Work

Foreign capital and growth nexus revisited: empirical evidence from South Asian countries

Year: 2021

Type: article

Abstract: This paper examines the effectiveness of foreign capital in the form of FDI, remittances, and foreign aid in improving economic growth prospects in the South-Asian region. A sample of 8South Asian countries for the period 1990–2017 is being considered for this study. The study uses various econometrics tools such as the Johansen-Fisher Panel cointegration test, Panel FMOLS, and PDOLS to ascertain the long-run and short-run dynamics among the variables under consideration. We found that the long-run and short-run relationship exists among foreign aid, economic growth with other macroeconomic variables. Further, using the Granger causality framework, we found that unidirectional causality exists between foreign aid to economic growth, FDI inflows to economic growth, and there is no short-run causality between remittances and economic growth. On the other hand, we confirmed that the existence of long-run causality between foreign aid to economic growth and FDI to economic growth.

Source: Transnational Corporation Review

DOI: 10.1080/19186444.2020.1862602

Authors: Nihar Ranjan Jena, Narayan Sethi

Institutions: University of Mumbai, National Institute of Technology Rourkela

Language: English

Topic: International Development and Aid

Subfield: Development

Field: Social Sciences

Domain: Social Sciences

SDGs: Decent work and economic growth, Partnerships for the goals

Open Access status: hybrid

Estimated APC paid: $1,400