Impact of Resource Rents and Institutional Quality on Economic Growth: An Approach of Panel Threshold Analysis

Abstract

This study has determined the asymmetric threshold impact of IQ on the link between resource rent and economic progress in seven Asian nations. For this purpose, this study took the data from 1996 to 2018. In accordance with the multiple effects of threshold IQ regression results, capital formation and exchange rate with institutional quality are ineffective for the economic growth of concerned Asian economies. However, the multiple effects of debt with institutional quality have enhanced the economic growth, while trade term has reduced the growth level of selected economies. Moreover, the findings of the threshold effect of resource rents are presented in which institutional quality regulates the resource rents. According to the outcomes, RERit-1 (INQit-1 ≤ -1.401) shows an inconsequential influence of resource rents on economic growth during the institutional quality regulations. However, RERit-1 (-1.401 < INQit-1 ≤ -1.310) and RERit-1 (INQit-1 > -1.310) have boosted the economic growth of Asian economies at medium-good level IQ.