The impact of governance on economic growth in Muslim country and non-Muslim country / Umi Humairah Mohd Hasnol

Governance plays an important role to restore investor confidence in the capital market. Generally, governance is an indefinite term used in international development literature to explain on how the public institutions carry out public affairs and manage public resources. Governance also describe as the process of decision making and the process in which decisions are implemented or not implemented. Economic growth is referred to an increase in aggregate productivity. By expanding the economy, businesses start to see a surge in profits, which mean stock prices also see growth. This research analyses economic growth as the dependent variable. Meanwhile, independent variables are control of corruption, voice and accountability, government effectiveness and rules of law. This research use 10 countries which is divided into five from Muslim consist of Afghanistan, Bahrain, Egypt, Jordan, Pakistan and five from non-Muslim country include India, Maldives, Nepal, Sri Lanka and China. All data of independent variables are taken from Worldwide Governance Indicator that provided by World Bank and cover a period of 10 years from 2007 until 2016. The research methodologies that has been used are panel data methodology, descriptive statistics, correlation analysis and regression analysis by using least squares method. It finds that all the independent variables of governance have relationship with economic growth.