Abstract:

This study was conducted with the aim of identifying the factors affecting economic freedom on the selected 15 rising market economies. Panel data analysis method was used, taking into account the horizontal cutting dependency, using annual data between 2000 and 2017. As a dependent variable in the established model, the economic freedom variable is used, while the independent variables are defined as economic growth, inflation, domestic savings, government spending and trade freedom. Economic freedom, government spending and trade freedom data are obtained from the Fraser Institute database while economic growth, inflation and domestic savings variables are provided from the World Bank database. The stagnation of the series; the dependency of the horizontal cut and the common factors of the second generation unit root tests are studied by the Hadri-Kurozumi (2012) test while the presence of the matching relationship is analysed by the Durbin-H (Durbin-Hausman) test developed by Westerlund (2008). The results show that economic growth, government spending and trade freedom have statistically meaningful and positive effects on economic freedom. This positive relationship is consistent with much of the work in literature.

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