Fiscal Policy, Institutions and Economic Growth in Asian Economies: Evidence from the Pedroni’s Cointegration Approach

Abdullah, Hussin; Habibullah, Muzafar Shah; Baharumshah, Ahmad Zubaidi

doi:10.5539/ijbm.v3n4p107

Cited by 5 publications

(6 citation statements)

References 36 publications

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“…They investigated the impact of fiscal policy and institutions on economic growth for Pakistan and found the same results that growth cannot be achieved fully until and unless the institutions of country are not working properly. Abdullah et al (2008) investigated the impact of fiscal policy and institutions on GDP per capita of Asian countries for years 1982–2001 using the Pedroni Cointegration test. They documented a positive relation among these three variables.…”

Section: Literature Reviewmentioning

confidence: 99%

Fiscal policy, institutions and inclusive growth: evidence from the developing Asian countries

Sabir

Qamar

2019

IJSE

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Purpose The purpose of this paper is to examine the impact of fiscal policy and institutional quality on the inclusive growth process of the selected developing Asian countries. Inclusive growth is a growth process which ensures that everyone is participating and benefited by growth process. Design/methodology/approach This study uses system generalized method of moment to address the problem of endogeneity and omitted variable bias. Findings Empirical results showed that both fiscal policy and institutions have positive effects on inclusive growth. Our empirical results confirmed that fiscal policy can work more efficiently in the presence of good quality institutions in the developing Asian countries. Research limitations/implications Government should take measures to improve infrastructure, roads and transport system, and main share of government expenditures should be allocated to development, education and health projects. There is a need to transform the tax structure of the countries with the huge emphasis on the progressive tax system and this is likely to benefit the lower segment of the population. There is a need to develop institutions as they serve as a road map for the development of a country. There should be coordination between government policies and institutions. Supervision of fiscal policy through good institutions is needed for the proper allocation and utilization of public resources. Practical implications By restructuring the taxation system subject to the provision of quality institutions, government can incentivize entrepreneurs to make significant investments. This creates jobs for lower segment of a society, brings down poverty and increases the income level of a country. This increases the individual and collective welfare of an economy that ensures the inclusive growth within a country. Originality/value In this study, proxies used for fiscal policy are government expenditures and tax revenues as a percentage of gross domestic product (GDP) to examine its impact on the certain measures of inclusive growth such as employment, income inequality and GDP per capita. This study provides useful insights for the policy makers using fiscal policy to achieve the goal of inclusive growth in developing countries.

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Section: Literature Reviewmentioning

confidence: 99%

Fiscal policy, institutions and inclusive growth: evidence from the developing Asian countries

Sabir

Qamar

2019

IJSE

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“…The inappropriateness of financial reporting in some EU member states -see the case of Greece -has highlighted the need for improved public sector management and governance in the euro area. The effectiveness of government expenditure policies, in terms of better macroeconomic performance (Abdullah et al, 2008;Lee, 2016) is highly dependent on the quality of the fiscal data used by countries.…”

Section: Theoretical Background and The Development Of The Hypothesismentioning

confidence: 99%

Running the Obstacle Race towards Public Accounting Harmonization in EU-28: A Temporal Study

Sforza¹,

Cimini²

2017

IJBM

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The European Commission has recently started a project aimed at harmonizing EU public accounting systems through the development of European Public Sector Accounting Standards (EPSAS). The project is a response to the lack of coherence between primary public-sector accounts and government financial statistics, in order to strengthen the economic governance structure in the euro area. This paper aims to show that the divergences (adjustments) between the measures of surplus/deficit in governmental (working balance, WB) and national accounting (net borrowing lending, NBL) vary over time to provide future research opportunities around the factors that, affecting temporal divergences between these measures, enhance fiscal fragility within the EU public sector accounting system. By analysing the Excessive Deficit Procedure (EDP) tables issued by 28 EU countries over the period 2010-2015, the paper uses novel approaches in measuring adjustments based on network analysis and regression models, showing that they are significantly different over time.

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“…Thus, the Pedroni Cointegration test with multiple regressors and the Fully Modified OLS are suited in this analysis for heterogeneous panel data of unskilled labour demand are employed (Hassan, et al, 2014 andAbdullah, et al, 2007). The Unit Root test for panel should be executed first so that the stationary of data can be determined.…”

Section: Estimation Proceduresmentioning

confidence: 99%

The Impact of Foreign Labour on the Unskilled Labour Demand in Malaysia

Abdullah¹,

Azam²,

Abdullah³

2015

MJSS

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The main objective of this study is more on the unskilled labour input where the unskilled labour market is going to build across the Malaysian major sectors. It is evident that Malaysia has a large foreign labour market because of excess demand for labour, easily filled by foreign workers. For empirical investigation, this study uses a panel data analysis that consists of 12 years data of agriculture, manufacturing, and services sectors. The result of the Pedroni cointegration test shows that there are four out of seven panel statistics suggest the unskilled labor demand model is integrated within sectors. By using Fully Modified OLS (FMOLS), the finding demonstrates that only agriculture has long run-positive relationship with unskilled labor employment since this sector creates highest unskilled labor demand to fulfil the current production capacity and force this sector to hire also foreign labour.

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Fiscal Policy, Institutions and Economic Growth in Asian Economies: Evidence from the Pedroni’s Cointegration Approach

Cited by 5 publications

References 36 publications

Fiscal policy, institutions and inclusive growth: evidence from the developing Asian countries

Fiscal policy, institutions and inclusive growth: evidence from the developing Asian countries

Running the Obstacle Race towards Public Accounting Harmonization in EU-28: A Temporal Study

The Impact of Foreign Labour on the Unskilled Labour Demand in Malaysia

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