@article{article_1759987, title={The Path Illuminated by Spatial Effects: The Role of Institutional Development on Economic Growth}, journal={Ankara Hacı Bayram Veli Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi}, volume={28}, pages={401–422}, year={2026}, DOI={10.26745/ahbvuibfd.1759987}, url={https://izlik.org/JA32XP84EN}, author={Tosunoğlu, Mahir and Akpınar, Alper}, keywords={Avrupa Birliği, Kurumsal gelişim, Mekânsal panel veri analizi, SLM, SEM}, abstract={This study investigates the relationship between institutional development and economic growth, considering spatial effects. Institutional economics emphasizes institutions’ pivotal role in economic growth, crucial for sustainable development. Analyzing growth models across 26 EU countries from 2011-2021, spatial panel data methods are used to explore spatial effects on institutional development. LM test results confirm spatial effects’ presence, with the spatial lagged fixed effects model proving most significant based on LR test statistics. Analysis reveals a positive relationship between spatial effects and economic growth. Labor and capital variables show statistical significance, with elasticities of 0.36 and 0.57 respectively, totaling approximately 0.93 combined. Accountability, the rule of law, and control of corruption are significant for institutional development. As anticipated, the rule of law and control of corruption positively influence economic growth, while accountability negatively impacts it. In conclusion, effective institutions are vital for economic growth and well-being. Policymakers should prioritize institutional reforms to establish a robust framework for sustainable development and economic growth.}, number={1}