Public Spending, Income Inequality and Economic Growth in Asian Countries: A Panel GMM Approach
1
School of Economics, Dongbei University of Finance and Economics, Dalian 116025, China
2
School of International Economics, Dongbei University of Finance and Economics, Dalian 116025, China
3
School of Accounting, Dongbei University of Finance and Economics, Dalian 116025, China
4
School of Finance, Dongbei University of Finance and Economics, Dalian 116025, China
*
Author to whom correspondence should be addressed.
Economies 2019, 7(4), 115; https://doi.org/10.3390/economies7040115
Received: 5 June 2019 / Revised: 20 October 2019 / Accepted: 14 November 2019 / Published: 22 November 2019
(This article belongs to the Special Issue Structural transformation, poverty and income inequality)
This paper offers an empirical examination of the relationship between government spending’s, income inequality, and economic growth by using the case of 19 Asian countries from 2002 to 2017. For this purpose, the paper uses robust difference-GMM estimation and panel granger causality test. We found that gross domestic investment and regulatory quality are the main variables that contribute to these countries’ economic growth. While current government consumption reduces economic growth. Also, government expenditure on education and regulatory quality granger cause economic growth in these countries. However, the effect of government expenditure on education on economic growth is not significant. So, to increase their economic growth, this study recommends these countries’ governments to encourage gross domestic investment, maintain regulatory quality and reduce their current consumption. This study also concludes that income inequality has no impact on these countries’ economic growth for this period.
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Keywords:
public spending; income inequality; economic growth; Asian countries; panel data
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MDPI and ACS Style
Gnangoin, Y.T.B.; Du, L.; Assamoi, G.; Edjoukou, A.J.; Kassi, D.F. Public Spending, Income Inequality and Economic Growth in Asian Countries: A Panel GMM Approach. Economies 2019, 7, 115.
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