PANAL DATA ANALYSIS OF THE EFFECTS OF INSTITUTIONAL STRUCTURE ON ECONOMIC GROWTH IN CONTEXT OF AGHION-HOWITT MODEL

Institutional structure affects the performance of the economy through securing property rights, catalyzing trade within and among countries, creating the suitable environment to innovate and establishing political stability. there is no consensus on the scope of this effect among economists. the contribution of this study is to provide an empirical explanation on the effect of institutions on growth in the context of aghion-howitt model. the main conclusion of this study is that institutional structure increases the growth rate; however the change depends on the technology level of the country.