The effect of corruption on economic growth in southeast asia countries

UNIVERSITY OF ECONOMICS HO CHI MINH CITY VIETNAM INSTITUTE OF SOCIAL STUDIES THE HAGUE THE NETHERLANDS VIETNAM - NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS THE EFFECT OF CORRUPTION ON ECONOMIC GROWTH IN ASIAN COUNTRIES BY LE KIM DUNG MASTER OF ARTS IN DEVELOPMENT ECONOMICS HO CHI MINH CITY, Dec 2016 UNIVERSITY OF ECONOMICS HO CHI MINH CITY VIETNAM INSTITUTE OF SOCIAL STUDIES THE HAGUE THE NETHERLANDS VIETNAM - NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS THE EFFECT OF CORRUPTION ON ECONOMIC GROWTH IN ASIAN COUNTRIES A thesis submitted in partial fulfillment of the requirements for the degree of MASTER OF ARTS IN DEVELOPMENT ECONOMICS BY LE KIM DUNG Academic supervisor Dr TRUONG DANG THUY HO CHI MINH CITY, Dec 2016 I CERTIFICATION I confirm that this paper, namely “The effect of corruption on economic growth in Asian countries” is my own work Where material has been used from other sources it has been properly acknowledged and referenced If this statement is untrue I understand that I will have committed an assessment offence I have read the Regulations of Vietnam – Netherlands Programme for M.A In Development Economics and I am aware of the potential consequences of any breach of them Signature: Name: Le Kim Dung Date: Ho Chi Minh City, Dec 2016 II ACKNOWLEDGEMENT I would like to express my gratitude to interesting and extensive Vietnam– Neitherlands Master Program in Development Economics, as well as honest thanks to many people who built and developed this program such as management board, lecturers, tutors, and librarians Fulfillment this course, I acquired useful knowledge, approached new things, were straightforward to expess ideas I would like to extend my special thanks to Dr Truong Dang Thuy, the academic supervisor who always read and correct my thesis carefully His valuable comments, guidances, and encouragement help me to improve the quality of my thesis and complete it timely I also would like to take this opportunity to express my thanks to Dr Nguyen Trong Hoai, Dr Pham Khanh Nam, other professors, tutors and course co-instructors of Economics University who, through their valuable lectures and advices, help me during the course Finally, many thanks and gratefulness are given to my dear family, my warm friends for their encouragement in many ways that strongly support me during my study stage III CONTENTS Certifications……………………………………………………………………………… I Acknowledment II Contents………………………………………………………………………………… III List of tables……………………………………………………………………………… IV List of figures V Abstract………………………………………………………………………………… CHAPTER 1: INTRODUCTION 1.1 Research problem 1.2 Research objectives and research questions 1.2.1 Research objectives 1.2.2 Research questions 1.3 Thesis Structure CHAPTER 2: LITERATURE REVIEW 2.1 Theoretical concepts related to economic growth and corruption 2.2 Effect of corruption on economic growth: theoretical literatures 2.3 Effect of corruption on economic growth: empirical studies .11 2.3.1 The single equation approach 11 2.3.2 The system of equations approach 13 CHAPTER 3: METHODOLOGY AND DATA .21 3.1 General methods 21 3.1.1 Conceptual framework for the study .21 3.2 Research models and econometric methodology .25 3.2.1 Research models 26 3.2.2 Econometric methodology .29 3.3 Data 31 CHAPTER 4: ESTIMATION RESULT ANALYSIS AND DISCUSSION .34 4.1 Descriptive statistics analysis on the dataset 34 4.2 Regression results and discussion 42 4.2.1 Effects of corruption on economic growth directly 42 4.2.2 Effects of corruption on economic growth indirectly through transmitions channels 44 CHAPTER 5: CONCLUSION, LIMITATION AND FUTURE RESEARCH 52 5.1 Conclusion 52 5.2 Limitations and future research 52 5.2.1 Limitations .52 5.2.2 Suggestion for future research 53 REFERENCES…………………………………………………………………….… 55 APPENDIX Appendix A : Summary of empirical studies………………………………….…….63 Appendix B : Sample of countries.………………………………………………….68 Appendix C : Regression results…………………………………………………….69 IV.LIST OF TABLES Table 1: Expected sign of selected variables………………………….………….……….25 Table 2: Model specification of growth and transmission channel equations……….……29 Table 3: Summary of Variables ……………………………………………….…………32 Table 4: Descriptive statistics and correlations of selected variables………….………….36 Table 5: Correlations of selected variables…………………………………….………….37 Table 6: Results of Pooled OLS, Fixed effect model (FEM), and Random effect model (REM) in GDP regression model (Model 1)………………………………………………42 Table 7: Results of 3SLS regression in a system of structural equations…………………46 Table 8: Consequence of Corruption on Economic growth through transmission channels……………………………………………………………………………… … 47 V.LIST OF FIGURES Figure 1: The effect of Corruption on Economic growth………………………………….21 Figure 2: Scatter graph between Economic growth (GDP) and Corruption (CPI)……… 37 Figure 3: Scatter graph between Economic growth (GDP) and Political Instability (PI)…………………………………………………………………………………………38 Figure 4: Scatter graph between Economic growth (GDP) and Investment (I)………… 38 Figure 5: Scatter graph between Economic growth (GDP) and Human Capital (HC)……39 Figure 6: Scatter graph between Economic growth (GDP) and Trade Openness (OPEN) 39 Figure 7: Scatter graph between Economic growth (GDP) and Government Expenditure (GOV)………………………………………………………………………………… …39 Figure 8: Scatter graph between Corruption (CPI) and Investment (I)……………… …40 Figure 9: Scatter graph between Corruption (CPI) and Human Capital (HC)………….…40 Figure 10: Scatter graph between Corruption (CPI) and Political Instability (PI)…… …41 Figure 11: Scatter graph between Corruption (CPI) and Government Expenditure (GOV)41 Figure 12: Scatter graph between Corruption (CPI) and Trade Openness (OPEN)……….41 ABSTRACT Many theoretical and empirical studies suggest that economic growth depends on various factors such as physical capital, human capital, openness to trade, macroeconomic conditions, corruption perceptions, education, and population growth This study focuses on summarizing these studies and examining the total impact of corruption on economic growth Based on panel data included thirty Asian countries over the observation period 1996-2014, this paper applies both ordinary least square (OLS) technique and three-stages least square (3SLS) technique to determine how corruption impacts on economic growth directly and indirectly through five possible transmission channels: investment, human capital, political instability, government expenditure, and the openness of international trade In consistency with findings of the previous empirical researches, this paper concludes that the effect of corruption on the economic development of thirty Asian countries is significantly negative Keywords: economic growth, corruption, investment, human resource, political instability, government expenditure, openness to trade LE KIM DUNG Page LE KIM DUNG Page 10 Shapiro – Wilk W test for normality of residual in OLS regression (Model 1) swilk r Shapiro-Wilk W test for normal data Variable r Obs W V z Prob>z 253 0.82547 31.988 8.067 0.00000 Homoscedasticity of residuals test (Model 1) White’s test: estat imtest Cameron & Trivedi's decomposition of IM-test Source chi2 df p Heteroskedasticity Skewness Kurtosis 55.20 7.92 1.85 27 0.0011 0.2439 0.1738 Total 64.98 34 0.0011 Breusch - Pagan test: estat hettest Breusch-Pagan / Cook-Weisberg test for heteroskedasticity Ho: Constant variance Variables: fitted values of gdpgrowth chi2(1) Prob > chi2 = = 4.69 0.0304 Homoscedasticity of residuals test (Model 1)- Ramsey Reset test linktest Source Model Residual Total SS df 1782.76177 3450.07931 5232.84108 MS Number obs of F( 2, 250) Prob > F R-squared 891.380884 250 13.8003172 Adj R-squared = 0.3354 Root MSE = 3.7149 252 20.7652424 gdpgrowth Coef Std Err _hat _hatsq _cons 1.66222 -.0572969 -1.530081 2032026 0156345 6777408 = 253 = 64.59 = 0.0000 = 0.3407 t 8.18 -3.66 -2.26 P>|t| [95% Conf Interval] 0.000 0.000 0.025 1.262013 -.088089 -2.86489 2.062427 -.0265047 -.1952713 ovtest Ramsey RESET test using powers gdpgrowth Ho: model has F(3, 243) = Prob > F = of the fitted values of no omitted variables 9.12 0.0000 3SLS regression for several equations *Reg3 command with Gross domestic fixed investment (I) – proxy for capital reg3(gdpgrowth cpiunit piunit igrowth govgdp opengdp hc)( piunit cpiunit govgdp lngdpusd lnpop urbanpop dli dlmi dumi dhio dhino)( igrowth cpiunit hc lngdpusd opengdp dli dlmi dumi dhio dhino)( govgdp cpiunit hc lngdpusd urbanpop dli dlmi dumi dhio dhino)( opengdp cpiunit lngdpusd hc govgdp dli dlmi dumi dhio dhino)( hc cpiunit lngdpusd edugdp lnpop urbanpop dli dlmi dumi dhio dhino) Three-stage least-squares regression Equation Obs Parms RMSE "R-sq" chi2 P gdpgrowth piunit igrowth govgdp opengdp hc 185 185 185 185 185 185 9 9 10 4.006249 7128735 13.72176 11.00549 41.12856 12.30538 0.2516 0.4546 0.0995 0.2965 0.0833 0.6324 26.47 158.65 64.87 408.54 1336.21 8050.52 0.0002 0.0000 0.0000 0.0000 0.0000 0.0000 Coef Std Err z P>|z| [95% Conf Interval] gdpgrowth cpiunit piunit igrowth govgdp opengdp hc _cons -.5311143 3607524 2174544 -.098411 0118931 0128801 5.34869 4511615 1.313489 1126636 0643737 0133055 0281042 3.955681 -1.18 0.27 1.93 -1.53 0.89 0.46 1.35 0.239 0.784 0.054 0.126 0.371 0.647 0.176 -1.415375 -2.213638 -.0033621 -.2245811 -.0141851 -.0422031 -2.404302 353146 2.935143 438271 0277591 0379714 0679632 13.10168 piunit cpiunit govgdp lngdpusd lnpop urbanpop dli dlmi dumi dhio dhino _cons 291338 0050093 1211904 -.1801784 -.013966 -1.701556 -1.143323 -.6586265 -.7084234 -.1502332 075922 0079304 1167812 1244048 0056436 5428494 4378157 3635242 361688 (omitted) 1.428438 3.84 0.63 1.04 -1.45 -2.47 -3.13 -2.61 -1.81 -1.96 0.000 0.528 0.299 0.148 0.013 0.002 0.009 0.070 0.050 1425336 -.0105341 -.1076965 -.4240074 -.0250272 -2.765521 -2.001426 -1.371121 -1.417319 4401425 0205526 3500773 0636506 -.0029047 -.6375903 -.2852201 0538677 000472 -0.11 0.916 -2.94992 2.649453 igrowth cpiunit hc lngdpusd opengdp dli dlmi dumi dhio dhino _cons 3.784624 0460711 -3.762947 -.0847588 87.30483 97.5052 94.13109 81.44498 76.78346 2.470471 1449955 1.539685 0932207 39.52311 43.69549 47.39989 44.37718 42.40005 (omitted) 1.53 0.32 -2.44 -0.91 2.21 2.23 1.99 1.84 1.81 0.126 0.751 0.015 0.363 0.027 0.026 0.047 0.066 0.070 -1.057411 -.2381149 -6.780674 -.2674679 9.840956 11.86362 1.229012 -5.532695 -6.319112 8.626659 3302571 -.7452203 0979504 164.7687 183.1468 187.0332 168.4226 159.886 1.095067 1121554 6285869 0652022 18.20078 20.1155 21.41964 24.40042 22.22862 (omitted) 2.75 0.72 -6.67 -2.89 5.38 5.66 5.36 5.08 4.91 0.006 0.474 0.000 0.004 0.000 0.000 0.000 0.000 0.000 8669185 -.1394785 -5.424969 -.3163841 62.18236 74.50196 72.77962 76.03077 65.49704 5.159503 3001624 -2.960954 -.0607962 133.5281 153.3533 156.7431 171.6786 152.6316 _cons 3.013211 080342 -4.192961 -.1885901 97.85523 113.9276 114.7613 123.8547 109.0643 opengdp cpiunit lngdpusd hc govgdp dli dlmi dumi dhio dhino _cons 13.81335 -2.194812 -.1303527 2.772454 55.17744 53.2372 94.88242 -8.781279 28.33626 3.309795 2.239632 3143452 2992204 61.42185 68.41274 71.45393 80.22844 72.7963 (omitted) 4.17 -0.98 -0.41 9.27 0.90 0.78 1.33 -0.11 0.39 0.000 0.327 0.678 0.000 0.369 0.436 0.184 0.913 0.697 7.326276 -6.58441 -.7464579 2.185993 -65.20717 -80.8493 -45.16471 -166.0261 -114.3419 20.30043 2.194786 4857525 3.358916 175.562 187.3237 234.9295 148.4636 171.0144 govgdp cpiunit hc lngdpusd urbanpop dli dlmi dumi dhio dhino hc cpiunit lngdpusd edugdp lnpop urbanpop dli dlmi dumi dhio dhino _cons -3.50982 13.95158 1.551186 -17.7138 -.1379824 34.80135 45.61234 38.92841 51.56339 34.59282 Endogenous variables: Exogenous variables: dhino edugdp 1.321533 2.020281 647293 2.078573 0886948 18.30126 19.63624 21.32442 23.37033 21.59988 (omitted) -2.66 6.91 2.40 -8.52 -1.56 1.90 2.32 1.83 2.21 1.60 0.008 0.000 0.017 0.000 0.120 0.057 0.020 0.068 0.027 0.109 -6.099978 9.991906 2825151 -21.78773 -.311821 -1.068452 7.126013 -2.866683 5.75838 -7.742162 -.9196627 17.91126 2.819857 -13.63987 0358562 70.67116 84.09867 80.7235 97.36841 76.92781 gdpgrowth piunit igrowth govgdp opengdp hc cpiunit lngdpusd lnpop urbanpop dli dlmi dumi dhio *Reg3 command with Capital stock series (K) calculated following method proposed by Rodney Smith (2010) – proxy for capital reg3(gdpgrowth cpiunit piunit k govgdp opengdp hc)( piunit cpiunit govgdp lngdpusd lnpop urbanpop dli dlmi dumi dhio dhino)( k cpiunit hc lngdpusd opengdp dli dlmi dumi dhio dhino)( govgdp cpiunit hc lngdpusd urbanpop dli dlmi dumi dhio dhino)( opengdp cpiunit lngdpusd hc govgdp dli dlmi dumi dhio dhino)( hc cpiunit lngdpusd edugdp lnpop urbanpop dli dlmi dumi dhio dhino) Three-stage least-squares regression Equation Obs Parms RMSE "R-sq" chi2 P gdpgrowth piunit k govgdp opengdp hc 163 163 163 163 163 163 8 6.793868 5307033 7.53e+12 11.29342 48.94792 10.14695 -0.9598 0.6592 -0.1752 0.3207 -0.2401 0.6399 15.53 423.78 73.67 383.47 382.98 0.0083 0.0000 0.0000 0.0000 0.0000 Coef Std Err z P>|z| [95% Conf Interval] gdpgrowth cpiunit piunit k govgdp opengdp hc _cons -2.291075 2.143574 -8.18e-13 1160065 0139704 -.0231121 14.96907 1.051429 2.106806 3.64e-13 0952292 0144517 0445894 7.961554 -2.18 1.02 -2.25 1.22 0.97 -0.52 1.88 0.029 0.309 0.025 0.223 0.334 0.604 0.060 -4.351839 -1.985691 -1.53e-12 -.0706393 -.0143544 -.1105057 -.6352904 -.2303119 6.272839 -1.05e-13 3026524 0422952 0642815 30.57343 piunit cpiunit govgdp lngdpusd lnpop urbanpop dli dlmi dumi dhio dhino _cons 3528733 0162985 -.0194493 -.0638124 -.0071141 -1.66031 -.7669472 -.4353058 1124231 4863594 0523065 0050658 0778651 0848336 003856 3774399 2987061 2483506 2563291 (omitted) 9348662 6.75 3.22 -0.25 -0.75 -1.84 -4.40 -2.57 -1.75 0.44 0.000 0.001 0.803 0.452 0.065 0.000 0.010 0.080 0.661 2503544 0063698 -.172062 -.2300831 -.0146718 -2.400079 -1.3524 -.9220641 -.3899727 4553923 0262272 1331635 1024583 0004436 -.9205418 -.181494 0514524 6148189 0.52 0.603 -1.345945 2.318664 0 0 0 0 0 (omitted) (omitted) (omitted) (omitted) (omitted) (omitted) (omitted) (omitted) (omitted) (omitted) 1.136993 1201664 6327436 0615617 8.806624 6.339598 5.635531 5.717651 (omitted) 22.61606 2.57 -1.01 -7.62 -1.90 -1.86 0.59 0.78 3.34 0.010 0.315 0.000 0.057 0.063 0.554 0.435 0.001 6918938 -.3563318 -6.060169 -.2376625 -33.62546 -8.669642 -6.64723 7.908368 5.148825 1147118 -3.579859 003655 8958745 16.18113 15.44364 30.32115 _cons 2.92036 -.12081 -4.820014 -.1170038 -16.36479 3.755742 4.398207 19.11476 138.2962 6.11 0.000 93.96953 182.6229 opengdp cpiunit lngdpusd hc govgdp dli dlmi dumi dhio dhino _cons 10.53922 -.2746877 -.1141282 3.440073 7.936822 18.29189 58.7074 -46.81049 -7.118219 3.149465 2.063139 318493 2524114 23.81489 17.03485 15.29559 15.8938 (omitted) 69.81846 3.35 -0.13 -0.36 13.63 0.33 1.07 3.84 -2.95 0.001 0.894 0.720 0.000 0.739 0.283 0.000 0.003 4.366382 -4.318365 -.7383629 2.945356 -38.7395 -15.09581 28.7286 -77.96176 16.71206 3.76899 5101066 3.93479 54.61314 51.67958 88.68621 -15.65922 -0.10 0.919 -143.9599 129.7234 k cpiunit hc lngdpusd opengdp dli dlmi dumi dhio dhino _cons govgdp cpiunit hc lngdpusd urbanpop dli dlmi dumi dhio dhino hc cpiunit -1.735516 1.007481 -1.72 0.085 -3.710142 lngdpusd 12.03271 1.482803 8.11 0.000 9.126465 2391098 14.93895 edugdp -1.407223 5206183 -2.70 0.007 -2.427616 -.3868293 lnpop -16.09899 1.539084 -10.46 0.000 -19.11554 -13.08244 urbanpop -.2030719 0657741 -3.09 0.002 -.3319867 -.074157 dli -.0072011 6.949825 -0.00 0.999 -13.62861 13.6142 dlmi 13.50716 5.589678 2.42 0.016 2.551591 24.46272 dumi 6.983277 4.754113 1.47 0.142 -2.334613 16.30117 dhio 21.00772 4.669553 4.50 0.000 11.85556 30.15987 dhino (omitted) _cons 62.17129 15.93179 3.90 0.000 30.94555 93.39703 Endogenous variables: gdpgrowth piunit k govgdp opengdp hc Exogenous variables: cpiunit lngdpusd lnpop urbanpop dli dlmi dumi dhio dhino edugdp reg3( gdpgrowth cpiunit piunit igrowth govgdp opengdp hc)( igrowth cpiunit hc opengdp lngdpusd)( hc cpiunit lngdpusd)( piunit cpiu > nit govgdp lngdpusd)( govgdp cpiunit hc lngdpusd)( opengdp cpiunit hc govgdp lngdpusd) Equation is not identified does not meet order conditions Equation gdpgrowth: gdpgrowth cpiunit piunit igrowth govgdp opengdp hc Exogenous variables: cpiunit lngdpusd r(481); *Reg3 command with CPI in square format reg3(gdpgrowth sqcpi piunit igrowth govgdp opengdp hc)( piunit sqcpi govgdp lngdpusd lnpop urbanpop dli dlmi dumi dhio dhino)( igr > owth sqcpi hc lngdpusd opengdp dli dlmi dumi dhio dhino)( govgdp sqcpi hc lngdpusd urbanpop dli dlmi dumi dhio dhino)( opengdp sqc > pi lngdpusd hc govgdp dli dlmi dumi dhio dhino)( hc sqcpi lngdpusd edugdp lnpop urbanpop dli dlmi dumi dhio dhino) Three-stage least-squares regression Equation Obs Parms gdpgrowth piunit igrowth govgdp opengdp hc 213 213 213 213 213 213 10 9 9 RMSE "R-sq" chi2 P 4.539146 -0.0377 7171053 0.4196 15.34428 0.1196 12.46649 0.0063 38.45849 0.1248 13.9284 0.5866 25.15 362.13 77.87 343.91 1287.23 382.05 0.0003 0.0000 0.0000 0.0000 0.0000 0.0000 Coef Std Err z P>|z| [95% Conf Interval] gdpgrowth sqcpi piunit -.0362319 0344232 -1.05 0.293 -.1037002 0312363 -.1178872 9214 -0.13 0.898 -1.923798 1.688024 igrowth govgdp 2436632 -.1114456 0820773 0518022 2.97 -2.15 0.003 0.031 0827946 -.212976 4045317 -.0099152 opengdp hc 0061845 0150394 0.41 0.681 -.0232922 0356612 0343141 0320252 1.07 0.284 -.0284541 0970822 _cons 2.290303 2.813812 0.81 0.416 -3.224668 7.805273 sqcpi govgdp 0210677 0072288 2.91 0.004 0068995 035236 0026539 0071229 0.37 0.709 -.0113067 0166144 2223405 piunit lngdpusd lnpop 028902 0986949 0.29 0.770 -.1645365 -.1371901 1093507 -1.25 0.210 -.3515135 0771333 urbanpop dli -.0125082 3591928 0049913 9673367 -2.51 0.37 0.012 0.710 -.022291 -1.536752 -.0027254 2.255138 dlmi dumi 9298866 1.076071 0.86 0.388 -1.179174 3.038947 1.482116 1.147118 1.29 0.196 -.7661933 3.730426 dhio dhino 1.825168 1.24906 1.46 0.144 -.6229446 4.273281 2.586785 1.167926 2.21 0.027 2976919 4.875879 _cons (omitted) sqcpi 1615508 2018683 0.80 0.424 -.2341037 5572053 hc lngdpusd -.173493 1585172 -1.09 0.274 -.484181 137195 -2.269752 0804484 1.161091 0886733 -1.95 0.91 0.051 0.364 -4.545448 -.093348 005945 2542448 igrowth opengdp dli 61.09225 31.81856 1.92 0.055 -1.27097 123.4555 dlmi dumi 71.88759 34.12979 2.11 0.035 4.994428 138.7808 67.7751 37.32329 1.82 0.069 -5.377197 140.9274 dhio dhino 70.0511 34.76761 2.01 0.044 1.907839 138.1944 34.38101 (omitted) 1.67 0.095 -10.05929 124.7118 _cons 57.32626 sqcpi 2229148 1225449 1.82 0.069 -.0172688 4630984 hc lngdpusd 413168 1430322 2.89 0.004 1328301 6935059 -2.681226 -.2617451 6079888 0827808 -4.41 -3.16 0.000 0.002 -3.872862 -.4239926 -1.489589 -.0994977 govgdp urbanpop dli 55.16064 17.31701 3.19 0.001 21.21992 89.10135 dlmi dumi 61.72489 20.02316 3.08 0.002 22.48022 100.9696 61.77293 21.47295 2.88 0.004 19.68672 103.8591 dhio dhino 64.91247 60.86328 23.71441 21.61668 2.74 2.82 0.006 0.005 18.43309 18.49537 111.3919 103.2312 _cons (omitted) opengdp sqcpi 9389266 3459667 2.71 0.007 2608443 1.617009 lngdpusd hc -3.212123 0959796 1.908151 3473433 -1.68 0.28 0.092 0.782 -6.952031 -.5848007 5277843 77676 govgdp dli 2.388698 3234937 7.38 0.000 1.754662 3.022734 117.7774 51.40269 2.29 0.022 17.02993 218.5248 dlmi dumi 100.5592 59.18146 1.70 0.089 -15.4343 216.5528 138.0724 52.2139 62.88264 69.01432 2.20 0.76 0.028 0.449 14.82469 -83.05168 261.3201 187.4795 1.44 0.151 -33.10244 214.3863 -1.55 5.16 0.122 0.000 -.4723768 5.965774 0557037 13.26389 dhio dhino 90.64192 63.13604 _cons (omitted) sqcpi lngdpusd -.2083366 9.614833 1347169 1.861799 edugdp lnpop 3.641052 5386872 6.76 0.000 2.585245 4.69686 -11.50255 1.984609 -5.80 0.000 -15.39232 -7.612789 urbanpop dli 1379663 0880008 1.57 0.117 -.0345121 3104447 -1.116159 8.476607 -0.13 0.895 -17.73 15.49768 dlmi dumi 10.75759 4.841872 6.733199 5.503794 1.60 0.88 0.110 0.379 -2.439241 -5.945366 23.95441 15.62911 dhio dhino 10.86474 5.806897 1.87 0.061 -.5165692 22.24605 (omitted) _cons 5.176104 19.7149 0.26 0.793 -33.4644 43.81661 hc Endogenous variables: Exogenous variables: edugdp gdpgrowth piunit igrowth govgdp opengdp hc sqcpi lngdpusd lnpop urbanpop dli dlmi dumi dhio dhino ... to economic growth and corruption 2.2 Effect of corruption on economic growth: theoretical literatures 2.3 Effect of corruption on economic growth: empirical studies .11 2.3.1 The. .. macroeconomic conditions, corruption perceptions, education, and population growth This study focuses on summarizing these studies and examining the total impact of corruption on economic growth. .. caculated in nominal denomination, which includes inflation, or in real denomination, which is adjusted inflation Theories of economic growth Despite the absence of a dominant theory, almost all economic