The relationship between external debt and economic growth: empirical evidence from Ukraine and other emerging economies

  • Received March 3, 2018;
    Accepted April 3, 2018;
    Published April 6, 2018
  • Author(s)
    Inna Shkolnyk
    ORCID Researcher ID ,
    Viktoriia Koilo
    ORCID Researcher ID
  • DOI
    http://dx.doi.org/10.21511/imfi.15(1).2018.32
  • Article Info
    Volume 15 2018, Issue #1, pp. 387-400
  • TO CITE АНОТАЦІЯ
  • Cited by
    34 articles
  • 2530 Views
  • 1293 Downloads

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

The article examines the relationship between external debt and economic growth in emerging economies for the period 2006-2016. The authors used different econometric tools, e.g., ADL model and correlation analysis. The regression results showed that the original values had no significant impact on the estimation of the parameters. Thus, there was made an assumption that emerging economies have a non-linear impact on macroeconomic parameters, including external debt that has a non-linear type of influence on economic growth. The authors established that high level of external debt, in conjunction with macroeconomic instability, impedes economic growth in such countries. The regression model also showed that there is a critical level of debt burden for emerging economies, where the marginal impact of external debt on economic growth becomes negative.
The results of the study highlighted the significance of the problem of effective public debt management strategy implementation in Ukraine. This issue is predetermined by the appropriate organizational support. The study recommends improving a public external debt management model. In this paper, the authors proposed a new structure with the participation of new element – independent agencies. The unified external debt management system should integrate all state institutions and executive power structures in this area.

view full abstract hide full abstract
    • Figure 1. Gini index growth rates in emerging economies (2015 compared with 2005)
    • Figure 2. Annual growth rates of GDP and total debt service on external debt in emerging economies, 2005−2016
    • Figure 3. Matrix of correlation of present value of external debt per capita and GDP per capita in emerging economies, 2016
    • Figure 4. The dynamics of the payments on public domestic debt, payments on the public external debt and the ratio of payment on public debt to GDP in Ukraine, 2006‒2016
    • Figure 5. Institutional model of the public external debt management
    • Table 1. Overview of model
    • Table 2. ANOVA of model
    • Table 3. T-test and estimation of regression coefficients for model
    • Table 4. Correlation matrix
    • Table 5. Institutional models of the external public debt management
Related Articles

  • Impact on poverty and income inequality in Malaysia’s economic growth

    Rabiul IslamORCID Researcher ID, Ahmad Bashawir Abdul Ghani , Irwanshah Zainal Abidin , Jeya Malar Rayaiappan doi: http://dx.doi.org/10.21511/ppm.15(1).2017.05
    Problems and Perspectives in Management Volume 15, 2017         Issue #1         pp. 55-62 Views: 12038 Downloads: 5746 TO CITE АНОТАЦІЯ

    Poverty and income inequality are extreme issues that still exist in Malaysia. Any rise in poverty and income inequality definitely affect economic growth. There are many great efforts taken by the government of Malaysia to eradicate poverty and to reduce the gap of income inequality which occurs since 1970’s. The incidence of poverty and income inequality is higher in rural areas compared to urban areas. This paper is mainly to study the level of poverty and income inequality in Malaysia together with government intervention to develop Malaysia’s economic growth. The research is focused among the working people at Ipoh, Perak. In this paper, questionnaire forms are being distributed to get information regarding the issue of poverty and income inequality. It also looks into the strategies taken by the government of Malaysia to eradicate poverty and income inequality. Few recommendations are given in terms of education policy, financial aid and assistance from government and non-government organization (NGO) to upgrade the standard and quality of living among the poor and lower-income group of people.

  • Impact of inflation on economic growth: evidence from Nigeria

    Anthony Olugbenga AdaramolaORCID , Oluwabunmi Dada doi: http://dx.doi.org/10.21511/imfi.17(2).2020.01
    Investment Management and Financial Innovations Volume 17, 2020         Issue #2         pp. 1-13 Views: 9348 Downloads: 5625 TO CITE АНОТАЦІЯ

    In an attempt to examine the influence of inflation on the growth prospects of the Nigerian economy, the study employs the autoregressive distributed lag on the selected variables, i.e. real gross domestic product (GDP), inflation rate, interest rate, exchange rate, degree of economy`s openness, money supply, and government consumption expenditures for the period 1980–2018. The study findings indicate that inflation and real exchange rate exert a significant negative impact on economic growth, while interest rate and money supply indicate a positive and significant impact on economic growth. Other variables in the model depict no influence on the economic growth of Nigeria. The causality result shows the unidirectional relationships between interest rate, exchange rate, government consumption expenditures and gross domestic product. However, inflation and the degree of openness show no causal relationship with gross domestic product. As a result, the study recommends that a more pragmatic effort is needed by the monetary authorities to target the inflation vigorously to prevent its adverse effect by ensuring a tolerable rate that would stimulate the economic growth of Nigeria.

  • Formalization of the impact of imbalances in the movement of financial resources on economic growth of countries in Central and Eastern Europe

    Serhiy KozmenkoORCID , Maxim KorneyevORCID Researcher ID doi: http://dx.doi.org/10.21511/afc.01(1).2017.06
    Accounting and Financial Control Volume 1, 2017         Issue #1         pp. 48-58 Views: 7973 Downloads: 1381 TO CITE

    The article deals with the impact of financialization on economic growth in countries of Central and Eastern Europe. It determinesthe impact of imbalances in the movement of financial resources caused by financialization on economic growth of these countries. It proves that the implementation of measures aimed at increasing the openness of the economy and maintaining solvent demand have a positive impact on economic growth of the surveyed countries in the long run. It also proves the importance of developing a set of measures of strategic nature regulating imbalances in the movement of financial resources caused by financialization.

Download Preview
Close
Investment Management and Financial Innovations
Investment Management and Financial Innovations