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ISSN (online): 1805-9112

Research ArticleOpen access

Regulatory Quality and Economic Performance: Evidence from European Countries

Yelyzaveta SHEBALKOVA1*iD, Jan VOHARČÍK2iD, Harinarayanan KAYATHINGAL2iD

  1. Pan-European University in Bratislava, Faculty of Economics and Business, Tomášikova 20, 821 02 Bratislava, Slovak Republic
  2. DTI University, Sládkovičova 533/20, 01841 Dubnica and Váhom, Slovak Republic

* Corresponding author.

Abstract

This study investigates the relationship between regulatory quality and economic growth across 11 European countries over the period 2010–2023 using a comprehensive panel data framework. Employing pooled OLS, fixed effects, two-way fixed effects, and System GMM estimators, the analysis examines the robustness, heterogeneity, and dynamic properties of the regulatory quality–growth nexus. The results indicate that regulatory quality does not have a statistically significant or robust effect on economic growth once country-specific and time-specific heterogeneity are controlled for. Additional analyses reveal no significant differences across Western, Central, and Eastern European countries, nor evidence of dynamic or non-linear effects. The findings suggest that in mature and highly regulated European economies, regulatory quality may act more as a background institutional condition rather than a direct driver of short-term growth, highlighting the importance of complementary macroeconomic factors.

Keywords:Regulatory QualityEconomic GrowthPanel Data AnalysisEuropean EconomiesInstitutional Economics
JEL:O43O47C23

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