Relationship Between the Subsidies and Economic Growth of the Developing Countries - Research Proposal Example

The paper "Relationship Between the Subsidies and Economic Growth of the Developing Countries" is a wonderful example of a research proposal on macro and microeconomics.The government of different countries often allocate subsidies for different sectors in order to induce more growth and development in that particular industry or sector. This is normally done on the part of the government for the industries and sectors which are declining or which need help. For instance, many developing countries whose economies are based on the agriculture sector are providing subsidies to this sector in order to enhance and improve this particular sector and in turn the whole economy.

At the same time, several developing countries have been providing energy and fuel subsidies in order to reduce the overall prices of energy and fuel. Same goes for education sector subsidies. However, the World Bank and IMF are of the view that the developing countries should remove these subsidies and promote perfect competition in order to attract more foreign and international companies (Amegashie, 7-15). This research study will try to explore and investigate the different views and perceptions regarding the subsidies provided by the governments of the developing countries and will establish cause and effect relationship between the subsidies and economic growth of the developing countries.

Research Aim and Objectives: The aim of the research study is to investigate and explore the impact of the subsidies provided by the government on the economic development of developing countries. The associated research objectives which will be accomplished by the researcher during the research study are as follow: To investigate the relationship between subsidies and economic development in developing countries. To explore the importance of subsidies. To investigate the impact of the subsidies on other government spending and the overall federal budget.

To explore the impact of the subsidies on international companies exporting to these developing countries. Research Questions: The research questions which will be explored and investigated by the researcher during this research study are as follow: Do subsidies result in increasing the overall economic development and growth in developing countries? What is the importance of subsidies for developing countries? How subsidies impact government spending and federal budget? How subsidies influence the operations of international companies in these developing countries?

Importance of Research Study: The research study will try to explore and investigate the different views related to the subsidies provided by the governments of the developing countries. The research will be of high importance for the economic analysts and policymakers who want to analyze and explore the short-run and long-run impact of the subsidies on the economic growth and development of the developing countries. Literature Review: Several research studies have been conducted in order to explore and investigate the overall impact of the subsidies on the economic growth and development.

Peacock (323-335) presented the role of subsidies in the overall welfare of the economy. Similarly, Amegashie (7-15) have discussed and explored the economics of subsidies along with the perspective of the World Bank and IMF about the subsidies in the developing countries and perfect competition. On the other hand, Munro and Ussif (233-250) in their research study highlighted the negative impact of the subsidies on fisheries management and sustainability. García‐Quevedo (87-102) in his research study tried to explore whether subsidies are beneficial for the companies or not.

Similarly, Bergstrom (183-193) explored the impact of the subsidies on the performance of the firms and showed that subsidies do influence growth but there is no impact on productivity. Research Methodology: The research study will be quantitative in nature and will be conducted with the help of the secondary data. The secondary data about the subsidies given by the developing countries along with the economic growth data will be available from a different website and databanks like that of World Bank and IMF.

The researcher will run regression analysis in order to generate a cause and effect relationship between subsidies and economic growth. Along with this in order to understand and explore the impact of the subsidies on government spending and international trades the data will be again gathered from the different websites and databanks. On the basis of this data, the researcher will run regression analysis to check the relationships. Apart from this extensive literature review will be done in order to get hold of previous research studies related to the research topic.