The Causal Relationships Between Corruption, Investments and Economic Growth in GCC Countries
This paper investigates the impact of corruption on economic growth and investments in the Gulf Cooperation Council countries over the period 2003 to 2016 using the panel vector error correction model and the panel fully modified ordinary least squares method developed by Pedroni. We find that there...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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SAGE Publishing
2021-10-01
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| Series: | SAGE Open |
| Online Access: | https://doi.org/10.1177/21582440211054425 |
| _version_ | 1818833554663014400 |
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| author | Mounir Belloumi Atef Saad Alshehry |
| author_facet | Mounir Belloumi Atef Saad Alshehry |
| author_sort | Mounir Belloumi |
| collection | DOAJ |
| description | This paper investigates the impact of corruption on economic growth and investments in the Gulf Cooperation Council countries over the period 2003 to 2016 using the panel vector error correction model and the panel fully modified ordinary least squares method developed by Pedroni. We find that there is at least one cointegration relationship between the variables. The results of Granger causality tests indicate that corruption does not cause economic growth, foreign and domestic investments in the short run. Moreover, we find that there is strong long run unidirectional causality running from corruption to economic growth, foreign direct investment, domestic investment, and domestic credit. Estimation of the panel fully modified ordinary least squares model indicates that corruption has a negative impact on economic growth whereas a positive influence on domestic investment. Hence, the policy implication resulting from this study is that the improvement of corruption perception index in Gulf Cooperation Council countries is not without a positive impact on economic growth in the long run for these countries even not for domestic investments. |
| first_indexed | 2024-12-19T02:20:46Z |
| format | Article |
| id | doaj.art-ba323bac82b64b62b8309d13a2be7db6 |
| institution | Directory Open Access Journal |
| issn | 2158-2440 |
| language | English |
| last_indexed | 2024-12-19T02:20:46Z |
| publishDate | 2021-10-01 |
| publisher | SAGE Publishing |
| record_format | Article |
| series | SAGE Open |
| spelling | doaj.art-ba323bac82b64b62b8309d13a2be7db62022-12-21T20:40:14ZengSAGE PublishingSAGE Open2158-24402021-10-011110.1177/21582440211054425The Causal Relationships Between Corruption, Investments and Economic Growth in GCC CountriesMounir Belloumi0Atef Saad Alshehry1Najran University, Saudi ArabiaNajran University, Saudi ArabiaThis paper investigates the impact of corruption on economic growth and investments in the Gulf Cooperation Council countries over the period 2003 to 2016 using the panel vector error correction model and the panel fully modified ordinary least squares method developed by Pedroni. We find that there is at least one cointegration relationship between the variables. The results of Granger causality tests indicate that corruption does not cause economic growth, foreign and domestic investments in the short run. Moreover, we find that there is strong long run unidirectional causality running from corruption to economic growth, foreign direct investment, domestic investment, and domestic credit. Estimation of the panel fully modified ordinary least squares model indicates that corruption has a negative impact on economic growth whereas a positive influence on domestic investment. Hence, the policy implication resulting from this study is that the improvement of corruption perception index in Gulf Cooperation Council countries is not without a positive impact on economic growth in the long run for these countries even not for domestic investments.https://doi.org/10.1177/21582440211054425 |
| spellingShingle | Mounir Belloumi Atef Saad Alshehry The Causal Relationships Between Corruption, Investments and Economic Growth in GCC Countries SAGE Open |
| title | The Causal Relationships Between Corruption, Investments and Economic Growth in GCC Countries |
| title_full | The Causal Relationships Between Corruption, Investments and Economic Growth in GCC Countries |
| title_fullStr | The Causal Relationships Between Corruption, Investments and Economic Growth in GCC Countries |
| title_full_unstemmed | The Causal Relationships Between Corruption, Investments and Economic Growth in GCC Countries |
| title_short | The Causal Relationships Between Corruption, Investments and Economic Growth in GCC Countries |
| title_sort | causal relationships between corruption investments and economic growth in gcc countries |
| url | https://doi.org/10.1177/21582440211054425 |
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