TITLE:
Institutional Quality and the Public Investment-Growth Relationship in Vietnam
AUTHORS:
Nguyen Van Bon
KEYWORDS:
Public Investment, Institutional Quality, Economic Growth, Difference Panel GMM, Provinces of Vietnam
JOURNAL NAME:
Theoretical Economics Letters,
Vol.9 No.4,
March
29,
2019
ABSTRACT: Questions concerning the relationship between public
capital spending and economic growth under different institutional environments
are of great analytical and empirical interest. This paper investigates the
role of institutional quality in the public investment-growth relationship for
a balanced panel data of 52 provinces in Vietnam during the period 2005-2014
through the estimation method of difference panel GMM Arellano-Bond. The
results show twofold. First, public investment and institutional quality
significantly promote economic growth, but their interaction term impedes it.
Second, the public investment-growth relationship is positive under good
institutional environment and negative under poor one. These findings suggest
some important policy implications related to public capital spending in
developing countries.