IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v198y2021ics0165176520304195.html
   My bibliography  Save this article

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

Author

Listed:
  • 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.

Suggested Citation

  • 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
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176520304195
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2020.109659?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Acemoglu, Daron & Johnson, Simon & Robinson, James A., 2005. "Institutions as a Fundamental Cause of Long-Run Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 6, pages 385-472, Elsevier.
    2. Michael R. M. Abrigo & Inessa Love, 2016. "Estimation of panel vector autoregression in Stata," Stata Journal, StataCorp LP, vol. 16(3), pages 778-804, September.
    3. Annamaria Nifo & Gaetano Vecchione, 2014. "Do Institutions Play a Role in Skilled Migration? The Case of Italy," Regional Studies, Taylor & Francis Journals, vol. 48(10), pages 1628-1649, October.
    4. Guido Tabellini, 2010. "Culture and Institutions: Economic Development in the Regions of Europe," Journal of the European Economic Association, European Economic Association, vol. 8(4), pages 677-716, June.
    5. Robert J. Barro, 1999. "Determinants of Democracy," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages 158-183, December.
    6. Dani Rodrik & Arvind Subramanian & Francesco Trebbi, 2004. "Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development," Journal of Economic Growth, Springer, vol. 9(2), pages 131-165, June.
    7. Andrews, Donald W. K. & Lu, Biao, 2001. "Consistent model and moment selection procedures for GMM estimation with application to dynamic panel data models," Journal of Econometrics, Elsevier, vol. 101(1), pages 123-164, March.
    8. Baumol, William J., 1996. "Entrepreneurship: Productive, unproductive, and destructive," Journal of Business Venturing, Elsevier, vol. 11(1), pages 3-22, January.
    9. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
    10. Michael R.M. Abrigo & Inessa Love, 2016. "Estimation of Panel Vector Autoregression in Stata: a Package of Programs," Working Papers 201602, University of Hawaii at Manoa, Department of Economics.
    11. Kaufmann, Daniel & Kraay, Aart & Mastruzzi, Massimo, 2010. "The worldwide governance indicators : methodology and analytical issues," Policy Research Working Paper Series 5430, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    2. 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.
    3. 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.
    4. Gnangnon, Sèna Kimm, 2023. "Effects of the Utilization of Non-Reciprocal Trade Preferences Offered by QUAD Countries on Economic Growth in Beneficiary Countries," KDI Journal of Economic Policy, Korea Development Institute (KDI), vol. 45(1), pages 33-68.
    5. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andrea Lasagni & Annamaria Nifo & Gaetano Vecchione, 2015. "Firm Productivity And Institutional Quality: Evidence From Italian Industry," Journal of Regional Science, Wiley Blackwell, vol. 55(5), pages 774-800, November.
    2. Lidia Mannarino & Valeria Pupo & Fernanda Ricotta, 2016. "Family Firms and Productivity: The Role of Institutional Quality," International Journal of Business and Management, Canadian Center of Science and Education, vol. 11(10), pages 343-343, September.
    3. Rodríguez-Pose, Andrés & Ketterer, Tobias, 2016. "Institutions vs. ‘First-Nature’ Geography – What Drives Economic Growth in Europe’s Regions?," CEPR Discussion Papers 11322, C.E.P.R. Discussion Papers.
    4. Focacci, Chiara Natalie & Kovac, Mitja & Spruk, Rok, 2023. "Ethnolinguistic diversity, quality of local public institutions, and firm-level innovation," International Review of Law and Economics, Elsevier, vol. 75(C).
    5. Paul-Olivier Klein & Rima Turk-Ariss, 2022. "Bank capital and economic activity," Post-Print hal-03955630, HAL.
    6. Joan Costa-Font & Cristina Vilaplana-Prieto, 2023. "‘Investing’ in care for old age? An examination of long-term care expenditure dynamics and its spillovers," Empirical Economics, Springer, vol. 64(1), pages 1-30, January.
    7. Kannyiri Banyen & Nicholas Biekpe, 2020. "Financial integration, competition and bank efficiency: evidence from Africa’s sub-regional markets," Economic Change and Restructuring, Springer, vol. 53(4), pages 495-518, November.
    8. Abebe Hailemariam & Tutsirai Sakutukwa & Ratbek Dzhumashev, 2021. "Long-term determinants of income inequality: evidence from panel data over 1870–2016," Empirical Economics, Springer, vol. 61(4), pages 1935-1958, October.
    9. Charfeddine, Lanouar & Zaouali, Sana, 2022. "The effects of financial inclusion and the business environment in spurring the creation of early-stage firms and supporting established firms," Journal of Business Research, Elsevier, vol. 143(C), pages 1-15.
    10. Vo, Long Hai & Le, Thai-Ha, 2021. "Eatery, energy, environment and economic system, 1970–2017: Understanding volatility spillover patterns in a global sample," Energy Economics, Elsevier, vol. 100(C).
    11. Cajas-Guijarro, John & Pérez-Almeida, Bryan, 2021. "Comercio, sobreexplotación laboral y ciclos en la periferia: una propuesta teórica y el caso ecuatoriano desde un modelo PVAR. || Trade, super-exploitation of labor power and cycles in the periphery: ," Revista de Métodos Cuantitativos para la Economía y la Empresa = Journal of Quantitative Methods for Economics and Business Administration, Universidad Pablo de Olavide, Department of Quantitative Methods for Economics and Business Administration, vol. 31(1), pages 161-197, June.
    12. Mohamed Traoré, 2018. "Government spending and inclusive growth in sub-Saharan Africa: A panel VAR analysis," CERDI Working papers hal-01940506, HAL.
    13. Bhattacharya. Rudrani, 2017. "Effectiveness of monetary policy in stabilising food inflation: Evidence from advanced and emerging economies," Working Papers 17/209, National Institute of Public Finance and Policy.
    14. In Do Hwang, 2017. "Which Type of Trust Matters?:Interpersonal vs. Institutional vs. Political Trust," Working Papers 2017-15, Economic Research Institute, Bank of Korea.
    15. Minhas Akbar & Ammar Hussain & Ahsan Akbar & Irfan Ullah, 2021. "The dynamic association between healthcare spending, CO2 emissions, and human development index in OECD countries: evidence from panel VAR model," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(7), pages 10470-10489, July.
    16. Daniel Oto Peralías & Daniel Oto-Peralías & Diego Romero-Ávila, 2012. "Tracing the Link between Government Size and Growth: The Role of Public Sector Quality," EcoMod2012 4015, EcoMod.
    17. Barbaros Güneri & A. Yasemin Yalta, 2021. "Does economic complexity reduce output volatility in developing countries?," Bulletin of Economic Research, Wiley Blackwell, vol. 73(3), pages 411-431, July.
    18. Myriam Gómez-Méndez & Erwin Hansen, 2021. "Economic policy uncertainty and presidential approval: Evidence from Latin America," PLOS ONE, Public Library of Science, vol. 16(3), pages 1-17, March.
    19. López-Mendoza, Héctor & González-Álvarez, María A. & Montañés, Antonio, 2024. "Assessing the effectiveness of international government responses to the COVID-19 pandemic," Economics & Human Biology, Elsevier, vol. 52(C).
    20. Sigmund, Michael & Ferstl, Robert, 2021. "Panel vector autoregression in R with the package panelvar," The Quarterly Review of Economics and Finance, Elsevier, vol. 80(C), pages 693-720.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:198:y:2021:i:c:s0165176520304195. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.