Investigating the Effects of Privatization on the Economic Growth in Developing Countries: A Fixed Effects Approach

Abstract

Considering that the economic adjustment policies have been proposed by international institutions for achieving a sustainable economic growth in the developing countries, the latter adopted privatization trend in economy following the application of economic adjustment policies. In this study, we investigated the effects of privatization on the economic growth of developing countries in 2000-2008. We selected a suitable model based on the past experimental studies, use of qualitative and institutional variables in economy as well as use of controlling variables for different regions. Results of estimation in different areas show that privatization in the MENA region, Latin America and Caribbean region, and sub-Saharan Africa had not significant effects on economic growth (Similar results of previous research) but for west Asia and Pacific areas, Central Asia and Western Europe, and South Asia had significant positive effects on economic growth.

Keywords: Privatization, Economic Growth, Developing Countries, Fixed effects