The Nexus among External Debt and Economic Growth: Evidence from South Asia

Sasindu Wanniarachchi
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Abstract

Over the past few years, external debt positions of South Asian economies have increased to alarming levels, indicating that those countries are more likely to be exposed to a debt crisis. Given the low domestic savings rate of these economies, they are increasingly compelled to invest significant resources in public infrastructure in order to maintain sustainable growth momentum. At the same time, those countries are invited to enrich by integrating with global synergies in the fields of maritime, trade, and financial initiatives. However, as the recent controversy over the debt-growth association is inconclusive to date; preserving the external debt exposures at an optimal level is incumbent. Consequently, this study reviews annual observations of independent cross-sections of South Asia during the period 1981-2017 in order to find the external debt-growth relationship. In addition, the quantitative research strategy used to measure the expected outcomes primarily consists of panel ARDL specifications. On aggregate levels of data, the results suggest that there is a statistically significant negative association between external debt and economic growth. Also, it has been observed that a significant nonlinear relationship exists in relation to lower-middle income countries.
外债与经济增长的关系:来自南亚的证据
在过去几年中,南亚经济体的外债状况已增加到令人震惊的水平,表明这些国家更有可能面临债务危机。鉴于这些经济体的国内储蓄率较低,它们越来越被迫将大量资源投资于公共基础设施,以保持可持续的增长势头。同时,邀请这些国家在海上、贸易、金融等领域融入全球协同效应,丰富自身内涵。然而,由于最近关于债务增长关联的争论至今尚无定论;将外债敞口保持在最佳水平是义不容咎的。因此,本研究回顾了1981-2017年南亚独立横截面的年度观测结果,以找到外债-增长关系。此外,用于测量预期结果的定量研究策略主要由面板ARDL规范组成。在总体数据水平上,结果表明,外债与经济增长之间存在统计学上显著的负相关关系。此外,人们还观察到,与中低收入国家之间存在显著的非线性关系。
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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