Regional Growth and Macroeconomic Indicators in Asian Countries: A Cointegration Analysis
This study analyses growth theories to estimate determinants of growth using panel data from 1985 to 2016 of selected Asian nations. The ARDL is applied here.
In the long- run foreign direct investment, gross capital formation, manufacturing value-added, and household final consumption expenditure cointegrate by growth. However, manufacturing output maintains an important encouraging relationship with growth and supports the Romer growth model findings. Though gross capital formation keeps notable discouraging relation concerning growth and fails to support structural change theory of development by Hollis B Chenery's. Foreign direct investment and household consumption (significant in short period) hold up an insignificant relationship with growth throughout the short and long-period.
This study calls the attention of policymakers to frame strategies to support the industrial sector by and build the necessary infrastructure to attract FDI.