Journal of Management Information and Decision Sciences (Print ISSN: 1524-7252; Online ISSN: 1532-5806)

Abstract

The Optimal Public Expenditure Decision A Case Of Economic Growth In Southeast Asian Countries

Author(s): My-Linh, Nguyen Thi, Nga, Phan Thi Hang, Tam Thanh Phan

Government public expenditure has always played an important role in economic growth. However, there are many different opinions about the optimal public expenditure impact on growth. The public expenditure suggests that government spending programs help to provide important public goods such as infrastructure and education. The study objective focuses on testing the impact of government expenditure on economic growth in 10 Southeast Asian countries (ASEAN). The second data collected from 2000 to 2016 and obtained from the World Bank (WB) and the International Monetary Fund (IMF). The study applied quantitative method with panel data regression, namely the Generalized Method of Moment (GMM) to avoid the autocorrelation among errors, heteroscedasticity and potential endogenous problems. Research results showed that government expenditure has a nonlinear impact on economic growth in the selected countries. Particularly, the optimal level of government expenditure based on economic growth in ASEAN countries is 21.05% GDP with significance level 0.05. Finally, the researchers have some recommendations for the governments of ASEAN countries in order to maintain a reasonable level of government expenditure on economic growth.

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