The impact of institutional quality on economic growth: Evidence from post-Soviet countries
Vol. 16, No 1, 2023
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Ilkin Gasimov
Department of Economics, Baku Engineering University, Azerbaijan State University of Economics (UNEC), Azerbaijan ilqasimov@beu.edu.az ORCID 0000-0003-1388-7571 |
The impact of institutional quality on economic growth: Evidence from post-Soviet countries |
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Gadir Asgarzade
Department of Economics, Baku Engineering University, Azerbaijan State University of Economics (UNEC), Azerbaijan qasgarzada@beu.edu.az ORCID 0000-0003-3634-7822 Farid Jabiyev
Department of Economics, Baku Engineering University, Karabakh Economic Research Center, Azerbaijan State University of Economics (UNEC), Academy of the State Customs Committee (ASCCA), Azerbaijan fcebiyev@beu.edu.az ORCID 0000-0002-6675-0264
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Abstract. The paper investigates the long-run impact of the institutional environment on economic growth for the sample of post-Soviet countries in 1996-2021. Using the Autoregressive Distributive Lag Model, we found that a U-shaped link exists between institutional quality and economic growth. Regarding the institutional quality dimensions, a similar link was observed for four out of six factors (POLSTAB, GOVEFF, RULELAW, CONTCORR). In contrast, the other two dimensions (REGQUAL, VOACC) exhibited inverted U-shaped impact on the dependent variable. Moreover, findings provide insight into the impact of control variables such as inflation (INF), openness (OPE), and population growth rate (POPGROWTH) on economic growth. More precisely, openness was found to have positive impact on the dependent variable, while inflation and population growth rate both had negative effect on economic growth. Based on these results, the paper suggests some policy implications for post-Soviet countries in terms of achieving economic growth by improving the institutional quality environment. |
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Received: January, 2022 1st Revision: January, 2023 Accepted: March, 2023 |
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DOI: 10.14254/2071-8330.2023/16-1/5
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JEL Classification: O43, P20 |
Keywords: economic growth, institutional quality, post-Soviet countries, Autoregressive Distributed Lag model |
