The impact of economic freedom on economic growth in countries with high and low regulatory quality—lessons for Viet Nam

Abstract

Abstract This article aims to analyze the impact of economic freedom on economic growth, considering the influence of varying regulatory qualities (RQ) among nations. Analyzing data from 54 countries from 2008 to 2022, Bayesian linear regression results on two sample groups, categorized based on RQ, reveal that economic freedom positively affects economic growth regardless of high or low RQs. Additionally, separate regression analyses for Vietnam indicate no significant difference from other countries. However, control variables uncover differences between the two groups, particularly in corruption control and financial development, with their effects varying across nations. Notably, in Vietnam, government expenditure on education, inflation, fixed capital formation, and population growth rate exhibit regression outcomes contrary to those of other countries in the two groups. The suggested policy implications align with the regression results, aiming to strengthen economic freedom. They support policymakers in achieving this.