015. "Finance and growth: new evidence from meta-analysis," Managerial Finance, Emerald Group Publishing, vol. 41(6), pages 615-639, June.
    6. Akpan, Uduak & Isihak, Salisu & Asongu, Simplice, 2014. "Determinants of Foreign Direct Investment in Fast-Growing Economies: A Study of BRICS and MINT," MPRA Paper 56810, University Library of Munich, Germany.
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    Cited by:

    1. Asongu, Simplice & Efobi, Uchenna & Beecroft, Ibukun, 2015. "FDI, Aid, Terrorism: Conditional Threshold Evidence from Developing Countries," EconStor Preprints 114569, ZBW - Leibniz Information Centre for Economics.
    2. Simplice A. Asongu, 2019. "Natural Resource Exports, Foreign Aid and Terrorism," Working Papers 19/023, European Xtramile Centre of African Studies (EXCAS).

    More about this item

    Keywords

    Economic Growth; Emerging countries; Quantile regression;

    JEL classification:

    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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