1- Ph.D. student in Economics, Department of Economics, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran.
2- Assistant Professor of Economics, Department of Economics, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran. ,sghobadi@iau.ac.ir
3- Associate Professor of Economics, Department of Economics, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran.
2- Assistant Professor of Economics, Department of Economics, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran. ,
3- Associate Professor of Economics, Department of Economics, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran.
Abstract: (728 Views)
According to institutional growth models, efficient institutions positively influence economic growth. Among these institutions, market institutions play a vital role by preventing market failures and enhancing resilience to economic shocks. Government integrity—specifically through reducing corruption—can further strengthen the impact of these institutions on growth. This article aims to analyze the threshold effects of market institutional quality on the economic growth of 19 selected lower-middle-income developing countries, with a focus on government integrity, over the period 2014–2022. To measure market institutional quality, this study uses an index composed of the market regulator (averaging indicators for regulations and controls in the credit and labor markets) and the market stabilizer (measured by access to sound money). The results indicate that government integrity acts as a transition variable in the economic growth model, with a threshold of 0.017% and two identified regimes, each showing a positive impact on growth. While the market institutional quality index does not significantly impact growth in the first regime, once the government integrity index crosses the threshold into the second regime, market institutional quality positively affects economic growth. Additional control variables—including human capital, capital per capita, technology, and foreign trade—also demonstrate positive effects on economic growth
Keywords: : Economic Growth, Market Stabilizing Institutions, Market Regulating Institutions, Government Integrity, Sound Money.
Type of Study: Research |
Subject:
economic development, regional economics and growth
Received: Apr 27 2024 | Accepted: Jul 02 2024 | ePublished: Jul 02 2024
Received: Apr 27 2024 | Accepted: Jul 02 2024 | ePublished: Jul 02 2024
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