The impact of non-profit sector on economic growth in the new world order: Dynamic panel data analysis on selected OECD countries

The limited conception of the state, which marked the last quarter of the twentieth century, has led to a great development of the nonprofit sector both locally and globally. This development, along with several innovations brought about by the new era we are in, has created a rapid change in the entire financing structure, not only in the social and political sphere today, but also in the numbers, incomes, expenses, employees of sector organizations. As a matter of fact, empirical, theoretical studies and many technical reports conducted on the sector over the past two decades show how the sector has become important in the economic literature and professional fields. Even though these studies contain strong claims about the economic value of the sector, they have often not been tested from an econometric point of view. To fill this gap, with this study it is aimed to bring a quantitative, measurable, and original model between the sector and economic growth into the light. With this study, raising the question of "how much the sector actually affects national economies" will play an important role in correctly understanding the value of sector organizations in national economies. From this point of view, the subject of this study is investigating the dynamic panel analysis techniques using the system GMM approach on eighteen OECD countries using their data sets for a period of ten years, between 2008 and 2018. According to empirical results of the study, it can be clearly seen that the nonprofit sector has a positive effect on GDP per capita, which is one of the significant indicators of economic growth. Besides, the analysis found out that the positive impact of the sector on GDP per capita in countries with public social spending below the OECD average is higher than in countries with public social spending above the OECD average. This study, which is presented with limited resources, will be enlightening for policymakers and a starting point for new studies in terms of the macroeconomic contributions that the sector provides to the national economies.