scholarly journals Investigating the Impact of External Debt on Economic Growth: A Case Study of Pakistan

2021 ◽  
Vol 4 (2) ◽  
pp. 41-51
Author(s):  
IRUM SAJJAD ◽  
IRUM SAJJAD ◽  
DR. MUHAMMAD AZAM KHAN
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
External Debt ◽  
Gdp Growth ◽  
Policy Makers ◽  
Explanatory Variables ◽  
Gdp Growth Rate ◽  
Augmented Dickey Fuller ◽  
The Impact ◽  
Adf Test

This article is an attempt to evaluate the effect of external debt on economic growth for during the period of 1980–2016. The Augmented Dickey Fuller (ADF) test is used for determining stationarity, whereas the ADF test results exhibit that the variables used found are . The empirical results indicate that external debt and total debt service have deleterious and statistically significant impacts on GDP growth rate. The other explanatory variables namely human capital by life expectancy, exports, and Foreign Direct Investment (FDI)reveals significantly positive significant influence on GDP growth rate. Appropriate policy should be adopted by the policy makers to reduce external debt, increase volume of exports and enhance more foreign investment, it will boost economic growth in the country.

scholarly journals Analysis of the Impact of Exchange Rate, Inflation, Export and Import on Gross Domestic Product in Bangladesh

2019 ◽  
pp. 170-175
Author(s):  
Papi Halder
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Exchange Rate ◽  
Gross Domestic Product ◽  
Positive Impact ◽  
Domestic Product ◽  
Gdp Growth ◽  
Policy Makers ◽  
Gdp Growth Rate ◽  
The Impact

This study is about the impact of selected macroeconomic variables on economic growth of Bangladesh. Economic growth of Bangladesh is measured in terms of annual nominal GDP growth rate. Least squared regression model has been employed considering exchange rate, export, import and inflation rate as independent variables and gross domestic product as the dependent variable in this study. The results reveal that export and import have significant positive impact on GDP growth rate. The other variables (exchange rate and inflation) are not significant, indicating that there exists no significant relationship among the variables. The findings will help the policy makers to make policies concerning the country’s economic growth to remain robust in the near future.

scholarly journals Impact of External Debt on Economic Growth in Jordan for the Period (2010-2017)

2019 ◽  
Vol 11 (4) ◽  
pp. 114 ◽  
Author(s):  
Khaled Abdalla Moh’d AL-Tamimi ◽  
Mohammad Sulieman Jaradat
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Direct Investment ◽  
External Debt ◽  
Empirical Literature ◽  
Gdp Growth ◽  
Annual Data ◽  
Gdp Growth Rate ◽  
Independent Variable ◽  
The Impact

The study investigates the effect of external debt on economic growth in Jordan by using annual data for the period (2010-2017) by using external debt as a percentage of gross domestic product (GDP) as an independent variable, and GDP growth rate (A proxy for economic growth) as a dependent variable. The study starts with theoretical literature for the impact of external debt on economic growth, then empirical literature for previous studies that analyze the same relationship, after that analyzing the impact of external debt on economic growth in Jordan during the period (2010-2017). The study finds the same conclusion as previous studies that there is a negative and significant impact of external debt on economic growth during the study period, and recommends relying on other financing methods like foreign direct investment.

scholarly journals Taxation, government spending and economic growth: The case of Bulgaria

2021 ◽  
Vol 7 (3) ◽  
pp. 255-266
Author(s):  
G. Ganchev ◽  
◽  
I. Todorov ◽  
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Tax Revenue ◽  
Gdp Growth ◽  
Real Gdp ◽  
Long Run ◽  
Gdp Growth Rate ◽  
Short Run ◽  
The Impact

The objective of this article is to estimate the impact of three fiscal instruments (direct taxes, indirect taxes, and government expenditure) on Bulgaria’s economic growth. The study employs an autoregressive distributed lag model (ARDL) and Eurostat quarterly seasonally adjusted data for the period 1999–2020. Four control variables (the shares of gross capital formation, household consumption, and exports in GDP as well as the economic growth in the euro area) are included in the model to account for the influence of non-fiscal factors on Bulgaria’s real GDP growth rate. The empirical results indicate a long-run equilibrium relationship between Bulgaria’s economic growth and the independent variables in the ARDL. In the short term, Bulgaria’s real GDP growth rate is affected by its own past values and the previous values of the shares of direct tax revenue, exports, government consumption, and indirect tax revenue in GDP. In the long term, Bulgaria’s economic growth is influenced by its own previous values and the past values of the share of household consumption in GDP and the euro area’s real GDP growth rate. Fiscal instruments can be used to stabilize Bulgaria’s growth in the short run but they are neutral in the long run. The direct tax revenue, government consumption, and indirect tax revenue are highly effective and can be used as tools for invigorating and stabilizing Bulgaria’s economic growth in the short run. However, in the long term, the real GDP growth rate can be hastened only by encouraging domestic demand (final consumption expenditure of households) and promoting exports. This research cannot answer the question of whether flat income taxation stabilizes the economy or not, since it does not separate the impact of tax rate changes from the influence of tax base modifications.

scholarly journals Domestic Debt and Economic Growth in Tanzania

2018 ◽  
Vol 1 (1) ◽  
pp. p207
Author(s):  
Josephat Lotto ◽  
Catherine T. Mmari
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Gdp Growth ◽  
Gdp Growth Rate ◽  
Domestic Debt ◽  
Negative Effect ◽  
The Government ◽  
The Impact ◽  
The Relationship ◽  
Positive Effect

The main objective of this paper was to examine the impact of domestic debt on economic growth in Tanzania for the period 1990 to 2015 using Ordinary Least Square (OLS) regression method to estimate the effects. The study finds that there is an inverse but insignificant relationship between domestic debt and the economic growth of Tanzania as measured by GDP annual growth. The inverse relationship between domestic debt and GDP may be caused by different factors such as; increased trend in domestic borrowing, government lenders’ profile dominated by commercial banks and non-bank financial institutions which promotes the “crowding out” effect; the nature of the instruments used by the government ; the improper use of the domestic borrowed funds which may include funding budgetary deficits, paying up principal and matured obligations on debt, developing financial markets as well as fund other government operations. Other control variables relate with the GDP as predicted. For example, Inflation (INF) has a negative effect on the GDP growth rate, but the relationship is not statistically significant, while gross capital formation (GCF) has a positive statistically significant effect on GDP growth rate. Furthermore, foreign direct investment (FDI) showed a positive effect on the GDP growth rate and export (X) has a positive effect on GDP growth rate, and the relationship is statistically significant explaining that if a country applied an export-led growth economic strategy it enjoys the gains of participating in the world market. This means that an increase in export stimulates demand for goods which leads to increase in output, and as a country’s output increases, the economic performance also takes a similar trend. Finally, government expenditure (GE) had a negative effect on the GDP growth rate which may be explained by the increased government expenditures which are funded by either tax or borrowing. Therefore, what is required for countries like Tanzania is to have better debt management strategies as well as prudential financial management while maintaining to remain within the internationally acceptable debt level of 45% of GDP and maintain a GDP growth rate of not less than 5%. It is important for the country to realize from where to borrow from, the tenure, the risks involved and limitations to borrowing and thus set the right balance of combination of both kinds of debt. Another requirement is to properly utilize the borrowed funds. The central government’s objective should be to use the funds in more development-oriented projects that bring positive returns to the economic development.  The government should not only create a right environment and policies for investment to attract investment from domestic and foreign sources but also be cautious about the kind of investments that the foreign investors make.

scholarly journals INVESTMENT AND ECONOMIC GROWTH: THE EXAMPLE OF BOSNIA AND HERZEGOVINA

2021 ◽  
pp. 21-41
Author(s):  
Jelena Bjelić
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Bosnia And Herzegovina ◽  
Foreign Investment ◽  
Added Value ◽  
Gdp Growth ◽  
Gdp Growth Rate ◽  
Total Investment ◽  
The Impact ◽  
The Relationship

An investment is a factor of the economic growth and a mandatory constituent in the majority of development models. This study analyzes the impact of the gross investment on the economic growth in Bosnia and Herzegovina (BiH) for the period 2005-2017, and provides the assessment of the interdependence of investment and a newly added value in industry. The relationship between the foreign investment and the economic growth is also included. The dependent variables are the GDP growth rate and the added value in industry (as % of GDP). The independent variables are the total investment rate (as % of GDP) and the foreign investment rate (as % of GDP). The hypothesis is that the gross investment and the foreign investment are positively correlated with the GDP growth rate. The investments contribute to a higher newly added value in industry. The results show that the gross investment is a significant factor of the economic growth because there is a high significance and positive correlation between the observed variables (the total investment and the GDP growth). This shows that the investment growth stimulates the economic growth in Bosnia and Herzegovina. But the dynamic analysis as an investment-GDP ratio shows oscillations. The impact of investments on the share of the newly added value in industry is insignificant and negative. The results of the dynamic analysis are similar. The relationship between the variables of the foreign investment rates and the GDP growth is significant and positive. Although the foreign investments are not sufficient, they still contribute, to a certain extent, to the economic growth of BiH.

scholarly journals External Debt and Economic Growth of Nigeria: An Empirical Investigation

2018 ◽  
pp. 1-11 ◽  
Author(s):  
S. Sajuyigbe, Ademola ◽  
A. Odetayo, Tajudeen ◽  
Z. Adeyemi, Adewumi
Keyword(s):  
Economic Growth ◽  
Time Series Data ◽  
External Debt ◽  
Debt Management ◽  
Series Data ◽  
Causality Test ◽  
Secondary Sources ◽  
Augmented Dickey Fuller ◽  
The Impact ◽  
Adf Test

The study investigates the impact of external debt on economic growth in Nigeria for the period 1999-2015. The data for this study was obtained mainly from secondary sources mainly from Central Bank of Nigeria (CBN) Statistical Bulletins and Debt Management Office. Time series data on Gross Domestic Product (GDP) as a proxy for Economic Growth, External Debt Stock (EXDS), External Debt Service Payment (EDSP), and Exchange Rate (EXGR) were used for the analysis. The techniques of Estimation employed in the study include Augmented Dickey Fuller (ADF) test, Johansen Co-integration, Vector Error Correction Mechanism and Granger Causality Test. Results show that external debt has an inverse effect on economic growth in Nigeria. Subsequently, the study recommends that government should empower Debt Management Office to set the mechanism in place, ensure that loans are utilised for purposes they are meant for and prosecute corrupt public officers who siphoned the money.

scholarly journals A Johansen Cointegration Test for the Relationship between Remittances and Economic Growth of Japan

2017 ◽  
Vol 11 (10) ◽  
pp. 137 ◽  
Author(s):  
Suwastika Naidu ◽  
Atishwar Pandaram ◽  
Anand Chand
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Migrant Workers ◽  
Developed Countries ◽  
Gdp Growth ◽  
Data Set ◽  
Economic Growth Rate ◽  
Gdp Growth Rate ◽  
The Impact ◽  
The Relationship

Remittance inflows have been a key stimulus to economic growth of many developing countries. There is scant literature available on the impact of remittance inflows and outflows on the economic growth of the large developed countries. For instance, there is little literature on the impact of remittance inflows and outflows on the economic growth rate of Japan. Hence this research objective of this paper is to investigate the relationship between ‘remittance inflows’ and ‘outflows’ on the ‘economic growth rate’ of Japan. The paper by utilizing the World Bank data set and the econometric model namely the Granger Causality Model to test and analysis the impact of remittance inflows and outflows on the economic growth rate of Japan. The findings show that in the long run, a 1% increase in remittance outflows will decrease GDP growth rate by 0.000793%. In the short run, a 1% increase in remittance outflows and inflows will decrease GDP growth rate by 0.000599% and 0.000327% respectively. The Japanese government should encourage retired Japanese workers to return to the labour market and effectively contribute to the workforce and retired workers can be re-trained so that less foreign migrant workers are needed and this will reduce remittance outflow. 

scholarly journals INVESTMENT IN HIGHER EDUCATION VERSUS ECONOMIC GROWTH – A PROPOSAL FOR THE DECOMPOSITION OF THE MRW MODEL FOR POLAND

2017 ◽  
Vol 16 (2) ◽  
pp. 97-108
Author(s):  
Iwona Kowalska ◽  
Bartosz Banduła
Keyword(s):  
Higher Education ◽  
Economic Growth ◽  
Growth Rate ◽  
Gdp Growth ◽  
Structural Funds ◽  
Knowledge Based ◽  
Gdp Growth Rate ◽  
Financing Higher Education ◽  
The Impact ◽  
The Eu

Higher education has become an increasingly knowledge-based sector of the present-day economy. The state faces the issues of financing higher education and assessing the effects of investment in the sector of higher education. The aim of this article is to determine the impact of investment expenditure on higher education (including the resources from the EU funds) on Poland’s economic growth as measured by the GDP growth rate. The research hypothesis of the article is that the economic growth that is caused by investment in higher education with the contribution of the EU funds results in a higher GDP growth than in the case when there is no access to such resources. The results of the research indicate that increased investment in higher education, which was the result of the availability of the EU structural funds, influenced the increase in human capital in Poland and raised its impact on the GDP growth rate.

scholarly journals THE IMPACT OF EXPORTS ON ECONOMIC GROWTH OF PAKISTAN AND INDIA

2019 ◽  
Vol 2 (02) ◽  
pp. 77-89
Author(s):  
Rasheed Khan
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Unit Root ◽  
Unit Root Test ◽  
Direct Foreign Investment ◽  
Ordinary Least Squares ◽  
Policy Makers ◽  
Augmented Dickey Fuller ◽  
The Impact ◽  
Adf Test

The aim of this study is to investigate the impact of exports on economic growth of Pakistan and India for the period of 1990 to 2016. The unit root test namely Augmented Dickey Fuller (ADF) test was used to identify stationarity in the data. The method of Fully Modified Ordinary Least Squares (FMOLS) was employed to estimate the coefficient of the variables. The FMOLS results exhibit that exports is having positive and significant impact on economic growth in both countries. Moreover, the empirical results reveal that Foreign Direct Investment (FDI) inflow and human capital have also positive and significant effect on the economic growth. The findings of this study suggest that policy makers need to make effective policies in order to increase the volume of exports as well as attract direct foreign investment and encourage human capital in order to stimulate economic growth.

scholarly journals The Impact of Trade Openness and Export Expansion Grants in Nigerian Economy (1986-2019): New Evidence from Quantile Regression.

2021 ◽  
Author(s):  
Behiye Cavusoglu ◽  
Mohammed A. M Usman
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Quantile Regression ◽  
Granger Causality ◽  
Trade Openness ◽  
Gdp Growth ◽  
Annual Data ◽  
Gdp Growth Rate ◽  
Export Expansion ◽  
The Impact

Abstract Trade openness and export promotion policies such as export expansion grants are the furthermost competent yardstick for measuring growth and development, approved by various countries since 1970s. Looking at the Nigeria economy whose depends almost largely on external trade is inclusive. Therefore, this analysis explores the effects of trade openness and export expansion grants on Nigerian economy using annual data from 1986-2019. This analysis makes use of coefficient covariance metrics, stability leverage plots and pairwise granger causality and quantile regression to portray the impact of trade openness and export expansion grants on Nigerian economic growth. The outcomes confirm that, there was a positive relationship between trade openness (TOPN) and economic growth (GDPR) in the first and last quantiles (seventh) quantile while the remaining quantiles has negative effect on GDP growth rate of Nigeria and were statistically insignificant during the study era. While the coefficients of export expansion grants (EEXG) have positive effect on GDP growth rate of Nigeria in all quantiles but statistically significant only in sixth as well seventh quantile. Also, the result of pairwise granger causality showed strong bi-directional causality between trade openness and GDPR at 5% level of significance as well as uni-directional causality running from GDPR to export expansion grants. Therefore, it recommended that, Nigerian government should adjust the structure of its trade through concentrating on high value-added products instead of exporting semi-finished goods as well by given more support to domestic industries (such as subsidies, tax holiday, more export expansion grants) to compete internationally. Also, government should maintain stable exchange rate as well policies through effective monetary policies that would reduce inflation rate in the economy in order to attain Nigeria's Economic Recovery and Growth Plan which is in line with SDGs goal of 2023 in Nigeria.

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