EXTERNAL DEBT, INSTITUTIONAL QUALITY AND ECONOMIC GROWTH

  • Siti Nurazira Mohd Daud School of Economics, Finance and Banking, University Utara Malaysia
Keywords: External debt, Economic growth, Institutional quality, Emerging economies

Abstract

This paper addresses the gap in the literature by investigating the role of the institutional quality in the nexus of external debt and economic growth. By employing a dynamic panel data analysis, we found that the institutional quality plays some role in complementing the effect of external debt on a country’s economic growth. We also found that the negative effect of external debt and a country’s economic growth monotonically increases with the level of institutional indicator, which implies the possibility of debt overhang may still happen in economies endowed with good institutions, but for higher values of debt.

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Published
2020-06-30
How to Cite
Mohd Daud, S. N. (2020). EXTERNAL DEBT, INSTITUTIONAL QUALITY AND ECONOMIC GROWTH. Buletin Ekonomi Moneter Dan Perbankan, 23(2), 221-238. https://doi.org/10.21098/bemp.v23i2.1173
Section
Articles