Assessment of Economic Growth in South Asian Countries Using Maddison’s Dataset: A Panel Data Approach

Abstract

Purpose: Despite the plethora of research endeavors to identify the driving forces of economic growth this particular notion is still opaque. The major objective of this study is to identify these driving forces in the context of South Asian countries through a panel data approach using the data set constructed by economic historian Angus Maddison. Methodology: As a baseline empirical growth model, augmented Solow model is followed for selecting major variables in the econometric analyses which include both Random effects and fixed effects models. Findings: The regression analyses show that population growth and human capital index are statistically significant explanatory variables for economic growth. This study identifies investment in human capital as a major determinant along with expected direction of association with economic growth. Limitations: Major limitations of this study are the sample size and assumption of exogeneity of the independent variables. Practical Implications: This research provides further scope for more research to find out which exogenous variables cause the specific growth patterns of countries within South Asian Region as well as the robustness of the variables. Originality: South Asian region has been chosen for its specific growth dynamics that has not been covered by previous research endeavors.