Tag: O47

IS THERE A CAUSALITY RELATIONSHIP BETWEEN LAW ENFORCEMENT, CRIME RATES, AND ECONOMIC GROWTH? AN EMPIRICAL EVIDENCE FROM WESTERN INDONESIA

Syarifuddin HASYIM

Senior Lecturer, Faculty of Law, Universitas Syiah Kuala, Banda Aceh, Indonesia

syarifuddin_hasyim@unsyiah.ac.id

Muhammad ZULHILMI

Senior Lecturer, Faculty of Islamic Economics and Business, Universitas Islam Negeri Ar-raniry, Banda Aceh, Indonesia

muha.zul@gmail.com

Khairul AMRI

Lecturer, Faculty of Islamic Economics and Business, Universitas Islam Negeri Ar-raniry,

Banda Aceh, Indonesia

khairul.amri@ar-raniry.ac.id

(corresponding author)

Abstract

The economic impact of law enforcement and crime rates empirically has not been widely revealed by researchers. In fact, in general, economic activities can be related to security factors. This study analyzes the influence of law enforcement and crime on economic growth. Using a panel data set of 8 provinces from western Indonesia during the period 2006-2017, the study found that there were no long-run relationships between the three variables. In the short-run, law enforcement and crime rates have a positive and significant effect on economic growth. Law enforcement has a significant and negative effect on crime rates, and vice versa crime rates have a positive and significant effect on law enforcement. The results of the Granger causality test indicate the existence of bidirectional causality between crime rates and law enforcement and between law enforcement and economic growth. Furthermore, unidirectional causality exists running from crime to economic growth.

Keywords: Economic Growth, Law Enforcement, Crime Rates, Panel Vector Autoregressive, and Granger Causality Test.

JEL classification: K14, K42, O47
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SPATIAL ANALYSIS OF THE IMPACT OF MIGRATION ON REGIONAL GROWTH IN IRAN (2006-16)

Shekoofeh FARAHMAND

Associate Professor, Economics Department, University of Isfahan, Iran

sh.farahmand@ase.ui.ac.ir

Narges GHASEMIAN

Ph.D candidate of economics, Alzahra University of Tehran, Iran

N.Ghasemian@alzahra.ac.ir

Abstract

One of the most important applications of economic growth models is for regional economic growth. In regional growth studies, it is necessary to consider spatial effects because of spatial dependence among the growth rates of regions. This research investigates the impact between net migration and its spatial lag on regional growth, based on the neoclassical (Solow) growth model. The used model in the study is the Dynamic Panel Data (DPD) which has been specified as a Spatial Durbin Model (SDM) and estimated by the spatial generalized method of moments (SGMM). The specified model has been tested for the 30 provinces of Iran in the period of 2006-16. The estimated results show that the time-lagged dependent variable had a positive and highly significant effect on income per capita. The impact of initial income per capita on growth is negative, and the convergence hypothesis is thus accepted. That is, poor provinces grow faster than the rich. The income per capita and growth are positively related to net migration rate. Expectedly, the new coming people to a province would increase income per capita and growth. The estimated coefficient of the spatial lag of the dependent variable is statistically significant and demonstrates spatial dependence in income as well as economic growth among the provinces of Iran. Every province’s growth rate was positively impacted by the economic growth of its neighbors. However, net migration has no spatial effect on income per capita and growth. In other words, the regional economic growth has not been influenced by migration to neighboring provinces.

Keywords: Neoclassical growth model, convergence, migration, spatial Durbin model, spatial generalized method of moments.

JEL classification: O47, C23, R23
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