Moderating Effect of Political Stability on Gross Fixed Capital Formation and Economic Growth of East African Community Member States
DOI:
https://doi.org/10.58885/ijbe.v09i2.54.anKeywords:
Gross Fixed Capital Formation, Political Stability, Economic Growth, Pooled OLS and East African Community Member States.Abstract
Goal: This study sought to ascertain how political stability affected the member states of the East African Community's link between GFCF and EG.
Design and Techniques: Panel longitudinal, cross sectional, and correlational study designs were utilized throughout the 2000–2022 study period. In the study, pooled OLS estimation was used to panel data from six (6) EAC member states.
Results: The study discovered that the rate of gross fixed capital creation affected the rate of economic growth. Additionally, the study discovered that the link between gross fixed capital creation and the economic development of the EAC member nations was significantly moderated by political stability.
Originality/value: This study adds to our understanding of the optimal strategies for fostering regional economic growth while taking into account the states' political stability and capital assets.
Implication to Policy: The study implications are that management of political landscape in the region should be prioritized to achieve progressive economic growth alongside investments towards accumulation of capital assets.
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