Debt–Growth Nexus: A Spatial Econometrics Approach for Developing Countries

Daud, Siti Nurazira Mohd; Podivinsky, Jan M.

doi:10.1007/s11300-011-0190-6

Cited by 14 publications

(12 citation statements)

References 21 publications

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“…The lagged spatial autoregressive coeffi cient was positively signifi cant at 5 percent signifi cance level, thus confi rming the interdependency among countries in the debtgrowth model. In addition, as has been established earlier in the paper by Daud and Podivinsky (2011), the result also proves that the spatial autoregressive specifi cation model best represents the data, as has been suggested by the LM specifi cation test 12 . The spatial coeffi cient represents growth spillover between countries where the spatially lagged dependent variable is estimated to be 0.15 and is statistically different from zero with at least a 95 percent level of confi dence.…”

Section: Spatial Independencesupporting

confidence: 78%

Revisiting the Role of External Debt in Economic Growth of Developing Countries

Daud

Podivinsky

2012

Journal of Business Economics and Management

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This paper proposes a study on the contribution of external debt to the expansion of economic growth for 31 developing countries. Over a period of 36 years, by using dynamic panel data econometrics estimation GMM-system, the results reveal that the accumulation of external debt is associated with a slowdown in the economies of the developing countries. In addition, this paper finds evidence that debt service ratio does not crowd out the investment rate in developing countries. In other words, even though external debt is negatively associated with economic growth, countries are found to be safe from being in the debt overhang hypothesis. Furthermore, there is evidence to support the existence of spatial dependence in the growth model, suggesting the existence of a positive spillover effect of growth among the neighbouring countries.

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Section: Spatial Independencesupporting

confidence: 78%

Revisiting the Role of External Debt in Economic Growth of Developing Countries

Daud

Podivinsky

2012

Journal of Business Economics and Management

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“…This is in line with previous studies that show that heavy debt burden creates the expectation of higher taxes in the future, thereby reducing the incentive to invest (Chowdhury, 2001). Empirically, studies by Daud andPodivinsky (2011) andFosu (1996) provide convincing evidence for the negative relationship between the external debt and economic growth in Sub-Saharan Africa. Presbitero (2005) demonstrates that the negative impact of debt on economic growth is more pronounced in low-income countries and has deleterious effect in very poor economies.…”

Section: Empirical Results and Discussionmentioning

confidence: 99%

Capital Flows and Economic Growth in Ghana

Klobodu

Adams

2016

Journal of African Business

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The study examines the differential effects of capital flows on economic growth in Ghana over the period 1970-2014 using autoregressive distributed lag (ARDL). Breakpoint unit root tests are employed to cater for structural change and breaks in time series. Afterwards, these break dates are fed into the ADRL model as dummy variables to allow for the computation of a more robust cointegrating vector. The findings indicate that in both the short and long run capital flows (i.e. FDI, aid, and external debt) have negative effects on economic growth. However, remittances exhibit positive insignificant elasticity in all the regressions. Further, the empirical results show that while the impact of trade, gross capital formation and population growth on growth are mixed, that of inflation is negative. The results of the study are consistent with the idea that the impact of capital flows in Africa has been exaggerated.

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“…3 The findings are in line with previous studies that demonstrate that a heavy debt burden creates the expectation of higher taxes in the future, thereby reducing the incentive to invest (Chowdhury, 2001). Daud and Podivinsky (2011) and Fosu (1996) suggest a negative relationship between external debt and economic growth in SSA. Supporting Daud and Podivinsky (2011), Presbitero (2005) reports that the negative impact of debt on economic growth is more pronounced in low-income countries.…”

Section: Empirical Results and Discussionmentioning

confidence: 99%

The Effects of Capital Flows on Economic Growth in Senegal

Adams

Klobodu

Lamptey

2017

Margin: The Journal of Applied Economic Research

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This article examines the effects of capital flows on economic growth in Senegal using autoregressive distributed lag (ARDL) over the period 1970-2014. Overall, our results show that remittances cause economic growth in Senegal in the long run. In contrast, external debt has a negative impact on economic growth. The ARDL results, however, show no cointegration between aid and growth or between foreign direct investment (FDI) and growth. The Quandt-Andrews breakpoint test selects year 1991 as the most likely breakpoint location for the remittances-growth equation. Finally, time-varying parameter analyses using the year 1991 as a slope dummy reveal that remittances have been growthenhancing post-1991. Therefore, government and policy makers in Senegal must create a favourable atmosphere for attracting more remittances to promote economic development.

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Debt–Growth Nexus: A Spatial Econometrics Approach for Developing Countries

Abstract: Economic growth, International economics, External debt, Spatial econometrics, F43, F34, H63, E66,

Cited by 14 publications

References 21 publications

Revisiting the Role of External Debt in Economic Growth of Developing Countries

Revisiting the Role of External Debt in Economic Growth of Developing Countries

Capital Flows and Economic Growth in Ghana

The Effects of Capital Flows on Economic Growth in Senegal

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