Determinants of Economic Growth in Asian Countries: A Panel Data Perspective

Abstract

Panel data analysis refers to two or multi-dimensional data set
containing observations on multiple phenomena observed over multiple
time periods (Baltagi, 2005; Gujarati, 2003 among many others). Real
gross domestic product (CGDP) per capita is the most commonly used
measure of a country’s economic welfare. It is the number reached by
valuing all the productive activity within the country at a specific
year’s prices. Determinants of economics growth are evaluated,
gathered for nine Asian countries for forty years that leads to use the
panel data analysis, whereas panel data may have group effects, time
effects or both. Data is taken from Penn Word Table (an expanded set
of international comparisons), Version 6.1 (2003) for different Asian
countries contributing in the world economy. In this article, the
comparison of ordinary least square, fixed and random effects for
panel data analysis is carried out. Different specification tests, e.g.
Breusch Pagan Lagrange Multiplier test, F-test, and Hausman
specification test, etc., are used to make selection among ordinary least
square, fixed effect model or random effect model. Random effect
model seems best to handle such situation.