How Does Governance Modify the Relationship between Public Finance and Economic Growth: A Global Analysis

Aiming to investigate the role of governance in modifying the relationship between public finance and economic growth, this study applied a seemingly unrelated regression model for the panel data of 38 developed and 44 developing countries from 1996 to 2016. It is easy to see that this research meas...

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Bibliographic Details
Main Author: Nguyen, Phuong Lien
Format: Article
Language:English
Published: H. : ĐHQGHN 2019
Subjects:
Online Access:http://repository.vnu.edu.vn/handle/VNU_123/63545
https://doi.org/10.25073/2588-1108/vnueab.4165
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Institution: Vietnam National University, Hanoi
Language: English
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Summary:Aiming to investigate the role of governance in modifying the relationship between public finance and economic growth, this study applied a seemingly unrelated regression model for the panel data of 38 developed and 44 developing countries from 1996 to 2016. It is easy to see that this research measures public finance by two parts of the subcomponents: total tax revenue and general government expenditure. We also call governance the “control of corruption indicator”. The finding indicates that governance always positively affects the economy. However, when it interacts with public finance, this interaction has a diverse effect on economic growth in developed countries, depending on tax revenue or government expenditure. Nevertheless, in developing countries, this interaction has a beneficial impact on the growth of an economy.