The Effect of External Conflicts on the Economic Growth: Evidence from Emerging and Developed Countries

Elham Jafarzadeh^1, and He Shuquan²

¹International Trade, Shanghai University, Shanghai, China

²School of Economics, Shanghai University, Shanghai, China

Cite this paper:
Elham Jafarzadeh and He Shuquan. The Effect of External Conflicts on the Economic Growth: Evidence from Emerging and Developed Countries. Journal of Finance and Economics. 2022; 10(1):13-19. doi: 10.12691/jfe-10-1-3

Abstract

The current study examined the effect of the external conflicts on the economic growth of countries in both developed and emerging markets. The current study has used data collected from world bank for the period of 1996 to 2016 with a total 128 countries used for the estimation. The results of the regression using the Hausman test showed that external conflicts adversely affected the economic growth of a country. Moreover, GDP growth, employment, inflation rate, gross capital formation economic freedom, trade freedom and business freedom and foreign reserves are found to have a significant and positive influence on the economic growth of a country. Therefore, the improvement of international trade and economic prosperity the countries are required to be devised such strategies that could constrained the external conflicts and bring economic growth in a country.

Keywords:
effect external conflicts economic growth

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