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Decomposition of the effect of government size on growth

Yamamura, Eiji (2010): Decomposition of the effect of government size on growth.

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Abstract

Empirical results through a fixed effects regression model show that government size has a negative effect on growth mainly through hampering capital accumulation. When a sample is divided into OECD and non-OECD countries, the negative effect of government size on capital accumulation persists for non-OECD countries but not for OECD countries.

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