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Title Impact of Economic Freedom and Economic Growth: A Case Study of Asian Countries

Author(s) Saima Aslam

Abstract Abstract The phenomenon of economic growth has proved to be a necessary element in the prosperity of rich and poor economies. There are few factors involved in bringing the positive or negative results in the economic growth for different countries. Out of the various explanatory variables introduced in literature as factors of growth, yet this study highlights non-economic determinants of growth as this study is performed for analyzing the impact of economic freedom on economic growth for 42 Asian countries from 1995 to 2018. In order to examine impact on economic growth: overall score of economic and business freedoms, tax burdens, government integrity fiscal health, investment freedom, government spending, judicial effectiveness, property rights, labor freedom, monetary freedom, trade freedom, financial freedom, gross capital formation and employment to population ratio are taken as variables and used to carry out estimation of model. The descriptive analysis between economic freedom and economic growth is explained by Individual country analysis that shows the positive relationship between economic freedoms with economic growth. Panel data is used in this study by using some renowned techniques, such as fixed effect and random effect model. Thereafter, Hausman test is used to seek favorable results. According to Hausman test, fixed effect model is far dependable than that of random effect model by rejecting the null hypothesis. There is some issue of endogenity, therefore generalized method of moment (GMM) is used which is developed by Arellano and Bond in 1991. It shows the positive and statistically significant impact of economic freedom on economic growth of Asian countries. The proximate reason behind positive and significant impact is that the freedom to people in controlling their lives under less government influence on economic affairs which further help increase higher economic growth. Key Words: Economic Freedom, Economic Growth, Gross Capital Formation, Employment to Population Ratio.

Type Thesis/Dissertation MS

Faculty Management Sciences

Department Economics

Language English

Publication Date 2020-11-30

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