Global Economic Slowdown and Economic Growth Stability in Developing Countries: Evidence from Two-Way Fixed Effects Panel Data Analysis, 2010–2024

Authors

  • Sabarno Dwirianto Management Department, Faculty of Economic and Social Science, State Islamic University of Sultan Syarif Kasim Riau, Riau, Indonesia
  • Roza Linda Management Department, Faculty of Economic and Social Science, State Islamic University of Sultan Syarif Kasim Riau, Riau, Indonesia
  • Abdulla Al Mamun School of Earth Sciences and Engineering Hohai University, Nanjing, China
  • Atika Ananda Sabrina Febriman Siregar Public Appraisal Office, Riau, Indonesia

DOI:

https://doi.org/10.32492/JPP.V10i1.10104

Keywords:

Global Economic Slowdown, Economic Growth Stability, Developing Countries, Panel Data Regression, Macroeconomic Resilience.

Abstract

Growth volatility, rather than merely reduced average growth, constitutes an underexplored welfare-critical consequence of global economic slowdowns in developing countries. Using a two-way fixed effects panel regression on 10 developing countries over 2010–2024, validated through Driscoll-Kraay correction and System-GMM endogeneity control, this study estimates how global GDP growth contractions amplify domestic output volatility operationalized as the rolling five-year standard deviation of annual real GDP growth rates and examines the conditioning roles of trade openness, foreign direct investment (FDI), and inflation as macroeconomic channels. Four robust findings emerge: (1) global slowdowns significantly increase growth volatility (β = −0.482, p < 0.001); (2) trade openness stabilizes growth under normal conditions (β = 0.214, p < 0.05); (3) FDI exhibits the strongest stabilizing effect (β = 0.367, p < 0.001), robust to endogeneity correction; and (4) inflation amplifies volatility by eroding countercyclical monetary policy space (β = −0.291, p < 0.001). These findings reframe growth volatility as the primary indicator of macroeconomic resilience, with policy implications for export diversification, countercyclical FDI frameworks, and central bank institutional independence as structural components of shock absorption capacity in developing economies.

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Published

2026-06-29

How to Cite

Dwirianto, S., Linda, R., Al Mamun, A., & Sabrina, A. A. (2026). Global Economic Slowdown and Economic Growth Stability in Developing Countries: Evidence from Two-Way Fixed Effects Panel Data Analysis, 2010–2024. Journal of Public Power, 10(1), 64–77. https://doi.org/10.32492/JPP.V10i1.10104

Issue

Vol. 10 No. 1 (2026): Journal of Public Power

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Articles

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Copyright (c) 2026 Sabarno Dwirianto, Roza Linda, Abdulla Al Mamun, Atika Ananda Sabrina

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