Relative role of external debt, FDI, and domestic investment in economic growth: evidence from Sri Lanka

2021 ◽  
Author(s):  
Biswajit Maitra
Keyword(s):  
Economic Growth ◽  
Sri Lanka ◽  
External Debt ◽  
Relative Role ◽  
Domestic Investment

scholarly journals Role of Financial Sector Development as a Contingent Factor in the Remittances and Growth Nexus: A Panel Study of Pacific Island Countries

2018 ◽  
Vol 3 (1) ◽  
pp. 51-74 ◽  
Author(s):  
Tiru K. Jayaraman ◽  
Lin Sea Lau ◽  
Cheong Fatt Ng
Keyword(s):  
Economic Growth ◽  
Technical Assistance ◽  
Panel Study ◽  
Financial Sector ◽  
Institution Building ◽  
Pacific Island ◽  
Domestic Investment ◽  
Financial Sector Development ◽  
Pacific Island Countries

Except for emergencies and for technical assistance for raising skills and institution building, foreign aid to Pacific island countries (PICs) for budgetary support has been phased out since the late 1990s. Because of the small sized domestic markets, foreign direct investment (FDI) is small and is confined to development of tourism infrastructure. On the other hand, inward remittances received from the rising number of islanders migrating overseas for work are increasing, far exceeding aid and FDI. However, influence of remittances on economic growth depends on financial sector development (FSD) for mobilizing the savings from the remittance receipts for domestic investment. This paper assesses the role of FSD in the nexus between remittances and economic growth through a panel study of five major PICs, namely Fiji, Samoa, Solomon Islands, Tonga and Vanuatu.  The study findings show that the ongoing efforts for strengthening FSD have to be stepped up by focusing on financial inclusion through spread of branchless banking and promotion of  information and communication technology.

Corruption, Business Climate, and Economic Growth

2015 ◽  
pp. 1156-1179
Author(s):  
Harish C. Chandan
Keyword(s):  
Economic Growth ◽  
Political Institutions ◽  
Business Environment ◽  
Domestic Investment ◽  
Business Climate ◽  
Transparency International ◽  
Leadership Management ◽  
Economic Freedom Index ◽  
The Relationship

Corruption is globally pervasive. Defined as abuse of entrusted power for private gain (Transparency International, 2013), corruption represents a set of economic, social, cultural, and political practices that are secretive and rooted in greed, ambition, or quest for power. This chapter reviews causes of corruption including the macro- and micro-level determinants of corruption such as leadership, management, and organizational culture. Various subjective and objective measures of corruption are discussed. Transparency International's Corruption Perception Index (CPI) and Heritage Foundation's Economic Freedom Index (EFI) are reviewed. The World Bank's Business Environment and Enterprise Performance Survey (BEEPS), Doing Business Indicator (DBI), and World Bank Institute's Governance Indicator (WBI-GI) are also reviewed, as is the role of global anti-corruption agencies and various instruments. Additionally, the relationship between corruption and foreign domestic investment, economic growth, and economic and political institutions are considered, as are anti-corruption intervention strategies for corruption and business ethics training.

Does Financial Liberalization and Trade Openness Promote Growth in South Asia?

2010 ◽  
pp. 101-132
Author(s):  
Muhammad Arshad Kahn
Keyword(s):  
Economic Growth ◽  
Sri Lanka ◽  
Trade Liberalization ◽  
Inflation Rate ◽  
Financial Liberalization ◽  
Trade Openness ◽  
Real Output ◽  
Domestic Investment ◽  
Long Run ◽  
Short Run

This chapter examines the hypotheses that trade liberalization and financial liberalization jointly enhances economic growth in the four South Asian countries including Bangladesh, India, Pakistan and Sri Lanka for the period 1970-2007 using bounds testing approach to cointegration. The results suggest that in the long-run except for Bangladesh, financial development plays no role in promoting economic growth in these countries. Furthermore, the results suggest that trade openness plays a significant role in promoting economic growth in Bangladesh and India, while exerts negative effect on Pakistan and no effect on Sri Lanka. The share of domestic investment influences real output significantly in Bangladesh, India and Pakistan. In the long- as well as short-run two-way causality between real output, trade openness, share of investment and inflation rate exists for the case of Bangladesh and India. For the case of India two-way causality between finance and growth exists in the short-run. For the case of Pakistan, there is an evidence of long-run causality between real output, finance, trade openness, share of investment and inflation rate. However, in the short-run, two-way causality between real output, trade openness and share of investment is existed and one-way causality between inflation rate, trade openness and share of investment is also observed. No evidence of short-run causality between finance and growth and vice versa for Pakistan has been seen. Finally, for Sri Lanka, an evidence of long-run causality between real output, finance, trade openness and investment share has been found. In the short-run one-way causality between finance-growth, trade-finance, trade-growth and trade-investment has been obtained. These mixed results suggest that the authorities may focuses more and more on the trade liberalization. In addition, there is a need to further deepen the banking and stock markets and provide investment friendly environment to enhance domestic investment which, in turn, promotes economic growth.

The effect of FDI on domestic investment and economic growth case of three Maghreb countries

2019 ◽  
Vol 61 (1) ◽  
pp. 91-105 ◽  
Author(s):  
Walid Ali ◽  
Ali Mna
Keyword(s):  
Economic Growth ◽  
World Bank ◽  
Design Methodology ◽  
Domestic Investment ◽  
Content Type ◽  
The World Bank ◽  
Endogenous Variables ◽  
The Interest Rate ◽  
Investment Growth

PurposeThe purpose of this study is to show how foreign direct investment (FDI) affects domestic investment and economic growth. This study empirically examines this question in the case of three developing countries (Tunisia, Algeria and Morocco).Design/methodology/approachUsing the GMM estimator technique, the authors constructed a system with simultaneous equations by three endogenous variables: economic growth (GDP), FDI and domestic investment (DI).FindingsThe study was a nuance, its results, at the role of investment–growth relationship, are of paramount importance though subtle and slightly different.Originality/valueThe authors used data from international institutions such as the IMF, UNCTAD, OECD and the World Bank for macroeconomic aggregates. However, the interest rate variables are derived from the central banks of the three countries in the sample. The analysis covers the period from 1980 to 2014.

scholarly journals EXTERNAL DEBT, INSTITUTIONAL QUALITY AND ECONOMIC GROWTH

2020 ◽  
Vol 23 (2) ◽  
pp. 221-238
Author(s):  
Siti Nurazira Mohd Daud
Keyword(s):  
Economic Growth ◽  
Panel Data Analysis ◽  
External Debt ◽  
Institutional Quality ◽  
Dynamic Panel Data ◽  
Dynamic Panel ◽  
Debt Overhang ◽  
Negative Effect ◽  
Dynamic Panel Data Analysis

This paper addresses the gap in the literature by investigating the role of the institutional quality in the nexus of external debt and economic growth. By employing a dynamic panel data analysis, we found that the institutional quality plays some role in complementing the effect of external debt on a country’s economic growth. We also found that the negative effect of external debt and a country’s economic growth monotonically increases with the level of institutional indicator, which implies the possibility of debt overhang may still happen in economies endowed with good institutions, but for higher values of debt.

scholarly journals The role of foreign direct investment in economic growth of Nigeria

2020 ◽  
Vol 28 (2) ◽  
pp. 357-366
Author(s):  
Michael Madojemu
Keyword(s):  
Economic Growth ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Unit Root Test ◽  
Domestic Investment ◽  
Econometric Methods ◽  
Long Run ◽  
Security Challenges ◽  
Adf Test

The paper investigates the relevance of foreign direct investment (FDI) as a factor inhibiting economic growth in Nigeria. This paper inspects the sectorial influence of FDI in manufacturing, mining, oil and the telecommunications sectors on economic growth in Nigeria based on theoretical framework founded on the standard growth accounting theory, detailed analysis of the sectorial FDI over the period 1981 and 2017 was carried out. Various econometric methods are employed, such as the ADF test, Dickey and Fuller test (1979), PP test (Phillips and Perron, 1988) are used for the unit root test, and the Shahbaz and Rahman (2010) method is used for the long-run relationship between the foreign direct investment and economic growth. The paper also adapted the framework provided by M.B. Obwona (2004). The paper formalizes a mechanism of recommendations to allow for the influence of foreign direct investment in the transmission of socio-economic growth generated in Nigeria. In conclusion, government should provide an enabling environment that will encourage foreign investors to invest in Nigeria economy by addressing the security challenges in the country, understanding that investment friendly environment will improved regulatory framework as well as encourage domestic investment.

Role of External and Domestic Demand in Economic Growth: A Study of BRICS Countries

2019 ◽  
Vol 21 (2) ◽  
pp. 547-566 ◽  
Author(s):  
Bibhuti Ranjan Mishra
Keyword(s):  
Economic Growth ◽  
Developed Countries ◽  
Domestic Demand ◽  
Impulse Response Functions ◽  
Domestic Investment ◽  
Causality Analysis ◽  
Brics Countries ◽  
External Demand ◽  
The Impact

Despite the global downturn since 2008, the growth in BRICS countries as a group is least hampered as compared to the growth in the world, in general, and developed countries, in particular. Is it due to the strong domestic demand factors or external factors is an empirical question to be answered. Further, some economists are promulgating for a new development strategy of domestic demand-led growth. Hence, this article tries to examine the role of domestic and external demand to growth in BRICS countries. Domestic investment is taken to explore the impact of domestic demand on growth, while export and import variables are used to investigate the role of external demand in economic growth. To cater to the objective, causality analysis is done among exports, imports, domestic investment and economic growth using the vector auto regression analysis. Generalized impulse response functions are plotted to get an insight of dynamic interrelationships among these variables. The results are country-specific and mixed evidence of export-led and domestic demand-led growth is found depending on the individual countries of BRICS.

Corruption, Business Climate, and Economic Growth

2019 ◽  
pp. 663-686
Author(s):  
Harish C. Chandan
Keyword(s):  
Economic Growth ◽  
Political Institutions ◽  
Business Environment ◽  
Domestic Investment ◽  
Business Climate ◽  
Transparency International ◽  
Leadership Management ◽  
Economic Freedom Index ◽  
The Relationship

Corruption is globally pervasive. Defined as abuse of entrusted power for private gain (Transparency International, 2013), corruption represents a set of economic, social, cultural, and political practices that are secretive and rooted in greed, ambition, or quest for power. This chapter reviews causes of corruption including the macro- and micro-level determinants of corruption such as leadership, management, and organizational culture. Various subjective and objective measures of corruption are discussed. Transparency International's Corruption Perception Index (CPI) and Heritage Foundation's Economic Freedom Index (EFI) are reviewed. The World Bank's Business Environment and Enterprise Performance Survey (BEEPS), Doing Business Indicator (DBI), and World Bank Institute's Governance Indicator (WBI-GI) are also reviewed, as is the role of global anti-corruption agencies and various instruments. Additionally, the relationship between corruption and foreign domestic investment, economic growth, and economic and political institutions are considered, as are anti-corruption intervention strategies for corruption and business ethics training.

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