Foreign Aid, FDI and Economic Growth in South-East Asia and South Asia

2020 ◽  
pp. 097215091989095
Author(s):  
D. Tripati Rao ◽  
Narayan Sethi ◽  
Devi Prasad Dash ◽  
Padmaja Bhujabal
Keyword(s):  
Economic Growth ◽  
Private Sector ◽  
East Asia ◽  
Foreign Aid ◽  
South Asia ◽  
Low Income ◽  
Trade Openness ◽  
Financial Assistance ◽  
South East Asia ◽  
Domestic Investment

We examine the interrelationship among foreign aid, foreign direct investment (FDI) and economic growth in South-East Asia (SEA) and South Asia (SA) during 1980–2016. The findings from alternative empirical estimations suggest that while foreign aid is negatively associated with FDI as well as growth, FDI positively influences growth. Further, governmental financial assistance to private sector for domestic investment turns out to be important in all empirical estimations insofar as positively associated with FDI flows as well as growth. We, therefore, infer that low-income SEA and SA economies should focus on channelizing governmental financial assistance to private sector for domestic investment, macroeconomic stabilization, trade openness, and efficient utilization of aid flows, in order to attract, absorb and reap the benefits of complementing FDI flows and sustaining higher economic growth.

Has the Internet increased FDI, economic growth, and trade? Evidence from Asian economies

2021 ◽  
pp. 026666692199974
Author(s):  
Zi Hui Yin ◽  
Chang Hwan Choi
Keyword(s):  
Economic Growth ◽  
East Asia ◽  
South Asia ◽  
Internet Use ◽  
The Internet ◽  
Economic Factors ◽  
Vector Autoregressive ◽  
Western Asia ◽  
Asian Economies ◽  
Transaction Efficiency

This study examines the causal relationship between the Internet and economic factors in Asian economies between 1997 and 2017. The economic factors consist of gross domestic product (GDP), foreign direct investment (FDI), imports, and exports. A comparative analysis of East, South, and Western Asia was conducted using a panel vector autoregressive model. The findings show bidirectional causality between FDI and Internet use in South Asia, unidirectional causality from Internet use to FDI in East Asia, and unidirectional causality from FDI to Internet use in Western Asia. Moreover, the findings indicate unidirectional causality from exports to Internet use in East Asia and unidirectional causality from Internet use to exports in South Asia, but no impact in Western Asia. Finally, the results show unidirectional causality from Internet use to GDP in Western Asia. As these results suggest that Internet use has boosted economic performance in Asia, policy makers in the region should improve Internet use with a focus on economic growth, improving transaction efficiency, and facilitating foreign investment.

Status and Prospects of Economic Development in East Asia

2014 ◽  
pp. 42-52
Author(s):  
M. Potapov
Keyword(s):  
Economic Growth ◽  
East Asia ◽  
Industrial Development ◽  
Free Trade Area ◽  
Chinese Economy ◽  
Domestic Investment ◽  
Trade Area ◽  
Structural Problems ◽  
East Asia Region ◽  
Post Industrial

The East Asia region had survived the global economic crisis of 2008–2009. However, the general slowdown in the region indicates many structural problems. The Chinese economy actively switches to the domestic market, giving priority to domestic investment and consumer demand in the maintenance of the economic growth. The development of integration processes in East Asia leaves open the question of the formation of a region-wide free trade area. East Asia is capable to retain the role of economic growth locomotive, moving towards the level of post-industrial development.

scholarly journals Foreign aid on economic growth in Africa: A comparison of low and middle-income countries

2015 ◽  
Vol 18 (4) ◽  
pp. 449-462 ◽  
Author(s):  
Aye Mengistu Alemu ◽  
Jin-Sang Lee
Keyword(s):  
Economic Growth ◽  
Foreign Aid ◽  
Low Income ◽  
Empirical Studies ◽  
Critical Role ◽  
Generalized Method Of Moments ◽  
African Countries ◽  
Middle Income ◽  
Middle Income Countries ◽  
Theoretical Hypothesis

Previous empirical studies on the effects of foreign aid on economic growth have generated mixed results that make it difficult to draw policy recommendations. The main reason for such mixed results is the choice of a single aggregate list of countries, regardless of the disparities in levels of development. This study therefore fills the development gap by disaggregating the African data into a panel of 20 middle- income and 19 low- income African countries over a period of 15 years between 1995 and 2010, and employing a dynamic generalized method of moments (GMM) model to address the dynamic nature of economic growth as well as the problems of endogeneity. The results of this study support the theoretical hypothesis that a positive relationship between aid and GDP growth exists, but only for low-income African countries, not middle-income ones. On the other hand, the study reveals that middle- income African countries tend to experience a greater impact on their economic growth from foreign direct investment (FDI) and natural resources revenues, mainly oil exports. This implies that the frequent criticism that foreign aid has not contributed to economic growth is flawed, at least in the case of low-income African countries. In fact, foreign aid has played a critical role in stimulating economic growth in such countries through supplementing domestic sources of finance such as savings, thus increasing the amount of investment and capital stock in them.

scholarly journals AID AND GROWTH IN BANGLADESH: A REASSESSMENT

2018 ◽  
pp. 422-440
Author(s):  
Sharif Hossain ◽  
Rajarshi Mitra ◽  
Thasinul Abedin
Keyword(s):  
Economic Growth ◽  
Foreign Aid ◽  
Inflation Rate ◽  
Government Expenditure ◽  
Real Income ◽  
Domestic Investment ◽  
Real Gdp ◽  
Long Run ◽  
Short Run ◽  
Per Capita

Although the amount of foreign aid received by Bangladesh as a share of GDP has declined over the years, Bangladesh remains one of the heavily aiddependent countries in Asia. The results of most empirical studies that have examined the effectiveness of foreign aid or other forms of development assistance for economic growth have varied considerably depending on the econometric methodology used and the period of study. As the debate and controversy over aid-effectiveness for economic growth continue to grow, this paper reinvestigates the short-run and long-run effects of foreign aid received on percapita real income of Bangladesh over the period 1972–2015. A vector error correction model is estimated. The results indicate lack of any significant short-run and long-run relation between foreign aid and per-capita real income. Results further indicate short-run unidirectional causalities from per-capita real GDP to domestic investment (in proportion to GDP), from government expenditure (in proportion to GDP) to inflation rate, from inflation rate to domestic investment (in proportion to GDP), and from domestic investment to foreign aid (as percentages of GDP). Short-run bidirectional causality is observed between per-capita electricity consumption and per-capita real GDP, and between per-capita real GDP and government expenditure (in proportion to GDP).

South East Asia in Conditions of World Financial and Econommic Crisis

2010 ◽  
pp. 38-46
Author(s):  
E. Kanaev ◽  
A. Kurilko
Keyword(s):  
Economic Growth ◽  
Financial Crisis ◽  
East Asia ◽  
South East Asia ◽  
Structural Reforms ◽  
Domestic Consumption ◽  
Communication Partners ◽  
Detailed Specification ◽  
Asean Countries

The 1997–1998 financial crisis brought the issue of necessity to implement deep structural reforms to the agenda in South-East Asia countries. Domestic consumption encouragement, increase of cooperation between different countries' real sectors of economy and strengthening the role of the ASEAN countries in both anti-crisis arrangements and arriving at consensus on interaction with communication partners became focus areas. The detailed specification of measures assumed by particular countries of the region to mitigate crisis effects, stabilize economy and formulate a strategy of economic growth is presented in the article.

Modelling the Nexus Between Foreign Aid and Economic Growth: A Case of Afghanistan and Egypt

2021 ◽  
Vol 39 (2) ◽  
Author(s):  
Muhammed Ashiq Villanthenkodath ◽  
Ubaid Mushtaq
Keyword(s):  
Economic Growth ◽  
Foreign Aid ◽  
Time Series Data ◽  
Trade Openness ◽  
Political Stability ◽  
Series Data ◽  
Long Run ◽  
Short Run ◽  
Annual Time Series ◽  
And Control

This paper tries to explore the existence of a long-run relationship between foreign aid and economic growth by using the data from the two highest foreign aid recipient countries. Using the annual time series data from 1965 to 2017 this study uses several econometric models such as Johansen and Juselius cointegration, Granger causality and vector auto regression to establish the long and short-run relationships among foreign aid inflows and economic growth while also considering financial development and trade openness from both the countries. The empirical results suggest that no long-run relationship exists among foreign aid inflows and economic growth for both the countries. However, unidirectional causality running from foreign aid to economic growth is indicative in both countries. Therefore, the findings in this paper support the adequate need for foreign aid for effective economic growth amid an upright policy environment, related issues of conditionality and political stability. Our results are robust to independent, and control variables and estimation techniques are also on par with robustness.

Does Financial Liberalization and Trade Openness Promote Growth in South Asia?

2010 ◽  
pp. 101-132
Author(s):  
Muhammad Arshad Kahn
Keyword(s):  
Economic Growth ◽  
Sri Lanka ◽  
Trade Liberalization ◽  
Inflation Rate ◽  
Financial Liberalization ◽  
Trade Openness ◽  
Real Output ◽  
Domestic Investment ◽  
Long Run ◽  
Short Run

This chapter examines the hypotheses that trade liberalization and financial liberalization jointly enhances economic growth in the four South Asian countries including Bangladesh, India, Pakistan and Sri Lanka for the period 1970-2007 using bounds testing approach to cointegration. The results suggest that in the long-run except for Bangladesh, financial development plays no role in promoting economic growth in these countries. Furthermore, the results suggest that trade openness plays a significant role in promoting economic growth in Bangladesh and India, while exerts negative effect on Pakistan and no effect on Sri Lanka. The share of domestic investment influences real output significantly in Bangladesh, India and Pakistan. In the long- as well as short-run two-way causality between real output, trade openness, share of investment and inflation rate exists for the case of Bangladesh and India. For the case of India two-way causality between finance and growth exists in the short-run. For the case of Pakistan, there is an evidence of long-run causality between real output, finance, trade openness, share of investment and inflation rate. However, in the short-run, two-way causality between real output, trade openness and share of investment is existed and one-way causality between inflation rate, trade openness and share of investment is also observed. No evidence of short-run causality between finance and growth and vice versa for Pakistan has been seen. Finally, for Sri Lanka, an evidence of long-run causality between real output, finance, trade openness and investment share has been found. In the short-run one-way causality between finance-growth, trade-finance, trade-growth and trade-investment has been obtained. These mixed results suggest that the authorities may focuses more and more on the trade liberalization. In addition, there is a need to further deepen the banking and stock markets and provide investment friendly environment to enhance domestic investment which, in turn, promotes economic growth.

Malacca Portuguese Creole

2019 ◽  
pp. 1-10
Author(s):  
Stefanie Pillai ◽  
Alan N. Baxter ◽  
Wen-Yi Soh
Keyword(s):  
East Asia ◽  
South Asia ◽  
East Timor ◽  
The Other ◽  
South East Asia

Malacca Portuguese Creole (MPC) (ISO 639-3; code: mcm), popularly known as Malacca Portuguese or locally as (Papiá) Cristang, belongs to the group of Portuguese-lexified creoles of (South)east Asia, which includes the extinct varieties of Batavia/Tugu (Maurer 2013) and Bidau, East Timor (Baxter 1990), and the moribund variety of Macau (Baxter 2009). MPC has its origins in the Portuguese presence in Malacca, and like the other creoles in this subset, it is genetically related to the Portuguese Creoles of South Asia (Holm 1988, Cardoso, Baxter & Nunes 2012).

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