Analysis of the Relationship Between External Debt and Economic Growth in Central Asian Countries

Yıl 2024, Cilt: 7 Sayı: 1, 1 – 13, 31.07.2024

Aziza Syzdykova

https://doi.org/10.55065/intraders.1458768

Öz

In the literature, studies on the relationship between external debt and economic growth are generally shaped around general theoretical and empirical frameworks. This study aims to shed light on the special conditions of the relationship in this region by addressing the external debt structure and economic growth performance of Central Asian countries. Although Central Asian countries entered the independence process with zero debt in 1991, they have received significant amounts of foreign debt and aid to date. The aim of the study is to empirically analyze the relationship between external debt and economic growth in Central Asian countries, based on available statistical data. In the application part of the study, the relationship between the variables was examined with the Westerlund (2007) cointegration test using data from 1995-2022 in Central Asian countries. Panel FMOLS method was used to estimate long-term coefficients between variables. According to the results, the long-term regression coefficient between external debt and economic growth in Central Asian countries is -0.1493. This means that when the external debt stock increases by 1% in these countries, economic growth decreases by approximately 0.15%. When evaluated on a country basis, the relationship between external debt and economic growth was negative in Kazakhstan, Kyrgyzstan and Tajikistan, while it was found positive in Uzbekistan. The results found for Turkmenistan are statistically insignificant. The findings are expected to provide guidance for economic policy makers, academics and international stakeholders.

Anahtar Kelimeler

Central Asian countries, developing countries, external debt, economic growth, panel cointegration

Kaynakça

• Abate, C. A. (2023). Is the Nexus of Public Debt and Economic Growth in Ethiopia Symmetric? Cogent Economics & Finance, 11(2), 2231226. DOI: 10.1080/23322039.2023.2231226
• Al Khatib, A. M. G., Alshaib, B. M., & Kanaan, A. M. (2023). The Interaction Between Financial Development and Economic Growth: A Novel Application of Transfer Entropy and Nonlinear Approach in Algeria. SAGE Open, 13(4), 21582440231217871. https://doi.org/10.1177/2158244023121787
• Ale, S. A., Islam, M. S., & Nessa, H. T. (2023). Does External Debt Affect Economic Growth: Evidence from South Asian Countries. International Journal of Economics and Financial Issues, 13(1), 83. https://doi.org/10.32479/ijefi.13527
• Azretbergenova, G., Zhetibayev, Z., & Yessymkhanova, Z. (2022). Relationship between external debt and economic growth: panel data analysis for BRIC countries. Journal of Economic Research & Business Administration, 141(3), 3-11. https://doi.org/10.26577/be.2022.v141.i3.01
• Eberhardt, M., & Presbitero, A. F. (2015). Public debt and growth: Heterogeneity and non-linearity. Journal of International Economics, 97(1), 45-58. https://doi.org/10.1016/j.jinteco.2015.04.005
• Gurung, A., & Rijal, D. P. (2023). External Debt and Internal Debt Impact on the Growth of the Nepalese Economy. Open Journal for Research in Economics, 6(1). https://doi.org/10.32591/coas.ojre.0601.02013g
• Heimberger, P. (2023). Do higher public debt levels reduce economic growth? Journal of Economic Surveys, 37(4), 1061-1089. https://doi.org/10.1111/joes.12536
• Hwang, J. T., Chung, C. P., & Wang, C. H. (2010). Debt overhang, financial sector development and economic growth. Hitotsubashi Journal of Economics, 13-30.
• Ikonen, P. (2017). Financial depth, debt, and growth. Scientific monographs, No. E:51, ISBN 978-952-323-161-0, Bank of Finland, Helsinki, https://nbn-resolving.de/urn:nbn:fi:bof-201705171300
• Kamaci, A. (2016). Dış borçların ekonomik büyüme ve enflasyon üzerine etkileri: panel eşbütünleşme ve panel nedensellik analizi. Uluslararası Kültürel ve Sosyal Araştırmalar Dergisi, 2(Special Issue 1), 165-175. https://dergipark.org.tr/tr/download/article-file/253530
• Karadam, D. Y. (2018). An investigation of nonlinear effects of debt on growth. The Journal of Economic Asymmetries, 18, e00097.
• Kharusi, S. A., & Ada, M. S. (2018). External debt and economic growth: The case of an emerging economy. Journal of economic integration, 33(1), 1141-1157. http://dx.doi.org/10.11130/jei.2018.33.1.1141
• Krugman, P. (1988). Financing vs. forgiving a debt overhang. Journal of development Economics, 29(3), 253-268.
• Nissanke, M., & Ferrarini, B. (2004). Debt dynamics and contingency financing: Theoretical reappraisal of the HIPC initiative. In Debt relief for poor countries (pp. 24-58). London: Palgrave Macmillan UK.
• Pattillo, C. A., Poirson, H., & Ricci, L. A. (2002). External debt and growth. IMF Working Paper, 2002 WP 2/69. https://is.gd/oebXWC
• Pedroni, P. (2001a). Purchasing power parity tests in cointegrated panels. Review of Economics and Statistics, 83(4), 727–731. https://EconPapers.repec.org/RePEc:tpr:restat:v:83:y:2001:i:4:p:727-731
• Pedroni, P. (2001b). Fully modified OLS for heterogeneous cointegrated panels", Baltagi, B.H., Fomby, T.B. and Carter Hill, R. (Ed.) Nonstationary Panels, Panel Cointegration, and Dynamic Panels (Advances in Econometrics, Vol. 15), Emerald Group Publishing Limited, Leeds, pp. 93–130. https://doi.org/10.1016/S0731-9053(00)15004-2
• Pesaran, M. H. (2007). A simple panel unit root test in the presence of cross‐section dependence. Journal of Applied Econometrics, 22(2), 265-312. https://www.jstor.org/stable/25146517
• Presbitero, A. F. (2005). The debt-growth nexus: an empirical analysis. Mimeographed). Downloadable at: http://www. Unicast. it/convegno/open_ economy/Allegati/debtgrowth_presbitero. pdf.
• Siddique, M. A. B., Selvanathan, E. A., & Selvanathan, S. (2015). The impact of external debt on economic growth: empirical evidence from highly indebted poor countries. University of Western Australia, Economics. DOI: 10.1016/j.jpolmod.2016.03.011
• Syzdykova, A. (2018). Orta Asya ülkelerinde enerji tüketimi ve ekonomik büyüme ilişkisi: Panel veri analizi. Afyon Kocatepe Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 20(1), 87-99. DOI NO: 10.5578/jeas.67162
• Westerlund, J. (2008). Panel cointegration tests of the Fisher effect. Journal of Applied Econometrics, 23(2), 193-233. https://doi.org/10.1002/jae.967
• World Bank. URL: http://databank.worldbank.org/ (date of application: 21.12.2023)
• Yamin, I., Al_Kasasbeh, O., Alzghoul, A., & Alsheikh, G. (2023). The Influence of Public Debt on Economic Growth: A Review of Literature. International Journal of Professional Business Review, 8(4), e01772-e01772. https://doi.org/10.26668/businessreview/2023.v8i4.1772
• Zhang, B., Dawood, M., & Al-Asfour, A. (2020). External debt and economic growth: A dynamic panel study of Granger causality in developing countries. The Journal of Asian Finance, Economics and Business, 7(11), 607–617. DOI: 10.13106/jafeb.2020.vol7.no11.607
• Zhu, X., Lin, S., Wang, L., Wu, W., Qin, Q., Zhu, X., … & Qin, Q. (2018). Debt and economic growth. A Study of the Turning Point of China’s Debt, 1-13.
• Zuhroh, I., & Pristiva, D. (2022). External Debt and Economic Growth: Evident from South Asian Countries. JEJAK, 15(1), 92-101. https://doi.org/10.15294/jejak.v15i1.34293

Yıl 2024, Cilt: 7 Sayı: 1, 1 – 13, 31.07.2024

Aziza Syzdykova

https://doi.org/10.55065/intraders.1458768

Öz

Kaynakça

• Abate, C. A. (2023). Is the Nexus of Public Debt and Economic Growth in Ethiopia Symmetric? Cogent Economics & Finance, 11(2), 2231226. DOI: 10.1080/23322039.2023.2231226
• Al Khatib, A. M. G., Alshaib, B. M., & Kanaan, A. M. (2023). The Interaction Between Financial Development and Economic Growth: A Novel Application of Transfer Entropy and Nonlinear Approach in Algeria. SAGE Open, 13(4), 21582440231217871. https://doi.org/10.1177/2158244023121787
• Ale, S. A., Islam, M. S., & Nessa, H. T. (2023). Does External Debt Affect Economic Growth: Evidence from South Asian Countries. International Journal of Economics and Financial Issues, 13(1), 83. https://doi.org/10.32479/ijefi.13527
• Azretbergenova, G., Zhetibayev, Z., & Yessymkhanova, Z. (2022). Relationship between external debt and economic growth: panel data analysis for BRIC countries. Journal of Economic Research & Business Administration, 141(3), 3-11. https://doi.org/10.26577/be.2022.v141.i3.01
• Eberhardt, M., & Presbitero, A. F. (2015). Public debt and growth: Heterogeneity and non-linearity. Journal of International Economics, 97(1), 45-58. https://doi.org/10.1016/j.jinteco.2015.04.005
• Gurung, A., & Rijal, D. P. (2023). External Debt and Internal Debt Impact on the Growth of the Nepalese Economy. Open Journal for Research in Economics, 6(1). https://doi.org/10.32591/coas.ojre.0601.02013g
• Heimberger, P. (2023). Do higher public debt levels reduce economic growth? Journal of Economic Surveys, 37(4), 1061-1089. https://doi.org/10.1111/joes.12536
• Hwang, J. T., Chung, C. P., & Wang, C. H. (2010). Debt overhang, financial sector development and economic growth. Hitotsubashi Journal of Economics, 13-30.
• Ikonen, P. (2017). Financial depth, debt, and growth. Scientific monographs, No. E:51, ISBN 978-952-323-161-0, Bank of Finland, Helsinki, https://nbn-resolving.de/urn:nbn:fi:bof-201705171300
• Kamaci, A. (2016). Dış borçların ekonomik büyüme ve enflasyon üzerine etkileri: panel eşbütünleşme ve panel nedensellik analizi. Uluslararası Kültürel ve Sosyal Araştırmalar Dergisi, 2(Special Issue 1), 165-175. https://dergipark.org.tr/tr/download/article-file/253530
• Karadam, D. Y. (2018). An investigation of nonlinear effects of debt on growth. The Journal of Economic Asymmetries, 18, e00097.
• Kharusi, S. A., & Ada, M. S. (2018). External debt and economic growth: The case of an emerging economy. Journal of economic integration, 33(1), 1141-1157. http://dx.doi.org/10.11130/jei.2018.33.1.1141
• Krugman, P. (1988). Financing vs. forgiving a debt overhang. Journal of development Economics, 29(3), 253-268.
• Nissanke, M., & Ferrarini, B. (2004). Debt dynamics and contingency financing: Theoretical reappraisal of the HIPC initiative. In Debt relief for poor countries (pp. 24-58). London: Palgrave Macmillan UK.
• Pattillo, C. A., Poirson, H., & Ricci, L. A. (2002). External debt and growth. IMF Working Paper, 2002 WP 2/69. https://is.gd/oebXWC
• Pedroni, P. (2001a). Purchasing power parity tests in cointegrated panels. Review of Economics and Statistics, 83(4), 727–731. https://EconPapers.repec.org/RePEc:tpr:restat:v:83:y:2001:i:4:p:727-731
• Pedroni, P. (2001b). Fully modified OLS for heterogeneous cointegrated panels", Baltagi, B.H., Fomby, T.B. and Carter Hill, R. (Ed.) Nonstationary Panels, Panel Cointegration, and Dynamic Panels (Advances in Econometrics, Vol. 15), Emerald Group Publishing Limited, Leeds, pp. 93–130. https://doi.org/10.1016/S0731-9053(00)15004-2
• Pesaran, M. H. (2007). A simple panel unit root test in the presence of cross‐section dependence. Journal of Applied Econometrics, 22(2), 265-312. https://www.jstor.org/stable/25146517
• Presbitero, A. F. (2005). The debt-growth nexus: an empirical analysis. Mimeographed). Downloadable at: http://www. Unicast. it/convegno/open_ economy/Allegati/debtgrowth_presbitero. pdf.
• Siddique, M. A. B., Selvanathan, E. A., & Selvanathan, S. (2015). The impact of external debt on economic growth: empirical evidence from highly indebted poor countries. University of Western Australia, Economics. DOI: 10.1016/j.jpolmod.2016.03.011
• Syzdykova, A. (2018). Orta Asya ülkelerinde enerji tüketimi ve ekonomik büyüme ilişkisi: Panel veri analizi. Afyon Kocatepe Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 20(1), 87-99. DOI NO: 10.5578/jeas.67162
• Westerlund, J. (2008). Panel cointegration tests of the Fisher effect. Journal of Applied Econometrics, 23(2), 193-233. https://doi.org/10.1002/jae.967
• World Bank. URL: http://databank.worldbank.org/ (date of application: 21.12.2023)
• Yamin, I., Al_Kasasbeh, O., Alzghoul, A., & Alsheikh, G. (2023). The Influence of Public Debt on Economic Growth: A Review of Literature. International Journal of Professional Business Review, 8(4), e01772-e01772. https://doi.org/10.26668/businessreview/2023.v8i4.1772
• Zhang, B., Dawood, M., & Al-Asfour, A. (2020). External debt and economic growth: A dynamic panel study of Granger causality in developing countries. The Journal of Asian Finance, Economics and Business, 7(11), 607–617. DOI: 10.13106/jafeb.2020.vol7.no11.607
• Zhu, X., Lin, S., Wang, L., Wu, W., Qin, Q., Zhu, X., … & Qin, Q. (2018). Debt and economic growth. A Study of the Turning Point of China’s Debt, 1-13.
• Zuhroh, I., & Pristiva, D. (2022). External Debt and Economic Growth: Evident from South Asian Countries. JEJAK, 15(1), 92-101. https://doi.org/10.15294/jejak.v15i1.34293

Toplam 27 adet kaynakça vardır.

Ayrıntılar

Kaynak Göster

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