THE RELATIONSHIP BETWEEN GEOGRAPHY AND ECONOMIC GROWTH IN MIDDLE-INCOME COUNTRIES: EVIDENCE FROM PANEL DATA ANALYSIS

Abstract

All countries aim to achieve stable economic growth. Geography is recognized as one of the main determinants of economic growth as it covers the advantages and disadvantages arising from the physical location of the country. For this reason, revealing the relationship between geography and economic growth can give an idea about the economic policies that can be implemented in terms of how to utilize the advantages or how to reduce the effects of disadvantages. In addition, analyses on the effects of geographical location, climate, natural resources and other geographical characteristics on economic growth help to understand the economy from a broad perspective. This study, using panel data analysis methods with data from 2001-2012, aims to empirically test the relationship between geography and economic growth among 79 countries classified at middle income level according to the World Bank income classification. In line with this objective, various empirical tests were carried out using panel data analysis method. The empirical analyses conducted within the scope of the study revealed that geographical factors are effective on economic growth. Therefore, the inclusion of geographical factors, which are generally ignored by neoclassical growth models, will provide an important perspective for economic growth studies.