National economic performance and its determinants: an empirical analysis

Abstract

This paper tests critical determinants of national economic performance over time and across different countries. The effects of countries' infrastructure, human capital, innovative ability and cost of capital on economic performance were studied. Countries were grouped into developed, developing and least developed economies. Results showed infrastructure positively related to national economic performance. Human skill was also positively related to economic performance but its effect was confined to least developed countries in recent years. Finally, innovative ability was positively related to economic performance of developed countries. The study showed that the importance of innovative ability as a determinant of national economic performance has increased over time. Implications are drawn for the different economies based on the findings.