Comparative Economics: Determinants of Economic Growth Research Paper

This report, titled "Determinants of Economic Growth: A Cross-Country Empirical Study," investigates the factors influencing economic growth across different countries. The study begins with an abstract, introduction, and literature review, discussing previous research on the topic. The paper outlines the research problem, objectives, and organization. It describes the data sources, including the World Bank and World Economic Forum, and explains the use of both qualitative and quantitative data. The empirical model focuses on variables such as democracy, rule of law, education, capital formation, infrastructure, and financial sector reforms. The report highlights that one model cannot fit all countries, emphasizing the need for tailored indicators based on each country's economic, social, and political parameters. The conclusion suggests developing approximate models and categorizing countries for a more effective analysis of economic growth determinants. References to relevant studies by Barro (1996), Petrakos & Arvanitidis (2008), Dritsakis, Varelas & Adamopoulos (2006), and others are included.

Comparative Economics
1. Abstract
This paper is develop to identify indicator for economic growth, which is a very
exhaustive subject matter and needs a lot of time and effort, because many studies on
this topic have already been done over the last many years. So, this write-up will be
just a very small effort in this regards.
As per the outcome of this study, it seems, one model cannot be sufficient for all types
of economies, it required developing exclusive model for every level of economy. The
crux of this study is that one type of determinants for economic growth cannot fit for
all types of economies or economic level, like, developed, developing, and poor.
Developed countries has different set of requirement, whereas, developing and poor
countries have different set of requirements and needs. One set of countries has partial
democracy, whereas, another set of countries has authoritarian regime, so it is a
complex issue, that is why need exhaustive study to arrive at some kind of near
perfect model for determining indicators for economic growth.
2. Introduction
As topic of this study suggest, “
Determinants of Economic Growth: A Cross-Country
Empirical Study.” It would try to identify what could be the determinants of Economic
growth with some appropriate evidences to p support your arguments. As it is consider that
economic growth depends upon many factors or variable in absence of those important
variable economic growth can not taken place in sustained manner, these could be prevailing
law and order, GDP/GDP growth rate, Per capita income, FDI flow, Status of physical
infrastructure, etc. (Agarwal, P. 2019).
The main purpose of this paper is to identify some of the important factors responsible for
economic growth of a country. Once this research study is complete, one can able to identify
some of important variable on which economic growth is based upon or economic growth is
determined of a country.

This study will be organized in following sequence: Starting from problem statement and
purpose to ending the report with conclusion and recommendation, if any (Chirwa, T., &
Odhiambo, N. 2016). This report/study will go like this:
1. Problem statement, purpose
2. Background literature
3. Variables and Hypotheses
5. Research design and Methodology
8. Data Collection
9. Data Analysis and Report writing
10. Conclusions, Recommendations
3. Literature
One of most relevant study which directly related to this study was conducted
by Rober J. Barro in 1996, which has discussed in very detail about the factors real
per capita GDP, growth rate, level of schooling, life expectancy, lower fertility, lower
government, consumption, maintenance of law & order, lower inflation, democracy,
terms of trade and its impact on determining economic growth of a country, This was
a very exhaustive study conducted from data collected from 1960-1990 of almost 100
countries. These empirical data has shown that initial level of democracy help
stimulates economy but once democracy develop it does not help in that proportions
in initial level. Other factor like law and order, GDP growth certainly help accelerate
economic growth in a country (Barro, 1996).
In another elaborated article published in 2008 by Prof. George Petrakos and
Paschalis Arvanitidis titled ‘Determinants of Economic Growth’. This article deals
about determining factor for economic growth of a country, in this write-up
information were collected through the set of questionnaire addressed to various
intelligentsia groups like academicians, policy makers, and business worlds people
and based on that factors were tried to identify and what is the degree of significance

of these factors in economic growth determination also dealt with (Petrakos &
Arvanitidis, 2008).
In one more study done by three writers Nikolaos Dritsakis, Erotokritos Varelas and
Antonios Adamopoulos combined. It is about variable which help determine
economic growth of countries. Through empirical study of causal relationship among
variable such as exports, gross capital formation, foreign direct investments and
economic growth using a econometric multivariate autoregressive Var model for a
specific country Greece over the period 1960-2002. This study show that there is
unidirectional relationship among various factor like exports, gross fixed capital
formation, foreign direct investment and economic growth exists. These factors of
economic growth are proven facts and this study once again re-emphasised that facts
again (Dritsakis, Varelas & Adamopoulos, 2006).
The empirical study conducted by World Bank in 2009 to emphases up the point that
was discussed by many but not given as much importance as given in this article. It
discussed variables like price of investment goods, distance to major world cities in
determining economic growth of a country and also political rights of citizen in
determining economic growth of country was also given importance. It signify that
democratic values and rights of a citizen also play role in determining economic
growth of a country or countries (Moral-Benitoy, 2009). It explained about the
people’s political rights and its impact in an economic growth determinants, it also
emphasised on the price of investment goods and distance to world cities are the
determinants of economics growth of a country.
In a web article published and last modified in a February 2018 by Irfanullah Jan has
listed six factors which determines economic growth of a country. These factors he
classified in two categories four in demand side and two in supply side. (Jan, 2018)
Besides, above studies, scores of other studies were also done by various writers,
publishers and Institutions to identify the actual or approximate determinants of
economic growth but it is always difficult to identify one model for all economic
groups of countries.

4. Data Description
Data will be used by various sources like World Bank, world economic forum, etc. It
will be qualitative as well as quantitative data, primarily drawn from secondary
sources, because collecting primary data would take lot of time and resources as well.
5. The Model
It will be based on variable like level of democracy, Prevalence of rule of law (law and
order), Educational system and quality of education, capital formation, Infrastructure
creation, and financial sector reforms.
6. Empirical results
The results of various studies conducted by various organisations were varied in nature,
it will be appropriate to say that one model cannot fit for all country. Every country has
own sets of economic indicator, which is needs to be focus on. Developing and
developed countries has own set of economic growth indicators, Developing countries
and poor countries has different parameter to emphasised upon to arrive at appropriate
model for determining indicator for economic growth.
7. Research Conclusions
It will be difficult to identify exact dominants for economic growth but some kind of
approximate model can be develop for based on various economic, social and political
parameter of a country. It will be herculean task to develop one model foe every level of
economies and also it will be inappropriate to judge every country through on lens.
Every model has some kind of limitation that is why it cannot fit for all economy for
every level of economy it required to develop different sets of indicator for economic
growth. To develop an appropriate indicator all countries need to be divided in 3 to 4
categories, and after that, based on their level of development and socio-economic and
political indicator model can be develop after thorough analysis of cross country data as

well as various governments functioning, like democracy and democratic values to
identify qualitative data.
References
Agarwal, P. (2019). What is Economic Growth? | Intelligent Economist. Retrieved 17 August 2019,
from https://www.intelligenteconomist.com/economic-growth/
Barro, J. R. (1996). Determinants of Economic Growth: A Cross-Country Empirical Study. Retrieved
16 August 2019, from https://www.nber.org/papers/w5698.pdf
Chirwa, T., & Odhiambo, N. (2016). Macroeconomic Determinants of Economic Growth: A Review of
International Literature. South East European Journal Of Economics And Business, 11(2),
33-47. doi: 10.1515/jeb-2016-0009
Jan, I. (2018). Determinants of Economic Growth. Retrieved 16 August 2019, from
https://xplaind.com/810635/determinants-of-economic-growth
Lakhera, M. (2016). Determinants of Economic Growth in Developing Economies. Economic Growth
In Developing Countries, 24-55. doi: 10.1057/9781137538079_2
Moral-Benitoy, E. (2009). Determinants of Economic Growth: A Bayesian Panel Data Approach.
Retrieved 16 August 2019, from
https://openknowledge.worldbank.org/bitstream/handle/10986/4027/WPS4830.pdf;sequence
=1
Petrakos, P., & Arvanitidis, P. (2008). Determinants of Economic Grwoth. Retrieved 16 August 2019,
from https://pdfs.semanticscholar.org/78e3/eb18056dfffeab246cbd8252a4a87c7f1d44.pdf
Steps in Empirical Research. (2019). Retrieved 16 August 2019, from
http://web.csulb.edu/~msaintg/ppa696/696steps.htm