WHICH FORM OF FOREIGN CAPITAL INFLOWS ENHANCE ECONOMIC GROWTH? EMPIRICAL EVIDENCE IN SUB-SAHARAN AFRICA
Journal Title: Asian Economic and Financial Review - Year 2016, Vol 6, Issue 10
Abstract
Empirically, results from time series and cross country studies have identified foreign capital inflows to play a pivotal role in the growth process of host countries. The goal of this paper is to examine the impact of three of the four forms of foreign capital inflows (which include foreign aid, foreign direct investment and personal remittances) on economic growth in SSA. This goal was achieved by using a panel data from 1990-2010 and the newly established pooled mean group (PMG) estimator for dynamic heterogeneous panels. The results of the study indicate that all the three forms of foreign capital inflows have positive and significant impacts on economic growth in the long run. However, personal remittances was the only short run driver of growth in SSA. The study recommends the design and implementation of good fiscal, monetary and trade policies to complement the flow of foreign aid to the country for the realization of its full impact on growth. Furthermore, the study recommends SSA countries to build strong and well-functioning domestic institutions to unlock the potential for remittances to strongly contribute to growth.
Authors and Affiliations
Frank Adusah-Poku| Graduate School of Economics, Kobe University, 2-1 Rokkodai-cho, Nada-ku, Hyogo Prefecture, Japan
Keywords
Related Articles
- EP ID EP2304
- DOI -
- Views 459
- Downloads 42
COST AND PROFIT EFFICIENCY AND MANAGEMENT BEHAVIOUR OF COMMERCIAL BANKS (EVIDENCE FROM TANZANIA)
Using non-parametric technique (the Data Envelopment Analysis - DEA) for data from 1998 to 2011, we investigate the cost and profit efficiency and management behaviour of 25 Tanzanian commercial banks. We examine the inf...
PREDICTIVE ANALYTICS IN CAPITAL MARKETS
The paper is a practical application of the random walk model on stock price behaviour. The academic literature has moved beyond this random walk approach and the recent focus is now much more on how to improve the forec...
Trade Liberalization, Poverty and Inequality Nexus: A Case Study of India
The paper attempted to see the relationship between trade liberalization and poverty andinequality in India. For trade liberalization, volume of trade as ratio of GDP, head countratio for poverty and Gini-coefficient has...
THE IMPACT OF TRADER BEHAVIOR ON OPTIONS PRICE VOLATILITY
Because relatively few studies have examined the behavior among different types of traders in the options market, this investigation conducts an empirical study examining the impact of trader type on price volatility in...
EMPIRICAL TESTING OF EXCHANGE RATE AND INTEREST RATE TRANSMISSION CHANNELS IN CHINA
This paper examines the exchange rate and interest rate volatility transmission channels in China by applying Granger causality, Johansen cointegration, and the VAR model. Empirical results taken from the exchange rate c...