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Granger Causal Nexus between Good Public Governance and Unemployment: Evidence from Cross-Country Panel Data Investigation

1
Faculty of Economics and Business Administration, Babeş-Bolyai University, 400591 Cluj-Napoca, Romania
2
Faculty of Business, Babeş-Bolyai University, 400174 Cluj-Napoca, Romania
*
Author to whom correspondence should be addressed.
J. Risk Financial Manag. 2021, 14(2), 63; https://doi.org/10.3390/jrfm14020063
Received: 28 December 2020 / Revised: 28 January 2021 / Accepted: 29 January 2021 / Published: 3 February 2021
(This article belongs to the Section Applied Economics and Finance)
The purpose of this paper is to investigate the causality between good public governance captured through six World Bank governance indicators and unemployment rate (unemployment as % of the total labour force) as a clear indicator of labour market performance. Although some previous papers have empirically demonstrated the casual nexus between country-level governance and economic development, this study investigates the relation of causality between public governance and the labour market. By employing Granger non-causality tests, we tested two hypotheses with regard to this nexus. We argue that bidirectional Granger causality is predominant for the relation of country-level governance and unemployment. Finally, our paper offers a complex quantitative analysis of the causal nexus between public governance quality and one of the most known labour market activity indicators for an extended panel dataset of countries worldwide for 10 years. View Full-Text
Keywords: country-level governance; unemployment as % of the total labour force; Granger non-causality test; vector error correction model; sustainable economic development country-level governance; unemployment as % of the total labour force; Granger non-causality test; vector error correction model; sustainable economic development
MDPI and ACS Style

Boţa-Avram, C.; Groşanu, A.; Răchişan, P.-R.; Berinde, S.R. Granger Causal Nexus between Good Public Governance and Unemployment: Evidence from Cross-Country Panel Data Investigation. J. Risk Financial Manag. 2021, 14, 63. https://doi.org/10.3390/jrfm14020063

AMA Style

Boţa-Avram C, Groşanu A, Răchişan P-R, Berinde SR. Granger Causal Nexus between Good Public Governance and Unemployment: Evidence from Cross-Country Panel Data Investigation. Journal of Risk and Financial Management. 2021; 14(2):63. https://doi.org/10.3390/jrfm14020063

Chicago/Turabian Style

Boţa-Avram, Cristina, Adrian Groşanu, Paula-Ramona Răchişan, and Sorin R. Berinde 2021. "Granger Causal Nexus between Good Public Governance and Unemployment: Evidence from Cross-Country Panel Data Investigation" Journal of Risk and Financial Management 14, no. 2: 63. https://doi.org/10.3390/jrfm14020063

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