Analytical study of the impact of economic freedom on economic growth in selected developed and developing countries

Document Type : Original Article

Authors

samira Motaghi ¹

nasrin Mansouri ²

Ali Reza Abroud ³

¹ Department of economics. allameh tabataba'i university. Tehran. Iran

² Department of Economics, Payame noor University. Tehran. Iran

³ Department of Management. payame noor university. Tehran. Iran.

https://doi.org/10.22067/erd.2025.91842.1276

Abstract

Creating the necessary conditions to promote continuous and stable economic growth is one of the macroeconomic goals of countries. conomic freedom is one of the factors affecting economic growth; through trade freedom, the removal of unnecessary government barriers, and property rights, it can provide incentives for investment, improve skills, and transfer technology, and pave the way for the development of productive activities. Therefore, the main objective of this study is to examine the impact of economic freedom on economic growth in selected developed countries (OECD) and developing countries (selected MENA) in the period 1998-2022 using the generalized moments method.
The results of the study indicate that there is an inverse and significant relationship between inflation and economic growth in the two groups of countries studied; while the relationship between economic freedom, foreign direct investment, degree of trade openness, growth in the previous period, and government spending on economic growth in the two groups of countries studied was direct and significant. Since economic freedom has the greatest impact on growth, it can be acknowledged that improving economic freedom will provide incentives for all types of investments, accumulation of skills, as well as technology transfer and efficient use of investments, and will increase strength and competitiveness, and as a result, will lead to the realization of stable economic growth.

Keywords

Economic Freedom

Business Openness

Foreign Direct Investment

Economic Growth

Subjects

• Growth and development economics

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