The impact of good governance indicators on economic growth in selected MENA countries with emphasis on Afghanistan
Keywords:
Institutional Econimy, GoodGovernance Indicators, Economic growth, Afghanistan, GMM methodAbstract
This study examines the impact of institutional variables (good governance indicators) and control variables (capital formation, patents, human capital, trade openness, and FDI) on economic growth in a selection of MENA countries with strong institutional quality and weak institutional quality during the period 2005 to 2019 using the (GMM) method. The results indicate that the control variables and institutional quality have a positive and significant effect on GDP. This research shows that the effect of institutional quality indicators on GDP is greater in countries with weak institutional quality than in countries with strong institutional quality. Also, the findings show that the interaction of institutional quality with foreign investment has a positive and significant effect, and the interaction of institutional quality with the combination of foreign investment and trade openness has a negative and significant effect on GDP in countries with weak institutional quality. But in countries with strong institutional quality, the interaction of institutional quality with FDI had a negative and significant effect on GDP, and the interaction of institutional quality with FDI and trade openness did not have a significant effect on GDP.
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