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INSTITUSI DAN PERTUMBUHAN EKONOMI

Department of Economic and Business, Universitas Diponegoro., Indonesia


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Abstract

Institutions are considered as a fundamental cause of long-run growth. This study empirically investigates the relationship between institutions and economic growth accross the world. The sample includes 110 countries during the years 2014 to 2019. The study specifically focuses on five measures of institutions, namely Civil Liberties, Political Rights, Corruption of Control, Political Stability, and Regulatory Quality. Using a panel data fixed effect with country and year effects, the result shows that only political stability is significant and positively associated with a higher economic growth. This implies, if a country become more politically stable, its economic growth tends to be higher.

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Keywords: Institution, Economic Growth, Fixed Effect Methods

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