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Local institutional quality and economic growth: A panel-VAR analysis of Italian NUTS-3 regions

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  • Corradini, Carlo

Abstract

We explore the relationship between institutional quality and economic growth across a panel of Italian NUTS-3 regions. Estimates from panel vector autoregressions provide robust evidence in support of a causal effect of institutional quality on growth. This is found to be particularly important in areas characterised by lower levels of economic development. Conversely, no evidence is found of reverse dynamics of economic growth on institutional quality. The results cast doubts on the view that policies focusing on economic growth per se may lead to a strong institutional context, suggesting intervention aimed at improving formal institutions to be a pre-requisite for sustained regional development.

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  • Corradini, Carlo, 2021. "Local institutional quality and economic growth: A panel-VAR analysis of Italian NUTS-3 regions," Economics Letters, Elsevier, vol. 198(C).
    • Handle: RePEc:eee:ecolet:v:198:y:2021:i:c:s0165176520304195
    DOI: 10.1016/j.econlet.2020.109659
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    Cited by:

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    2. Roberto Antonietti & Chiara Burlina, 2021. "Quality of institutions and standard of living: a panel cointegration analysis," Economics Bulletin, AccessEcon, vol. 41(3), pages 2074-2079.
    3. Gnangnon, Sèna Kimm, 2021. "Effect of the Utilization of Non-Reciprocal Trade Preferences offered by the QUAD on Economic Growth in Beneficiary Countries," EconStor Preprints 242848, ZBW - Leibniz Information Centre for Economics.
    4. Yu Cheng Lin & Sang Do Park, 2023. "Effects of FDI, External Trade, and Human Capital of the ICT Industry on Sustainable Development in Taiwan," Sustainability, MDPI, vol. 15(14), pages 1-24, July.
    5. Yosra Saidi & Anis Ochi & Samir Maktouf, 2023. "FDI inflows, economic growth, and governance quality trilogy in developing countries: A panel VAR analysis," Bulletin of Economic Research, Wiley Blackwell, vol. 75(2), pages 426-449, April.

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    More about this item

    Keywords

    Institutions; GDP growth; Regional development; Panel VAR; NUTS3 regions;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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