||In the process of economic development, some countries experienced a fast economic growth, enabling them to become high-income countries from low-income countries. However, some countries struggle from low-income countries to middle-income countries and then stagnate, falling into falling into the middle income trap. This thesis aims to investigate the determinants of escaping the middle income trap. Based on a panel dataset of 92 middle income countries for the 1990-2015, we adopt panel probit model and panel ordered probit model to implement empirical estimations. Results show that traditional variables such as capital formation, education, and trade openness are associated with a positive relation with the probability of jumping to high-income countries. Innovation also helps escape the middle income trap. With regard to the institutional factors, both lowering the degree of corruption and raising the degree of democracy increase the probability of avoiding the middle income trap.|
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