Asymmetric Effects of Government Size, Resource Governance, and Institutional Quality on Per Capita Economic Growth in Iran
Keywords:
Government size, natural resource governance, institutional quality, good governance, per capita economic growth, economic developmentAbstract
The present study examines the asymmetric effects of government size, resource governance, and institutional quality on per capita economic growth in Iran. The results indicate that positive and negative fluctuations in each of these variables exert distinct and inverse effects on economic growth. These findings highlight the importance of considering the asymmetric dimensions of institutional and economic factors in the analysis of economic growth. The findings of the study show that the effects of positive and negative fluctuations in government size, resource governance, and institutional quality on per capita economic growth in Iran are asymmetric. Negative fluctuations in government size have a positive effect, whereas positive fluctuations have a negative effect on economic growth, indicating an inverse relationship between government size and growth. Institutional quality also exhibits a direct and asymmetric effect on economic growth, such that positive fluctuations have a positive impact, while negative fluctuations exert a negative impact. Similarly, positive fluctuations in resource governance have a positive effect, whereas negative fluctuations have a negative effect on per capita economic growth. The variables of financial development, physical investment, population, and foreign direct investment have positive and statistically significant effects on per capita economic growth. In contrast, the inflation rate and total external debt have negative effects on economic growth, with the effect of inflation being statistically significant at the 90% confidence level. The Phillips–Perron test indicates non-stationarity in some variables, leading to the selection of the nonlinear autoregressive distributed lag (NARDL) model for asymmetric estimation. The Johansen and Engle–Granger cointegration tests confirm the existence of long-run relationships among the variables. The error correction term (ECM) is negative and statistically significant, indicating convergence from short-run disequilibrium to long-run equilibrium with an appropriate speed of adjustment. The Wald test confirms the asymmetric effects of the main variables. Overall, the study emphasizes that examining the asymmetric effects of economic and institutional variables provides a more precise understanding of per capita economic growth in Iran.
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Copyright (c) 2025 Marjan Gholamzadeh (Author); Alireza Daghighi (Corresponding author); Majid Afsharirad, Roya Seifipour (Author)
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