Anh Hong Viet Nguyen
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Role of institutional quality in economic development: A case study of Asian countries
Oanh Kim Thi Tran , Hac Dinh Le , Anh Hong Viet Nguyen doi: http://dx.doi.org/10.21511/ppm.19(2).2021.29Problems and Perspectives in Management Volume 19, 2021 Issue #2 pp. 357-369
Views: 1286 Downloads: 1825 TO CITE АНОТАЦІЯThe paper investigates the impact of institutional quality on economic growth by taking 48 countries in Asia between 2005 and 2018. By using the quantile regression methods with panel data, institutional quality is found to be a key factor of economic development. However, in the lower-income Asian countries, the institution with better quality appears to promote the growth more effectively than in the higher-income ones. Moreover, the paper also finds out a nonlinear relationship between institutions and economic growth. The results show that there is an institutional threshold for economic growth to reach its highest level. If the institution indicator exceeds the threshold, it causes the reverse effect on the growth. Moreover, the economic growth of Asian countries is also affected by inflation (INF), labor force (LABO), trade openness (OPEN), and infrastructure (TELE). From that, the study suggests some policy implications for Asian countries and Vietnam, in particular, in order to improve institutions contributing to economic growth.