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Public Spending, Income Inequality and Economic Growth in Asian Countries: A Panel GMM Approach

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  • Yobouet Thierry Bienvenu Gnangoin

    (School of Economics, Dongbei University of Finance and Economics, Dalian 116025, China)

  • Liangsheng Du

    (School of Economics, Dongbei University of Finance and Economics, Dalian 116025, China)

  • GuyRoland Assamoi

    (School of International Economics, Dongbei University of Finance and Economics, Dalian 116025, China)

  • Akadje JeanRoland Edjoukou

    (School of Accounting, Dongbei University of Finance and Economics, Dalian 116025, China)

  • Diby François Kassi

    (School of Finance, Dongbei University of Finance and Economics, Dalian 116025, China)

Abstract

This paper offers an empirical examination of the relationship between government spending’s, income inequality, and economic growth by using the case of 19 Asian countries from 2002 to 2017. For this purpose, the paper uses robust difference-GMM estimation and panel granger causality test. We found that gross domestic investment and regulatory quality are the main variables that contribute to these countries’ economic growth. While current government consumption reduces economic growth. Also, government expenditure on education and regulatory quality granger cause economic growth in these countries. However, the effect of government expenditure on education on economic growth is not significant. So, to increase their economic growth, this study recommends these countries’ governments to encourage gross domestic investment, maintain regulatory quality and reduce their current consumption. This study also concludes that income inequality has no impact on these countries’ economic growth for this period.

Suggested Citation

  • Yobouet Thierry Bienvenu Gnangoin & Liangsheng Du & GuyRoland Assamoi & Akadje JeanRoland Edjoukou & Diby François Kassi, 2019. "Public Spending, Income Inequality and Economic Growth in Asian Countries: A Panel GMM Approach," Economies, MDPI, vol. 7(4), pages 1-15, November.
    • Handle: RePEc:gam:jecomi:v:7:y:2019:i:4:p:115-:d:290017
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    2. Gilbert Nartea & Jacqueline Hernandez, 2020. "Government Size, the Composition of Public Spending and Economic Growth in Netherland," Journal of Accounting, Business and Finance Research, Scientific Publishing Institute, vol. 9(2), pages 82-89.
    3. Michael Adusei & Ngozi Adeleye & Anthony Okafor, 2021. "Drivers of credit union penetration: An international analysis," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(3), pages 710-723, April.
    4. Sugata Marjit & Ritwik Sasmal & Joydeb Sasmal, 2020. "Composition of public expenditure and growth of per capita income in Indian states: a political perspective," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 22(1), pages 1-17, June.
    5. António Afonso & Gabriela Baquero Fraga, 2024. "Government spending efficiency in Latin America," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 51(1), pages 127-160, February.
    6. Chroufa, Mohamed Ali & Chtourou, Nouri, 2023. "Financial development threshold effect on wealth inequality-economic growth nexus: Evidence from MENA economies," The Journal of Economic Asymmetries, Elsevier, vol. 28(C).
    7. Egla Mansi & Eglantina Hysa & Mirela Panait & Marian Catalin Voica, 2020. "Poverty—A Challenge for Economic Development? Evidences from Western Balkan Countries and the European Union," Sustainability, MDPI, vol. 12(18), pages 1-24, September.
    8. Burak Erkut, 2022. "Renewable Energy and Carbon Emissions: New Empirical Evidence from the Union for the Mediterranean," Sustainability, MDPI, vol. 14(11), pages 1-15, June.
    9. Yolanda Yolanda & Suharto Suharto & Wahyu Murti & Sugeng Haryono, 2023. "How to Determinant Economic Growth In Java Island," Technium Social Sciences Journal, Technium Science, vol. 45(1), pages 183-195, July.
    10. Mohamed Ali Chroufa & Nouri Chtourou, 2022. "Inequality and Growth in Tunisia: New Evidence from Threshold Regression," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 163(2), pages 901-924, September.
    11. Gautam Negi, 2021. "Fiscal Impulse And Sectoral Output €“ Evidence From Indian States," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 28, pages 151-167, December.

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