Determinants of Economic Growth in Low-Income Countries

Abstract

ABSTRACT

Economic growth is the process of increasing production capacity in a country. Low production capacity will cause per capita income and Gross National Income (GNI) in the country is also low. The study aims to determine the effect of trade openness, corruption perception index, foreign investment, human development index, and foreign debt on economic growth in low-income countries during the period 2016-2020 using the regression of panel data. The results the Fixed Effects approach showed that trade openness has a positive effect on economic growth, while foreign debt has a negative effect on economic growth. Meanwhile, the perception index of corruption, foreign investment, and human development index was found to have no effect on economic growth in low-income countries in 2016-2020.

KEYWORDS: corruption perception index; economic growth; foreign investment; human development index; trade openness