GDP Composition and Poverty: Evidence from Cross-Country Data

Joseph Casey Diego Banjarnahor; Rosma Indriana Purba; Ferry Vincenttius Ferdinand

doi:10.56741/IISTR.jmsd.002209

Authors

Joseph Casey Diego Banjarnahor Universitas Pelita Harapan
Rosma Indriana Purba
rosma.purba@uph.edu
Universitas Pelita Harapan https://orcid.org/0000-0002-5960-3776
Ferry Vincenttius Ferdinand Universitas Pelita Harapan https://orcid.org/0009-0003-8535-7008

DOI:

https://doi.org/10.56741/IISTR.jmsd.002209

Keywords:

Cross-Country Analysis, Expenditure Shares, GDP Expenditure, GDP per Capita, Poverty

Abstract

This study examines whether the expenditure composition of gross domestic product (GDP) is systematically associated with poverty across countries, beyond the role of GDP levels alone. Using cross-country data from the World Bank’s World Development Indicators for the period 2000–2024, the study analyzes the relationship between poverty rates and the shares of consumption, investment, government spending, and net exports in GDP. The empirical approach combines descriptive statistics, Pearson correlation analysis, and ordinary least squares regression based on long-run country averages, with log GDP per capita included as a control variable. The results indicate that countries with higher consumption shares tend to have higher poverty rates, while net export shares are negatively associated with poverty in bivariate analysis. However, after controlling income differences, the association between net exports and poverty becomes positive. Investment and government spending shares show weaker and less consistent relationships with poverty. Overall, the findings suggest that income remains the dominant factor associated with cross-country poverty differences, while GDP composition provides additional structural information related to poverty outcomes. The results should be interpreted as cross-country associations rather than causal effects.

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Author Biographies

Joseph Casey Diego Banjarnahor, Universitas Pelita Harapan

is an undergraduate student in Applied Mathematics with a focus on macroeconomics, currently pursuing his studies at Universitas Pelita Harapan, Indonesia. His academic interests lie at the intersection of macroeconomic theory, quantitative modeling, and policy analysis. He is particularly interested in economic growth, financial markets, and the application of mathematical methods to solve real-world economic problems. Beyond academics, he is actively involved in leadership and professional development initiatives, including the establishment of a Management Consulting Club aimed at preparing students for careers in top-tier consulting firms. His work reflects a strong commitment to analytical rigor, strategic thinking, and impactful economic insight. (email: jbanjarnahor28@gmail.com).

Rosma Indriana Purba, Universitas Pelita Harapan

is affiliated with Universitas Pelita Harapan, Banten, Indonesia. She serves as a lecturer in primary education and has extensive experience teaching in both national and international programs. In addition to her academic role, she holds leadership responsibilities as Head of the Primary Education Study Program. Her scholarly interests center on educational research and its impact on classroom practice and instructional improvement. (email: rosma.purba@uph.edu).

Ferry Vincenttius Ferdinand, Universitas Pelita Harapan

is a professional in mathematics and finance with over a decade of cross-sector experience. Currently serving as a Chief Financial Officer, with a strong background as a Business Analyst, demonstrating solid analytical and strategic thinking. In education, serves as a mathematics lecturer at Universitas Pelita Harapan and has experience as a teacher and tutor. This journey reflects a commitment to fostering logical thinking, precision, and meaningful learning, contributing to the development of intellectually capable, ethical, and globally prepared individuals. (email: ferry.vicenttius@uph.edu).

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