Public Spending, Income Inequality and Economic Growth in Asian Countries: A Panel GMM Approach
Abstract
:1. Introduction
2. Methodology
2.1. Database
2.2. Model
- Government expenditure into education ; which consists of current and capital public expenditure on education including government spending on educational institutions (both public and private), education administration as well as subsidies for private entities (students/households and other privates entities). It also includes expenditure funded by transfers from international sources to the government.
- Gross domestic investment (i.e., gross fixed capital formation) ; shows how much of the new value -added in the economy is invested rather than consumed.
- Current government consumption, (i.e., gross national expenditure) in GDP .
3. Results
3.1. Descriptive Statistics
3.1.1. Correlation Table
3.1.2. Graphs
3.2. Generalized Methods of Moments
3.3. Panel Unit Root Tests
3.4. Panel Causality Test
4. Discussion
5. Conclusions
Author Contributions
Funding
Conflicts of Interest
Appendix A
Country List
References
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Correlation Prob | GDP/K | EDU | EXP | GFCF | DGDP/K | INEQ | QUAL | STAB | TRADE |
---|---|---|---|---|---|---|---|---|---|
GDP/K | 1000 | ||||||||
EDU | −0.074 | 1000 | |||||||
(0.250) | |||||||||
EXP | 0.151 ** | −0.080 | 1000 | ||||||
(0.019) | (0.212) | ||||||||
GFCF | 0.205 *** | −0.062 | −0.199 *** | 1000 | |||||
(0.001) | (0.332) | (0.002) | |||||||
DGDP/K | 0.415 *** | −0.044 | 0.180 *** | 0.233 | 1.000 | ||||
(0.000) | (0.490) | (0.01) | (0.000) | ||||||
INEQ | 0.109 * | 0.067 | −0.095 | −0.016 | 0.129 | 1000 | |||
(0.089) | (0.299) | (0.141) | (0.802) | (0.043) | |||||
QUAL | −0.133 ** | 0.032 | −0.476 *** | −0.072 | −0.128 ** | −0.045 | 1000 | ||
(0.04) | (0.620) | (0.000) | (0.266) | (0.047) | (0.487) | ||||
STAB | 0.054 | −0.063 | −0.356 *** | 0.272 *** | 0.090 | −0.145 * | 0.671 | 1000 | |
(0.404) | (0.324) | (0.000) | (0.000) | (0.162) | (0.024) | (0.000) | |||
TRADE | −0.082 | −0.404 | −0.203 *** | −0.037 | −0.114 * | 0.059 | 0.215 *** | 0.179 *** | 1000 |
(0.201) | (0.555) | (0.001) | (0.568) | (0.076) | (0.362) | (0.001) | (0.005) |
Dependent Variable: Economic Growth GDP/K | ||||
---|---|---|---|---|
Robust | ||||
Variables | Coef. | Std err. | z-Statistic | p-Value |
Education expenditure | 0.676 | 0.696846 | −1.44 | 0.150 |
GFCF | 1.230 | 0.4980865 | 2.47 | 0.014 |
Expenditure | −0.3395 | 0.2002961 | −1.70 | 0.090 |
DGDP/K | −0.3562 | 0.0558764 | −6.37 | 0.000 |
Inequality | −0.0089 | 0.0496283 | −0.18 | 0.857 |
Quality | 21.5733 | 7.981728 | 2.70 | 0.007 |
Stability | −3.3348 | 2.849309 | −1.17 | 0.242 |
Trade | −0.0005 | 0.0016543 | −0.27 | 0.786 |
Hansen test (p-value) | 12.43 (0.983) | |||
AR1 test (p-value) | −2.72 (0.007) | |||
AR2 test (p-value) | −1.64 (0.102) |
Variables | Method | |
---|---|---|
Levin, Lin and Chu | Im, Pesaran and Shin | |
t * | W-Stat | |
Levels | ||
GDP/K | ||
Statistic | −11.2743 | −48.83512 |
Prob. | 0.000 | 0.000 |
EDU | ||
Statistic | −0.43792 | −0.84773 |
Prob. | 0.3307 | 0.1983 |
GFCF | ||
Statistic | −0.48289 | −0.37954 |
Prob. | 0.3146 | 0.3521 |
EXP | ||
Statistic | −2.26292 | −1.66095 |
0.0118 | 0.0484 | |
Prob. | ||
DGDP/K | −9.93266 | −7.65233 |
Statistic | 0.000 | 0.000 |
Prob. | −4.64969 | −0.82472 |
INEQ | 0.0000 | 0.2048 |
Statistic | ||
Prob. | −481.991 | −119.532 |
TRADE | 0.0000 | 0.0000 |
Statistic | ||
Prob. | −3.58048 | 2.72558 |
0.0002 | 0.0032 | |
QUAL | ||
Statistic | −5.13001 | −2.68411 |
0.0000 | 0.0036 | |
Prob. | ||
STAB | ||
Statistic | ||
Prob. | ||
First differences | ||
GDP/K | ||
Statistic | −12.6726 | −11.6579 |
Prob. | 0.0000 | 0.0000 |
EDU | ||
Statistic | −11.1007 | −10.3215 |
Prob. | 0.0000 | 0.0000 |
GFCF | ||
Statistic | 7.68336 | −6.59442 |
Prob. | 0.0000 | 0.0000 |
EXP | ||
Statistic | −12.5187 | −9.15777 |
Prob. | 0.0000 | 0.0000 |
DGDP/K | ||
Statistic | −13.1043 | −11.0041 |
Prob. | 0.0000 | 0.0057 |
INE | ||
Statistic | −3.19943 | −2.59115 |
Prob. | 0.0007 | 0.0048 |
TRADE | ||
Statistic | 6.97214 | −20.5656 |
1.0000 | 0.0000 | |
Prob. | ||
QUAL | ||
Statistic | −15.3506 | −12.5313 |
Prob. | 0.0000 | 0.0000 |
STAB | ||
Statistic | −15.5234 | −12.8721 |
Prob. | 0.0000 | 0.0000 |
Null Hypothesis | Zbar−Stat | Prob |
---|---|---|
EDU does not homogeneously cause GDP/K | 3.03699 | 0024 *** |
GDP/K does not homogeneously cause EDU | 0.48483 | 0.6278 |
EXP does not homogeneously cause GDP/K | −0.83736 | 0.4024 |
GDP/k does not homogeneously cause EXP | −1.81497 | 0.0695 * |
GFCF does not homogeneously cause GDP/k | 1.10840 | 0.2677 |
GDP/k does not homogeneously cause GFCF | 5.05260 | 4 × 107 *** |
INEQUALITY does not homogeneously cause GDP/k | 0.46454 | 0.6423 |
GDP/k does not homogeneously cause INEQUALITY | −1.03456 | 0.43009 |
TRADE does not homogeneously cause GDP/k | 0.99337 | 0.3205 |
GDP/k does not homogeneously cause TRADE | 2.63220 | 0.0085 *** |
QUALITY does not homogeneously cause GDP/k | 2.00298 | 0.0452 ** |
GDP/k does not homogeneously cause QUALITY | 1.27258 | 0.2032 |
STABILITY does not homogeneously cause GDP/k | −0.01308 | 0.9896 |
GDP/k does not homogeneously cause STABILITY | 2. | 0.0396 ** |
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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. https://doi.org/10.3390/economies7040115
Gnangoin YTB, Du L, Assamoi G, Edjoukou AJ, Kassi DF. Public Spending, Income Inequality and Economic Growth in Asian Countries: A Panel GMM Approach. Economies. 2019; 7(4):115. https://doi.org/10.3390/economies7040115
Chicago/Turabian StyleGnangoin, Yobouet Thierry Bienvenu, Liangsheng Du, GuyRoland Assamoi, Akadje JeanRoland Edjoukou, and Diby François Kassi. 2019. "Public Spending, Income Inequality and Economic Growth in Asian Countries: A Panel GMM Approach" Economies 7, no. 4: 115. https://doi.org/10.3390/economies7040115