Determinants of Economic Growth: Evidence from High and Low-Income Country Panels

Abstract

The global economic recovery is not balanced. There are significant differences in the growth rates of different countries. At the same time, the connections between various markets are becoming increasingly close. Businesses and policymakers need to assess which countries have greater growth potential. They also have to think about some risks like supply chain disruptions, geopolitical conflicts, and trade barriers. Our research considers the determinants of economic growth in countries at different stages of development. The research uses a panel regression model. The model incorporates dummy variables for high-income countries and interaction terms. This enables a comparison of the growth patterns between high-income economies and low-income economies. The research mainly focuses on five factors. They are investment, human capital, infrastructure, institutional quality and research and development expenditure. This study will compare the roles of these factors in different income countries. The research results can provide references for corporate investment. They also help governments formulate policies.