Nexus of Foreign debt, Poverty and Economic Growth in Selected Countries of South Asia
Keywords:
Economic Growth, Foreign Debt, Poverty, Panel Ardl, South Asian CountriesAbstract
This study examines the nexus of foreign debt, poverty, and economic growth by using the panel data of eight South Asian countries from 1990 to 2021. For data analysis, panel unit root tests, panel Autoregressive Distributed Lag (ARDL) model, and granger causality tests are applied. Economic growth is the explained variable whereas labor, capital, human capital, foreign debt, poverty, industry value-added, and inflation rate are used as explanatory variables. The ARDL exhibits that the labor, capital, human capital, industry value-added, and inflation rate are positively related to the economic growth while the foreign debt and poverty are negatively related to the economic growth. Keeping in a view the results of the study, it is concluded that foreign debt is a burden that impedes rather than promotes South Asia’s economic growth so these countries need a due considerations to reduce the poverty level and to have efficient use of foreign debt for the undisrupted economic growth.
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