Determining the Optimal Threshold Government Size and its Productivity Application of the Threshold Panel Data Approach in Selected OPEC Countries

Sokhanvar, Mohammad

doi:10.30473/egdr.2018.4544

Document Type : ORIGINAL ARTICLE

Author

Mohammad Sokhanvar

Assistant Professor of Economics, Urmia Branch, Islamic Azad University, Urmia, Iran

https://doi.org/10.30473/egdr.2018.4544

Abstract

In this paper, government expenditure productivity has been studied in selected countries that are member in Organization of Petroleum Exporting Countries (OPEC) and optimum threshold government size of these countries is determined. For this reason, endogenous Barrow growth model is used that practically applied by Karras. Panel data threshold approach is applied. The reason for selecting these countries for study is that these countries have the same government financial structure such that a high share of budget of these countries depend on the oil revenue. According to available data, eight countries are selected and the period under study is from 2000 to 2014. Estimation findings show that optimum threshold government size of these countries have been estimated 13/58. In addition, findings indicate that before the threshold government size, the productivity of government size has been positive and approximately 0/72 and after the threshold government size, the productivity of government size has been negative and approximately -0/23.

Keywords

20.1001.1.22285954.1397.8.32.7.6

Main Subjects

OPEC

References

آقازاده بکتاش، فرانک و دیزجی، منیره (1396). "تأثیر کارایی هزینه و اندازه دولت بر رشد اقتصادی کشورهای منتخب جهان". فصلنامه علمی پژوهشی پژوهش‌های رشد و توسعه اقتصادی، دوره 7، شماره 27، 142-125.

دژپسند، فرهاد و گودرزی، حسین (1389). "اندازه دولت و رشد اقتصادی در ایران؛ روش رگرسیون آستانه‌ای". فصلنامه پژوهش‌های اقتصادی ایران، شماره 42، 207-183.

زراء نژاد، منصور و انواری، ابراهیم (1384)." کاربرد داده‌های ترکیبی در اقتصادسنجی". فصلنامهبررسی‌های اقتصادی، شماره 4، 51-21.

محمدزاده، پرویز؛ ممی‌پور، سیاب و فشاری، مجید (1389). "کاربرد نرم‌افزار Stata در اقتصادسنجی". تهران، نور علم، چاپ اول، جلد اول.

محمدزاده، یوسف؛ حکمتی فرید، صمد و شریفی، المیرا (1396). "تأثیر اندازه دولت بر حکمرانی خوب و عملکرد اقتصادی در کشورهای منتخب". فصلنامه علمی پژوهشی پژوهش‌های رشد و توسعه اقتصادی، دوره 7، شماره 26، 112-97.

Altunc, O. F.& Aydin, C. (2013). “The Relationship between Optimal Size of Government and Economic Growth: Empirical Evidence from Turkey, Romania and Bulgaria”. Procedia- Social and Behavioral Sciences, 92, 66–75.

Aly, H. & Strazicich, M. (2000). “Is Government Size Optimal in the Gulf Countries of The Middle East? An Empirical Investigation”. International Review of Applied Economics, 14(4), 475-483.

Anaman, K. (2004). “Determinants of Economic Growth in Brunei Darussalam”. Journal of Asian Economics, 15(4), 777-796.

Aschauer, D. (1989). “Is Government Spending Productive?”. Journal of Monetary Economics, 23, 177-200.

Asimakopoulos, S. & Karavias, Y. (2016). “The Impact of Government Size on Economic Growth: A Threshold Analysis”. Economics Letters, 139, 65-74.

Bajo_ Rubio, O. (2000). “A Further Generalization of the Solow Growth Model: the Role of the Public Sector”. Economic Letters, 68, 79-84.

Barro, R. J. & Sala-i-Martin, X. (1995). “Economic Growth”. New Delhi: McGraw-Hill.

Barro, R. J. (1990). “Government Spending in a Simple Model of Endogenous Growth”. Journal of Political Economy, 98, 103-125.

Chen, C., Yao, S., Hu, P. & Lin, Y. (2016). “Optimal Government Investment and Public Debt in an Economic Growth Model”. China Economic Review, Accepted Manuscript, 1-52.

Dar, A. & Amirkhalkhali, S. (2002). “Government Size, Factor Accumulation, and Economic Growth: Evidence from OECD Countries”. Journal of Policy Modeling, 24, 679-692.

Diamond, J. (1989). “Government Expenditure and Economic Growth: An Empirical Investigation”. IMF Working Paper, 45-89.

Dickenson, T. (1996). “Economics of the Public Sector”. McMillan Press ltd.

DiPeitro, W. R. & Anoruo, E. (2012). “Government Size, Public Debt and Real Economic Growth: a Panel Analysis”. Journal of Economic Studies, 39(4), 410–419.

Folster, S. & Henrekson, M. (1999). “Growth and the Public Sector: a Critique of the Critics”. European Journal of Political Economy, 15, 337–358.

Gonz_Alez, A., Terasvirta, T. & Van Dijk, D. (2005). “Panel Smooth Transition Regression Models”. Research Paper 165, Quantitative Finance Research Centre, University of Technology, Sidney.

Gwartney, J., Lawson, R. & Holcombe, R. (1998). “The Size and Functions of Government and Economic Growth”. Joint Economic Committee, Jim Saxton, Chairman.

Hansen, B. E. (1999). “Threshold Effects in Non-Dynamic Panels: Estimation, Testing, and Inference”. Journal of Econometrics, 93, 345-368.

Hanson, P. & Henrekson, M. (1994). “A New Framework for Testing the Effect of Government Spending on Growth and Productivity”. Public Choice, 81, 381-401.

Javaid Attaria, M. & Javed, A. (2013).“Inflation, Economic Growth and Government Expenditure of Pakistan: 1980-2010”. Procedia Economics and Finance, 5, 58–67.

Karras, G. (1996). “The Optimal Government Size: Further International Evidence on the Productivity of Government Services”. Economic Inquiry, 34(2), 193-203.

Karras, G. (1997). “On the Optimal Government Size in Europe: Theory and Empirical Evidence”. The Manchester School, 3, 280-294.

Landau, D. (1983). “Government Expenditure and Economic Growth: A Cross-Country Study”. Southern Economic Journal, 49(3), 783-792.

Landau, D. (1986). “Government and Economic Growth in the Less Developed Countries: An Empirical Study for 1960-1980”. Economic Development and Cultural Change, 35(1), 35-75.

Lucas, Robert, E. (1988): “On the Mechanics of Economic Development”. Journal of Monetary Economics, 22, 3–42.

Ram, R. (1986). “Government Size and Economic Growth: A New Framework and Some Evidence from Cross_ Section and Time Series Data”. The American Economic Review, 76(1), 191-203.

Ram, R. (1989). “Government Size and Economic Growth: A New Framework and Some Evidence from Cross-Section and Time-Series data: Reply”. The American Economic Review, 79, 281–284.

Rao, B. (1989). “Government Size and Economic Growth: A New Framework and Some Evidence from Cross-Section and Time-Series Data: Comment”. The American Economic Review, 79(1), 272-280.

Rebelo, Sergio, T. (1991). “Long-Run Policy Analysis and Long-Run Growth”. Journal of Political Economy, 99(3), 500–521.

Romer, D. (1996). “Advanced Macroeconomics”. McGraw-Hill.

Slemrod, J. (1995). “What Do Cross-Country Studies Teach about Government Involvement, Prosperity, and Economic Growth?”. Brookings Papers on Economic Activity, University of Michigan, 373-431.

Wang, Q. (2015). “Fixed-Efect Panel Threshold Model Using Stata”. Stata Journal, 15(1), 121-134.

Economic Growth and Development Research

Determining the Optimal Threshold Government Size and its Productivity Application of the Threshold Panel Data Approach in Selected OPEC Countries

References

References

Volume 8, Issue 32
October 2018
Pages 124-111

Determining the Optimal Threshold Government Size and its Productivity Application of the Threshold Panel Data Approach in Selected OPEC Countries

References

References

Volume 8, Issue 32October 2018Pages 124-111

Volume 8, Issue 32
October 2018
Pages 124-111