The effects of foreign aid on economic growth in developing countries

The effect of globalisation for economic growth of developing countries

“…However, it was expected that globalisation of economic sphere, given that trade balance is positive, will foster growth rather than diminish it. This would go in line with results of previous authors (Kilic, 2015;Paudel, 2014;Rahnama et al, 2017) who found positive links between economic sphere of globalisation and economic growth. The difference of result sign could be explained by usage of different time periods and set of countries as well as methodology, also by different controls in the model.…”

“…aid and economic growth, taking degree of trade openness (economic dimension of globalisation) as one of the control variables. Rahnama et al (2017) aimed to prove that effect foreign direct investment has on growth is different between LIDC and HIDC and this hypothesis was confirmed. According to empirical findings, foreign aid has positive impact on economic growth in HIDC and negative impact on growth in LIDC.…”

“…Secondly, the model of growth, which was taken as a basis in this research, is not new in comparison to the most recent ones and might not give needed attention to newly acknowledged growth drivers, such as innovations. Thirdly, although country taxonomy according to the development level is internationally recognised, it might be useful to use a different way of categorizing the countries, following examples of Paudel (2014), Rahnama et al (2017) and other authors. One of the alternative ways could be using income level or some more complex taxonomy criteria, for example, combination of income level and belonging to major economic organisations.…”

Complementarity Between Foreign Aid and Financial Development as a Driver of Economic Growth in Selected Emerging Markets

“…Albiman 2016, Alemu and Lee (2015), Ekanayake and Chatrna 2010and Rahnama et al (2017), among others, are the more recent empirical studies which corroborated the mixed results hypothesis. For example, Albiman (2016) investigated the effect of foreign aid on economic growth in Tanzania using the dynamic ordinary least squares approach with time series data ranging from 1976 to 2014.…”

“…Using the dynamic GMM approach, Rahnama et al (2017) investigated the impact of foreign aid on economic growth in developing countries. They observed that economic growth was positively influenced by foreign aid in high income developing countries, especially in the later stages of development.…”