Open AccessCompetitiveness and government spending in Cambodia: An autoregressive distributed lag approach
Author(s) -
Leanghak Hok
Publication year - 2020
Publication title -
theory, methodology, practice
Language(s) - English
Resource type - Journals
eISSN - 2415-9883
pISSN - 1589-3413
DOI - 10.18096/tmp.2020.02.03
Subject(s) - distributed lag , government spending , economics , globalization , investment (military) , consumption (sociology) , government (linguistics) , government revenue , fiscal policy , autoregressive model , macroeconomics , terms of trade , international economics , public finance , econometrics , market economy , politics , social science , linguistics , philosophy , sociology , political science , welfare , law
In the globalization age, global competitiveness is gaining attention from policymakers and scholars. This paper focuses on a measurement of trade competitiveness based upon the expansion of market size. Fiscal policy has become a subject of debate since the global crisis of 2008. This paper attempts to examine the influence of government spending (i.e., government investment and consumption) on trade competitiveness. The Autoregressive Distributed Lags (ARDL) approach is used to estimate the dynamic relationship. The result, based on Cambodia's annual data from 1970 to 2015, shows that Cambodia’s trade competitiveness increases when there is a rise in public investment, government purchases, or aggregate private spending. This study shapes an alternative perception of the effectiveness of fiscal policy as domestic expenditure in enhancing international macroeconomic activities.