scholarly journals How do Poverty and Income Inequality affect Economic Growth in Developing Countries?

2021 ◽  
Vol 4 (2) ◽  
pp. 547-558
Author(s):  
Hamza Saleem ◽  
Fatima Farooq ◽  
Muhammad Aurmaghan
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Panel Data ◽  
Income Inequality ◽  
Negative Impact ◽  
Positive Impact ◽  
Development Indicators ◽  
The Relationship ◽  
Positive Effect ◽  
World Development

The major objective of this research is to examine the relationship between poverty, income inequality and economic growth from some selected developing countries. This study uses panel data for the period of 2002-2015. All the data is taken from world development indicators (WDI). To find out the results, we have used Hausman test an econometrics technique for panel data in this research. The results of the study indicate that poverty and income inequality have a negative impact on economic growth on the other hand Gross capital formation, labor force, total population and government consumption and expenditure have a positive impact on economic growth. The result tells us that changes in these variables have a significant and positive effect on the dependent variable. To achieve the goal of economic growth developing countries should reduce poverty and take meaningful steps to overcome the problem of inequality in the society which can be very helpful in achieving the goal of economic growth.

The impacts of sector growth and monetary policy on income inequality in developing countries

2019 ◽  
Vol 46 (3) ◽  
pp. 591-610 ◽  
Author(s):  
Sima Siami-Namini ◽  
Darren Hudson
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Monetary Policy ◽  
Panel Data ◽  
Income Inequality ◽  
Nonlinear Effect ◽  
Service Sector ◽  
Functional Form ◽  
Content Type ◽  
The Relationship

PurposeThe purpose of this paper is to explore the effect of growth in different sectors of the economy of developing countries on income inequality and analyze how inflation, as a proxy for monetary policy, makes a proportionate contribution for setting a binding national target for reducing income inequality. The paper examines the existence of a linear or nonlinear effect of inflation and sectoral economic growth on income inequality using a balanced panel data of 92 developing countries for the period of 1990–2014.Design/methodology/approachMethods section includes several steps as below: first, the functional form of the model using panel data for investigating the contribution of economic sectors in income inequality; second, to estimate the relationship between income inequality and sector growth: testing the Kuznets hypothesis; third, to estimate the relationship between inflation and income inequality base on general functional form of the model proposed by Amornthum (2004); fourth, a panel Granger causality analysis based on a VECM approach.FindingsThe statistically significant finding shows that first agricultural growth and then industrial growth have a dominate impact in reducing income inequality in our sample. But, the service sector growth has positive effects. The results confirm the existence of Kuznets inverted “U” hypothesis for industry growth and Kuznets “U” hypothesis for service sector growth. The findings show that sector growth and inflation affect income inequality in the long-run.Originality/valueThis research is an original paper which analyzes the effect of growth in different sectors of the economy of developing countries (agriculture, manufacturing and services sectors) on income inequality and test the Kuznets hypothesis in terms of sector growth and at the same time, examine the existence of a linear/nonlinear effect of inflation and sectoral economic growth on income inequality and test Granger causality relationship between income inequality and sector growth and inflation.

scholarly journals Population, Poverty and Economic Development Nexus: Empirical Study of Some Selected Developing Countries

2018 ◽  
Vol 6 (4) ◽  
Author(s):  
Muhammad Sibt e Ali ◽  
Syed Muhammad Faraz Raza ◽  
Syed Muhammad Faraz Raza ◽  
Naeem ul Din ◽  
Syed Zain Ul Abidin
Keyword(s):  
Developing Countries ◽  
Economic Development ◽  
Panel Data ◽  
Developing Economies ◽  
Negative Impact ◽  
Positive Impact ◽  
Value Added ◽  
Fixed Effect Model ◽  
Effect Model ◽  
Positive Effect

The major objective of this research is to examine the connection among poverty, population growth and its impact on economic development of different developing countries. This research comprised of panel data for period of 2002-2015. The data has been taken World Bank Indicator (WDI) for twenty six developing countries. To find out the results we use panel data. For the analysis of data we have applied Hausman and Fixed Effect Model in this study. Findings of the study indicate that the consumption of government, export, gross capital formation and industrial value added have positive impact on growth of developing economies. The results show that the variation in these variables has positive effect on dependent variables. On the other hand, economic growth increases due to positive changes in this variable. It is seen in this study that population and poverty has negative impact on GDP per capita in selected developing countries.

Examining the FDI–Growth Nexus in BRICS: Panel Data Evidence

2021 ◽  
pp. 001946622110360
Author(s):  
Bashir Ahmad Joo ◽  
Sana Shawl
Keyword(s):  
Economic Growth ◽  
Panel Data ◽  
Direct Investment ◽  
Negative Impact ◽  
Positive Impact ◽  
Fdi Inflows ◽  
Jel Codes ◽  
Explanatory Variables ◽  
Domestic Investments ◽  
The Relationship

The purpose of this article is to examine the relationship between foreign direct investment (FDI) and economic growth in Brazil, Russia, India, China and South Africa (BRICS) economies, which are considered to be the fastest-growing economies and dominant players in the global investment landscape. In order to assess the relationship between the dependent variable (economic growth) and explanatory variables (FDI inflows and other growth determinants), we analyse a 32-year panel data starting from 1987 to 2018 using feasible generalised least squares (FGLS) method. The article found a significant positive FDI impact on economic growth in BRICS. However, exports, human capital and inflation (macroeconomic instability) exert a negative impact on economic growth of BRICS, whereas domestic investments exert a positive impact on growth. JEL Codes: F21, F43, C23, O47

scholarly journals The Dynamic Relationship between Inequality and Sustainable Economic Growth

2020 ◽  
Vol 12 (14) ◽  
pp. 5740 ◽  
Author(s):  
Hwan-Joo Seo ◽  
HanSung Kim ◽  
Young Soo Lee
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Income Inequality ◽  
Growth Model ◽  
Capital Accumulation ◽  
Negative Impact ◽  
Positive Impact ◽  
Dynamic Relationship ◽  
Negative Effect ◽  
Sustainable Economic Growth

This study empirically tests the effects of income inequality on growth for 43 countries from 1991 to 2014 based on a cumulative growth model. The results show that, first, the estimation results using a reduced equation reveal a positive correlation between the income inequalities of lagging countries and the respective growth gaps with the frontier country. This confirms that the increase in income inequality negatively affects growth. Secondly, a cumulative growth model using 3SLS estimation shows that income inequality has a negative effect only on investment. However, we fail to find correlations between technological innovation and income inequality and between human capital accumulation and income inequality. Considering that investment has a positive impact on productivity, we conclude that income inequality has a negative impact on investment and that the resulting sluggish investment has a negative impact on productivity, which in turn negatively influences growth. Third, contrary to Kaldor and Barro’s prediction, we find that income inequality in developing countries is negatively correlated with growth, particularly for investment. The effects of income inequality on investment are found to be similar in both developed and developing countries. We also find region-specific differences in the paths through which income inequality affects sustainable economic growth.

scholarly journals THE EFFECTS OF R&D EXPENDITURES ON ECONOMIC GROWTH IN OECD COUNTRIES

2020 ◽  
Vol 1 (2) ◽  
pp. 175
Author(s):  
Amanah Abdulkadir ◽  
Wendra Afriana ◽  
Harry Azis
Keyword(s):  
Economic Growth ◽  
Negative Impact ◽  
Positive Impact ◽  
Internet Access ◽  
Oecd Countries ◽  
Short Term ◽  
General Hypothesis ◽  
Government Research ◽  
The Relationship ◽  
Positive Effect

This study investigates the relationship between R&D and economic growth in 33 OECD countries. This research uses panel data method. The results showed that there are three independent variables that affect economic growth. Namely, gross domestic expenditure on R&D, government research, and internet access. However, gross domestic expenditure on R&D and government research has a negative impact on economic growth. With the t-statistics of -2.944775 and -0.203002, respectively. While the t-statistic for internet access variable is 2.460783. This shows that only the internet access variable has a positive effect on economic growth. Meanwhile, the variable access to computers from home does not affect economic growth, because the probability is 0.0674 or> 0.05. These findings do not support the general hypothesis that R&D expenditures will have a positive impact on economic growth. The research agenda must be clear, substantive and short-term and must be implemented as a consideration in making decisions. So that every investment in R&D spending provides benefits with the hope of creating new innovations, so that the Indonesian economy grows positively.

scholarly journals Economic Growth and Income Inequality in Developing Countries

2015 ◽  
Vol 9 (6) ◽  
pp. 79-82 ◽  
Author(s):  
Morteza Nemati ◽  
Ghasem Raisi
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Income Inequality ◽  
Income Distribution ◽  
Economic System ◽  
Development Strategy ◽  
Low Income ◽  
Poverty Eradication ◽  
The Relationship ◽  
Selection Of

Nowadays, improvement in income distribution and poverty eradication and hence low inequality are served as the main objectives of economic and social development strategy even prior than primary tasks of governments. to manifest importance of income distribution, some economists adopt income inequality and income distribution in society as criteria for economic system of the community, although these criteria and measures are theoretical for the economic system and this varies from the perspective of different people, however, it denotes on  importance of income distribution among individuals. The main objective of this study was to evaluate the effect of economic growth on income inequality in the selection of low-income developing countries.To this end, using panel data and data for 28 developing countries over the period 1990-2010 the relationship between GDP and the Gini coefficient was examined. The results indicate that as per hypothesis Kuznets in the early stages of growth, income inequality increases and then it declines in later stage.

scholarly journals INVESTASI ASING LANGSUNG DAN PERTUMBUHAN EKONOMI DI WILAYAH ASEAN PERIODE 2004-2016

2019 ◽  
Vol 23 (2) ◽  
pp. 57-66
Author(s):  
Aditya Febriananta Putra ◽  
Suyanto . ◽  
Irzameingindra Putri Radjamin
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Significant Role ◽  
Direct Investment ◽  
Negative Impact ◽  
Positive Impact ◽  
Accelerate Development ◽  
Fixed Capital Formation

Exertions to accelerate development carried out by developing countries in general are oriented towards improving or improving people’s lives. Developing countries are characterized as countries that lack capital, savings and investment. The role of Labor has a significant effect but has a negative impact on economic growth. Agriculture and Service also performance a significant role, despite having a positive impact on economic growth. While other variables, namely Fixed Capital Formation, Foreign Direct Investment, Export, Manufacture, and Fertility showed insignificant results on economic growth.

scholarly journals An Analysis of Host Country Characteristics that Determine FDI in Developing Countries: Recent Panel Data Evidence

2009 ◽  
Vol 14 (2) ◽  
pp. 71-96 ◽  
Author(s):  
Muhammad Tariq Majeed ◽  
Eatzaz Ahmad
Keyword(s):  
Developing Countries ◽  
Panel Data ◽  
Multinational Corporations ◽  
Host Country ◽  
Negative Impact ◽  
Positive Impact ◽  
Negative Effects ◽  
Host Countries ◽  
Country Characteristics ◽  
General Method Of Moments

This paper analyzes a range of host country characteristics that determine foreign direct investment (FDI) flows to developing countries, using panel data on 72 countries for the period 1970-2008. Keeping in view the endogeneity problem of the chosen host country’s characteristics, the model is estimated using the General Method of Moments (GMM) technique. The analysis shows that gross domestic product (GDP), economic growth, and per capita income positively affect FDI—a result consistent with the market-seeking behavior of multinational corporations (MNCs). Furthermore, we find that remittances have a significant and positive impact on FDI. On the other hand, inflation and the balance of payments deficit have negative effects on FDI. MNCs are attracted to host countries that are outward looking and follow trade-promoting policies. This is confirmed by the positive effect of openness on FDI flows to developing countries. The study also finds that the effect of military expenditures on FDI is negative and significant. Finally, our analysis finds that the real exchange rate has a significantly negative impact on FDI.

The Relationship Between Economic Growth and Innovation

2020 ◽  
pp. 358-382
Author(s):  
Samet Akça ◽  
Bilge Afşar
Keyword(s):  
Economic Growth ◽  
Panel Data ◽  
Unit Root ◽  
Oecd Countries ◽  
Patent Applications ◽  
The Relationship ◽  
Positive Effect

This chapter studies innovation and economic growth and emphasizes their relationship. In this context; innovation and economic growth outputs of 16 OECD countries between 2005 and 2015 are analyzed. GDP is considered as economic growth variable, R&D investments in GDP (%), and patent applications are considered as innovation variables. In light of these variables, panel data analyze is used. Unit root, Pedroni co-integration and FMOLS tests were applied with the order. As a result, the increase in patent applications and R&D investments was found to have a positive effect on economic growth.

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