Determinants of Economic Growth for EU-27 Countries and Turkey: An Implementation with Static Panel Model

Abstract

The aim of this study is to figure out the determinants that explain the economic growth for EU27 countries and Turkey for the years 2000-2011. The database consists of GDP, population, total local credits to GDP, private sector credits to GDP, foreign trade to GDP, consumer inflation and total savings to GNI. Initially, unit root tests such as LLC and Hadri are implemented. Then, Breusch-Pagan LM, Breusch-Pagan/Cook- Weisberg LM and White tests are run for heterogeneity and Wooldridge (2000) test for autocorrelation. Static panel regression have been used to analysis. As a result of the analysis, economic growth has been explained by human capital, credits providing by banking sector, inflation, financial development and savings.