Analyzing the Impact of Foreign Capital Inflows on the Current Account Balance in Developing Economies: A Panel Data Approach

Amjad Ali, Marc Audi
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Abstract

This research has explored the effects of foreign capital inflows on the current account deficit in developing countries from 1995 to 2020. The study considers various factors such as import demand, export demand, foreign direct investment, foreign debt, economic growth, foreign remittances, and foreign reserves as independent variables. The analysis utilizes the panel autoregressive distributed lag approach to examine both the long-run and short-run relationships between the dependent and independent variables. Moreover, the study employs the Panel Granger causality test to evaluate the causal connections among the selected variables. The results indicate that import demand, foreign debt, and remittance inflows positively affect the current account deficit in developing countries. Conversely, export demand, foreign direct investment, economic growth, and foreign reserves have a negative impact on the current account deficit. Consequently, it is recommended that developing countries prioritize the augmentation of stable and substantial foreign reserves as a strategy to alleviate the level of the current account deficit.”
外资流入对发展中经济体经常账户余额的影响分析:面板数据方法
本研究探讨了1995年至2020年外国资本流入对发展中国家经常账户赤字的影响。该研究考虑了进口需求、出口需求、外国直接投资、外债、经济增长、外国汇款和外汇储备等各种因素作为自变量。分析利用面板自回归分布滞后方法来检查因变量和自变量之间的长期和短期关系。此外,本研究采用面板格兰杰因果检验来评估所选变量之间的因果关系。结果表明,进口需求、外债和汇款流入正向影响发展中国家的经常账户赤字。相反,出口需求、外国直接投资、经济增长和外汇储备对经常账户赤字产生负面影响。因此,建议发展中国家优先考虑增加稳定和大量的外汇储备,作为减轻经常帐户赤字水平的一项战略。”
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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