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Purpose This study examines the impact of trade openness, human capital, public expenditure and institutional performance on unemployment in various income groups of Organization of Islamic Cooperation (OIC) countries. Design/methodology/approach Traditional panel data methodologies neglect the issue of cross-sectional dependence and provide ambiguous outcomes. A novel approach, “dynamic common correlated effects (DCCE)”, is utilized in this study to tackle with aforementioned issue. Pooled mean group (PMG) estimation is also applied to verify the robustness of the findings. Findings The long-run estimates show that trade openness has a significant and negative relationship with the unemployment rate in overall and lower-income OIC economies and a positive correlation with unemployment in higher-income OIC countries. Public expenditure is negatively and significantly correlated with unemployment in higher-income and overall OIC economies. Moreover, human capital reduces unemployment in higher-income and overall OIC countries while increases unemployment in lower-income OIC economies. Practical implications The research tends to endorse the argument for continuous trade openness policy along with efficient use of public expenditure and improved institutional performance to reduce unemployment in OIC countries. Originality/value The DCCE approach in this research considers heterogeneity and cross-sectional dependence between cross-sectional units and thus gives robust outcomes.

The study analyzes the impact of trade openness, human capital, and institutional performance on economic growth in OIC countries. The traditional methodologies of panel data ignore the issues of cross-sectional dependence (CD) and heterogeneity and give spurious results. A novel econometric technique "dynamic common correlated effects (DCCE)" is used to tackle these issues. The long-run estimates indicate that trade openness, human capital, and public expenditure have a positive and significant association with economic growth for higher-income and overall OIC countries. However, trade openness has a negative, and human capital has an insignificant correlation with economic growth in lower-income OIC countries. Institutional performance is positively correlated with economic growth in all groups of OIC countries. The study tends to support the call for the continuation of trade openness and human capital formation policies for overall and higher-income OIC countries to get benefits in the form of economic growth.

This paper attempts to empirically examine the determinants of service export in selected developing Asian countries (China, Hong Kong, South Korea, India, Iran, Indonesia, Malaysia, Philippines, Singapore, Thailand, Kuwait, Saudi Arabia and Turkey). The study conducted a static linear panel data analysis on annual data covering the period of 1985-2012. The main finding indicates that exchange rate, foreign income, foreign direct investment (FDI), the value added by services and communication facilities are likely to influence services exports in the selected developing Asian countries. This suggests that these countries have the opportunity to compete globally by exporting services, provided that they are able to exploit and enhance their potential by focusing on the significant and relevant indicators. Keywords: Services Exports; Asian Developing Countries; Panel Data.