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Public Spending and Economic Growth in Latin America Countries: A Panel Fixed Effect Analysis

Author

Listed:
  • Yobouet Thierry Bienvenu Gnangoin

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

  • Akadje Jean-Roland 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

Purpose: This article studies the effects of public expenditure on economic growth in Latin America countries (LAC), especially the role played by foreign aid and public and private investment. Design/methodology/approach: Granger causality approach and Fixed effect method. Findings: There is bidirectional causality between investment climate improvement, domestic investment and economic growth. Also, private investment, population growth rate, investment climate improvement and corruption reduction lead these countries economic growth. Research limitations/implications: In these countries, to manage economic growth governments have to pay attention on population growth rate , level of corruption, domestic and private investment. Originality/value: There are numerous studies regarding the impact of public spending on economic growth, but this study focus on developing countries especially on one area which is Latin America Countries. Also, it shows that, additionally to private investment, domestic investment, population growth rate and corruption are economic growth determinants in this area.

Suggested Citation

  • Yobouet Thierry Bienvenu Gnangoin & Akadje Jean-Roland Edjoukou & Diby François Kassi, 2019. "Public Spending and Economic Growth in Latin America Countries: A Panel Fixed Effect Analysis," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Democritus University of Thrace (DUTH), Kavala Campus, Greece, vol. 12(1), pages 50-63, April.
    • Handle: RePEc:tei:journl:v:12:y:2019:i:1:p:50-63
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    Cited by:

    1. 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.

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    More about this item

    Keywords

    Public spending; Panel fixed effect; Panel causality test;
    All these keywords.

    JEL classification:

    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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