Author(s): Thi Hoa Nguyen
Government revenue plays an important role in the process of economic growth and development in a country. Changes in government policies and regulations (institutional quality) may help increase government revenues, but it can be detrimental to economic growth. The main objective of this study is to empirically investigate the role of governance in the government revenue – economic growth relationship for a balanced panel of 17 emerging and developing Asian countries over the period 2002 – 2019 using the difference GMM Arellano-Bond estimators. The results show that government revenue decreases while governance increases economic growth but their interaction reduces it. Besides, trade openness and inflation are significant determinants of economic growth in these countries. These findings provide some crucial policy implications for governments in these countries in reforming and improving governance to appropriately manage and use government revenue for economic growth and development.