Unlocking Prosperity: Fresh Insights into Economic Growth Through Financial Development, Domestic Investment, and Corruption Trends in LAC Countries

Bakari, Sayef (2024): Unlocking Prosperity: Fresh Insights into Economic Growth Through Financial Development, Domestic Investment, and Corruption Trends in LAC Countries.

Abstract

The aim of this study is to assess the influence of financial development, domestic investments, and corruption on economic growth, through the analysis of data from 42 Latin American and Caribbean countries spanning the period from 1998 to 2022. Utilizing estimation techniques such as the static fixed-effects gravity model, the random-effects gravity model, and the Hausman test, our findings indicate that domestic investments and financial development exert a positive influence on economic growth. However, it has been observed that corruption control has no significant impact on economic growth. It is recommended to prioritize policies aimed at stimulating domestic investments and financial development to foster economic growth, while implementing specific strategies to strengthen corruption control mechanisms and promote an integrity-focused business environment, despite its relatively limited impact on economic growth.

• Item Type: MPRA Paper
• Language: English
• Keywords: Financial Development, Domestic Investment, Corruption, Economic Growth, LAC Countries.
• Subjects: G - Financial Economics > G3 - Corporate Finance and Governance > G31 - Capital Budgeting ; Fixed Investment and Inventory Studies ; Capacity; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O43 - Institutions and Growth; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Empirical Studies of Economic Growth ; Aggregate Productivity ; Cross-Country Output Convergence; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O54 - Latin America ; Caribbean; P - Economic Systems > P3 - Socialist Institutions and Their Transitions > P33 - International Trade, Finance, Investment, Relations, and Aid; P - Economic Systems > P3 - Socialist Institutions and Their Transitions > P37 - Legal Institutions ; Illegal Behavior

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