Factors Affecting External Debt in Malaysia: An Empirical Investigation

Pyeman, Jaafar; Noor, Nor Halida Haziaton Mohd; Mohamad, Wan Mohd Firdaus Wan; Yahya, Akmal Asyraf

doi:10.1007/978-981-287-426-9_39

Cited by 8 publications

(9 citation statements)

References 5 publications

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“…Furthermore, GDP has a negative and significant impact on external debt in the entire model, which is as expected and consistent with economic theory that higher economic growth should certainly diminish the pressure on internal and external borrowing (Globan & Matosec, 2016). Pyeman et al (2014) and Bittencourt (2015) support the argument that higher economic growth reduces the external indebtedness of a country.…”

Section: Discussion Of Resultsmentioning

confidence: 60%

“…Greenidge et al (2010) analyzed the factors affecting external debt in Caribbean Community using co-integration test and dynamic ordinary least squares (OLS) and the result implies that export and real effective exchange rate (REER) were found to be negatively correlated with external debt. Pyeman et al (2014) analyzed determinants of external debt in Malaysia and they found that GDP, foreign direct investment (FDI), and export were the important factors that influence foreign debt. Eaton and Gersovitz (1981) have found economic factors to be important determinants of debt, finding the demand for borrowing to be positively related to income variability, ratio of imports to GDP, and initial income while in a closely related study by Hajivassiliou (1987), covering 79 developing countries for the period 1970 to 1982, found the determinants of indebtedness to include total debt service and interest rate shocks in addition to growth of GDP per capita, import ratio, and export ratio.…”

Section: Review Of Related Literaturementioning

confidence: 99%

Section: Review Of Related Literaturementioning

confidence: 99%

See 2 more Smart Citations

Determinants of External Indebtedness in Heavily Indebted Poor Countries: What Macroeconomic and Socio-Economic Factors Matter?

Azolibe

2020

The American Economist

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This study specifically examined whether macroeconomic and socio-economic factors such as corruption, foreign aid, government expenditure, external reserve, population growth, economic growth, and unemployment rate matter in increasing or reducing the level of external indebtedness in heavily indebted poor countries (HIPCs). Both static panel data and panel fully modified ordinary least squares (OLS) estimation techniques were employed. Using panel data set of all the 39 HIPCs covering period of 1996 to 2018, we found out that the factors that matter in increasing their external indebtedness are high rate of corruption that leads to mismanagement of public funds, high dependency on foreign aids, increase in government expenditure, population growth, and unemployment rate. However, external reserve and gross domestic product (GDP) has a reducing effect on their external indebtedness. In terms of causal relationship, only corruption, population growth, and GDP have a causal relationship with external debt, while other variables exhibited a zero causal relationship with external debt. JEL Classifications: F34, E6, E24

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Section: Discussion Of Resultsmentioning

confidence: 60%

Section: Review Of Related Literaturementioning

confidence: 99%

Section: Review Of Related Literaturementioning

confidence: 99%

See 1 more Smart Citation

Determinants of External Indebtedness in Heavily Indebted Poor Countries: What Macroeconomic and Socio-Economic Factors Matter?

Azolibe

2020

The American Economist

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“…The Granger causality test reveals the existence of a short-run causality linkage between all debt measures and economic growth in the short-run. Pyeman, Noor, Mohamad and Yahya (2014) Reinhart and Rogoff (2009, pp. 23 -24), debt thresholds of emerging market in the time of default were averaging from 41% to 60% of the GNP.…”

Section: Introductionmentioning

confidence: 99%

Macroeconomics Determinants of External Debt in Malaysia

Lau¹,

Lee²,

Arip³

2015

IJoES

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“…The authors' outcomes show that the two economic globalization indicators increase the external debt of the oil and gas importing countries while decrease the external debt in the other 12 countries. Pyeman et al (2016) investigate the factors affecting the government's external debt in Malaysia for the period from 1972 to 2012. The authors use the time-series regressions and highlight that the economic globalization indicators (FDI and exports) affect Malaysia's external debt.…”

Section: Literature Reviewmentioning

confidence: 99%

Economic globalization and public debt in Sub‐Saharan Africa

Bataka

2021

Int. J Fin Econ

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Using data on Sub-Saharan African countries and over the period from 1980 to 2017, this study empirically investigates the effects of economic globalization on public debt. By disentangling between the de jure and de facto aspects, the study uses second-generation panel data tests to diagnose the cross-sectional dependence, unit root and cointegration. The cross-sectional error correction model with the estimation by dynamic common correlated effect technique, is used. We find that economic globalization as a whole increases the public debt in the short run while decreases it in the long run. For its dimensions, we show that financial globalization increases the public debt in the short and long run, while trade globalization increases the public debt in the short run but decreases it in the long run. Consideration of the de jure and de facto aspects of economic globalization shows that the de jure economic globalization does not influence government debt while its trade dimension reduces the short-run public debt and its financial dimension increases the long-run public debt. The de facto economic globalization and its dimensions increase public debt in the short run, while in the long run only the de facto trade globalization belittles the public debt.

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Factors Affecting External Debt in Malaysia: An Empirical Investigation

Cited by 8 publications

References 5 publications

Determinants of External Indebtedness in Heavily Indebted Poor Countries: What Macroeconomic and Socio-Economic Factors Matter?

Determinants of External Indebtedness in Heavily Indebted Poor Countries: What Macroeconomic and Socio-Economic Factors Matter?

Macroeconomics Determinants of External Debt in Malaysia

Economic globalization and public debt in Sub‐Saharan Africa

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