The impact of government spending, climate change on economic growth in developing countries

Abstract

The study assesses the impact of government spending and climate change on economic growth in developing countries, using panel data regression (Fixed Effects Model - FEM) for 71 developing countries from 2010 to 2019. The results show that public spending positively impacts economic growth, while climate change does not. In addition, the results show that the countries with climate change assessed at a very low level have public spending positively affecting growth and vice versa for those with low levels. In contrast, the group of countries at other levels (high) does not find statistical significance. This implies that public spending seems to lose its positive impact on economic growth if developing countries face climate change.