The role of institutions in mitigating the risk of push and pull factors on economic growth

• Main Author: Murdipi, Rafiqa
• Format: Conference or Workshop Item
• Language: English; English
• Published: 2018
• Subjects: HG4501 Stocks, investment, speculation
• Online Access: http://irep.iium.edu.my/92050/1/vietnam%20conference.pdf; http://irep.iium.edu.my/92050/13/92050_The%20role%20of%20institutions%20in%20mitigating.pdf; http://irep.iium.edu.my/92050/

It is widely acknowledge that both push (global) and pull (domestic) factors can be important in driving foreign capital flows. While both the risk from push and pull factors are able to direct or indirectly cripple economic growth, it is essential for the countries to deal and adequately manage both the push and pull factors. The main objective in this study is to analyze the role of institutional quality both political and social institutions in mitigating the potential adverse effects of push and pull factors on growth. We provide new evidence the relationship between political and social institutions, push or pull factors, and economic growth. Generally, our finding indicate that institutions quality play an important role in mitigating several components of both push and pull push factors. Good political institutional, high democracy and stable political institutions positively and significantly offsetting the negative effect of push factors global uncertainty shocks and changes of global growth rate on growth, while weak social problems assist country in alleviating potential severe of destructive global interest rate on country. The results robust using several proxies of political institutions. For pull factor, political stability assist country in reducing negative effect of inflation uncertainty, while social cohesion reduce the detriment of high debt. We confirm that improvement institutional quality both political and social institutions especially political institutions be an imperative strategy in ensuring the effectiveness of policies on mitigating the changes of changes of global factors risk shocks. The policymakers should take advantages from the findings of this research in search for strategy stability on financial and macroeconomic to boost economic growth.