Growth Empirics With Institutional Measures for Transition Countries

Grogan, Louise; Moers, Luc

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Growth Empirics With Institutional Measures for Transition Countries

Elsevier, Economic Systems 25 (2001) 323-344

22 Pages Posted: 19 Jun 2013

See all articles by Louise Grogan

Louise Grogan

University of Guelph - Department of Economics; IZA Institute of Labor Economics; Global Labor Organization (GLO); University of Central Asia (UCA)

Luc Moers

University of Guelph - Department of Economics and Finance

Date Written: January 1, 2001

Abstract

This paper investigates the importance of institutions as a determinant of growth and foreign direct investment (FDI) in 25 transition countries for 1990-1998. It introduces some novel institutional measures, performs extensive sensitivity tests, and checks for reverse causation. Estimation results suggest that state institutions in particular are quite robustly important for growth and FDI. The relationship between institutions and growth is likely to be a causation; that between institutions and FDI less so. The significance of macroeconomic stabilization and liberalization is also confirmed, but multi-collinearity problems make it impossible to properly judge their importance relative to that of institutions.

Keywords: transition economics, growth empirics, institutions, policy reform

JEL Classification: O11, O17, P21, P24, P27

Suggested Citation: Suggested Citation

Grogan, Louise A. and Moers, Luc, Growth Empirics With Institutional Measures for Transition Countries (January 1, 2001). Elsevier, Economic Systems 25 (2001) 323-344, Available at SSRN: https://ssrn.com/abstract=2280867