GNP Growth and Foreign Indebtedness in Middle-Income Developing Countries

Afxentiou, Panos

doi:10.1080/10168739300080022

Cited by 18 publications

(13 citation statements)

References 8 publications

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“…His sample contained countries which went through debt rescheduling and suffered from a slow-down in productivity growth in the 1980s, yet according to Cohen the observed productivity slow-down did not appear to be explained by indebtedness. *(16) Our results are also similar to those of Afxentiou (1993) who restricted his samp le to SIMICs over a shorter period from 1971 to 1988 but did not investigate the effects of reverse causality. What does emerge from our results is the difficulty of the sampled developing countries to expand their exports.…”

Section: Discussionsupporting

confidence: 84%

“…*(9) For the first set of hypotheses with regard to the negative impact of foreign loans and the ensuing debt overhand on the growth of productivity, we test for causality by employing four measures of indebtedness to GNP growth per capita for every debtor country in each of the four World Bank categories. Our investigation goes further than the work of Afxentiou (1993) in terms of sample size (55 countries vs. 20 SIMICs), in terms of the period covered (20 years vs. 18 years), and in our use of different measures of indebtedness that emphasize mostly per capita ratios of indebtedness. *(10) The selected measures of indebtedness, symbolized by 1999 SAJE v67 (1) p100 In testing for the separate influence of each of these measures we do not postulate that the measures are necessarily the only ones that may impact on per capita GNP growth.…”

Section: Statistical Properties Of Data and Causality Resultsmentioning

confidence: 94%

“…The indebtedness ratios used in Afxentiou [1993] were (a) total debt service to exports of goods and services, (b) total debt services to GNP, (c) total interest payments to exports of goods and services, and (d) total interest payments to GNP. We have carried out tests using these four ratios but, owing to the similarity of these results to those reported, they are omitted from the paper but are available on request from the authors.…”

mentioning

confidence: 99%

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The Foreign Indebtedness of Moderately and Severely‐Indebted Developing Countries

Afxentiou

Serletis

1999

South African J Economics

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Section: Discussionsupporting

confidence: 84%

Section: Statistical Properties Of Data and Causality Resultsmentioning

confidence: 94%

mentioning

confidence: 99%

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The Foreign Indebtedness of Moderately and Severely‐Indebted Developing Countries

Afxentiou

Serletis

1999

South African J Economics

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“…It is worth mentioning that the majority of existing empirical literature report that external debt adversely affects economic growth. Cunningham (1993), Afxentiou (1993), Deshpande (1997), Were (2001), Karagol (2002), Cholifihani (2008), Hameed, et al (2008), reported that the external debt negatively affect the economic growth. Whereas Warner (1992), Cohen (1993), Afxentiou and Serletis (1996) and Patenio and Tan-Curz (2007), concluded that external debt did not affect the economic growth.…”

Section: Literature Reviewmentioning

confidence: 99%

External Debt Accumulation and Its Impact on Economic Growth in Pakistan

Ali¹,

Mustafa²

2022

pdr

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The accumulation of external debt is common phenomenon of the developing countries and it has become a common feature of the fiscal sectors of most of the economies. A country with lower saving rate needs to borrow more to finance the given rate of economic growth. So external debt is obtained to sustain the growth rate of the economy, which is otherwise not feasible with the given domestic resources. Pakistan is one of the developing countries and faces serious debt problems, according to World Bank Report 2000-2001, Pakistan is among the Highly Indebted Countries (HICs); because Pakistan’s present and future debt situation is very grim. According to the World Bank total external debt may be defined as debt owed to non-resident repayable in terms of foreign currency, goods or services. External debt is the composition of long term debt (public and publicly guaranteed debt plus private non guaranteed debt), short term commercial debt and International Monetary Fund (IMF) loans. Prior to early 1970s the external debt of developing countries was primarily small and official phenomenon, the majority of creditors being foreign governments and international financial institutions offer loan for development project [Todaro (1988)]. At the same time current account deficit was common which increased the external indebtedness of the developing countries, until when Mexico, despite an oil exporter, declared in august, 1992 that it could not services its debt ever since, the issue of external debt and its servicing has assumed critical importance and introduced the debt crises debate [Were (2001)].

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“…Sawada (1994) finds that HICs' debt is more than their expected present value of future returns; therefore, they have to face the debt overhang problem. However, Afxentiou and Serletis (1996), fail to find a causal relationship between debt and GDP in a sample of 55 developing countries and concluded that debt overhang is rather an exaggeration. Mahdavi (2004) has analysed the impacts of debt servicing on public expenditure composition and finds that debt burden adversely affects 'capital expenditure' and it invariably changes the spending composition in favour of payments of interest on debt and displaces the share of subsidy and transfers and non-wage goods and services.…”

Section: Literature Reviewmentioning

confidence: 99%

Public debt and pro-poor economic growth evidence from South Asian countries

Akram¹

2016

Economic Research-Ekonomska Istraživanja

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Over the years, most developing countries have failed to collect enough revenues to finance their budgets. As a result, they face the problem of twin deficits and are relying on public external and domestic debt to finance their developmental activities. NGOs and anti-globalisation movements have propagated the view that instead of reducing poverty public debt has increased the miseries of the poor. The current study examines the consequences of public debt for economic growth and poverty regarding selected South Asian countries, i.e., Bangladesh, India, Pakistan and Sri Lanka, for the period 1975-2010. It develops an empirical model that incorporates the role of public debt into growth equations and the model is extended to incorporate the effects of debt on poverty. The model is estimated by using standard panel data estimation methodologies. The results shows that although public debt has a negative impact on economic growth, neither public external debt nor external debt servicing has a significant relationship with income inequality, suggesting that public external debt is as good/bad for poor as it is for rich. However, domestic debt has a positive relationship with economic growth and a negative relationship with the GINI coefficient, indicating that domestic debt is pro-poor.

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GNP Growth and Foreign Indebtedness in Middle-Income Developing Countries

Cited by 18 publications

References 8 publications

The Foreign Indebtedness of Moderately and Severely‐Indebted Developing Countries

The Foreign Indebtedness of Moderately and Severely‐Indebted Developing Countries

External Debt Accumulation and Its Impact on Economic Growth in Pakistan

Public debt and pro-poor economic growth evidence from South Asian countries

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