Search results

The objective of this study is to explore the dynamic inter-linkage between foreign aid and economic growth in Sri Lanka over the period of 1960–2018.

Both exploratory and inferential data analysis tools have been employed to examine the objective of this study. The exploratory data analysis covered the scatter plots, confidence ellipse with kernel fit. The inferential data analysis included the augmented Dickey–Fuller (ADF) and Phillips–Perron (PP) unit root tests, the autoregressive distributed lag (ARDL) Bounds co-integration technique and the Granger causality test.

The test result of exploratory data analysis indicates that there is a positive relationship between foreign aid and economic growth. The ADF and PP unit root tests results indicate that the variables used in this study are stationary at their 1st difference. The co-integration test result confirms the presence of long-run relationship between foreign aid and economic growth in Sri Lanka. The estimated coefficient of foreign aid in the long-run and the short-run shows that foreign aid has a positive relationship with economic growth in Sri Lanka. The estimated coefficient of error correction term indicates that approximately 26.6% of errors are adjusted each year and further shows that the response variable of economic growth moves towards the long-run equilibrium path. The Granger causality test result shows that foreign aid in short-run Granger causes economic growth in Sri Lanka which means that one-way causality from foreign aid to economic growth is confirmed. Further, the estimated coefficient of error correction term confirms that there is the long-run Granger causal relationship between foreign aid and economic growth in Sri Lanka.

The findings of this study have some important policy implications for the design of efficient policy related to foreign aid and economic growth, the knowledge of which will help follow sustainable foreign aid and growth nexus.

This study contributes to the existing literature by using the newly introduced ARDL Bounds cointegration technique to investigate the dynamic inter-linkage between foreign aid and economic growth in Sri Lanka.

The purpose of this study is to investigate the role of foreign aid in the Western Balkans countries’ economic growth between 2009 and 2021.

This paper uses a panel data approach to examine the effects of foreign aid on economic growth in the region and incorporates a random-effects model to accommodate the unique cross-country variations and time-specific factors, as well as a pooled OLS and fixed-effects model for a comprehensive, comparative analysis.

The in-depth regression analysis shows that foreign aid has not had a significant impact on the economic growth of the region. Further evidence suggests that trade openness exhibited a significant positive correlation with economic growth, while gross capital formation, although positively associated, did not significantly impact it, indicating the complexity of its role in the region’s economies.

The analysis presented in this study has significant practical implications, particularly for policymakers in the Western Balkans. Given the region’s ambitions for European Union membership and the challenges of high unemployment and inflation, understanding the role of foreign aid is crucial.

This research provides a unique contribution to the field of development economics by examining foreign aid effectiveness within the context of a region often overlooked in the literature. The analysis also offers fresh insights into the complex dynamics of foreign aid and its implications for policy and development strategies.

This research explores the intricate dynamics of national interests realised through Japan's official development assistance (ODA) to China. It aims to deepen the understanding of these mechanisms, detailing the extent to which Japan has accomplished its national interests.

The paper applies the role theory and narrative analysis to elucidate Japan's national role conception and its categories of national interests with regards to its ODA policy. It utilises both qualitative and quantitative methods to examine the success rate in achieving Japan's diplomatic objectives and how those interests have manifested over time.

The findings suggest a mixed outcome. Whilst Japan's ODA to China has helped in expanding trade and fostering mutual understanding and cooperation, it has been less successful in promoting democratic governance in China or effectively counterbalancing China's regional power. Hence, the realisation of national interests through ODA is a complex process contingent upon numerous factors.

This study stands out for its multifaceted approach in examining Japan's ODA policy towards China, integrating both quantitative and qualitative methodologies and applying the role theory in the context of international development aid. It fills a significant gap in the literature by analysing the interplay between national interests and foreign aid, providing nuanced insights into the successes and challenges of Japan's pursuit of its diplomatic objectives. The study's findings have important implications for understanding the complexity of international aid dynamics and can inform future policy decisions in the realm of international relations and foreign aid.

This paper analyzes the direct effect of financial development and the mediating impact of financial development through foreign direct investment (FDI), foreign aid and trade on economic growth for all Asian countries.

A fixed-effect model with Driscoll–Kraay panel corrected estimators was employed to find the direct and mediating impact of financial developments on growth for all 47 Asian economies from 1980 to 2020. The bootstrapped panel-quantile regression (BPQR) model is used to check how this effect varies for different income groups of countries.

The results demonstrated that financial development positively impacts countries' economic growth. The interaction effect of financial development with FDI, foreign aid and foreign trade negatively impacts economic growth. The BPQR results showed that FDI and foreign aid help in the growth of lower quantile economies; however, the impact is negative for middle- and upper-income countries. Trade impacts growth positively for all the quantiles of economies.

The results suggest that the Asian economies must continue to provide thrust on the financial development of their own countries to achieve better growth. It also implied that the dependence on external finance is good for low-income countries and not advisable for middle- and upper-income countries.

To the best of the authors’ knowledge, the current study is the first to provide empirical evidence on analyzing both the direct and interaction effect of financial development on economic growth by considering all the Asian economies.

The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-09-2022-0587

The purpose of this paper is to examine key macroeconomic determinants on Cameroon's economic growth from 1970 to 2018.

Data were obtained from the World Development Indicators and applied on time series data econometric techniques. The auto-regressive distributed lag (ARDL) bounds model analyzed the data since the variables had different order of integration.

The results showed long and short runs’ positive and significant connection between economic growth in Cameroon and government expenditure; trade openness, gross capital formation and exchange rate. Human capital development, foreign aid, money supply, inflation and foreign direct investment negatively and significantly affected economic growth in the short and long-runs. Hence, the macroeconomic indicators are not death.

The present research paper has tried to capture the impact of nine macroeconomic determinants on economic growth such as the government expenditure (LNGOVEXP), human capital development (LNHCD), foreign aids (AID), trade openness (LNTOP), foreign direct investment (LNFDI), gross capital formation (INVEST), broad money (LNM2), official exchange rate (LNEXHRATE) and Inflation (LNINFLA). However, these variables have the tendency to affect each other in a unidirectional or bidirectional manner. Further, the present research paper is unable to capture the impact of other macroeconomic variable due to the unavailability of data.

The study recommends that Cameroon should use proper planning and strategic policy interventions to achieve higher sustainable economic growth with human capital development, foreign aid, money supply, foreign direct investment and moderate inflation.

Macroeconomic indicators, if managed well, increase economic growth.

This paper to the best of the researcher's knowledge presents new background information to both policymakers and researchers on the main macroeconomic determinants using econometric analysis.

This study examines the impact of China’s trade, aid and foreign direct investment (FDI) on the economic growth of Africa.

Our study covered 41 countries in Africa, cutting across the western, eastern, central, southern and northern sub-regions. The study adopted the dynamic system generalized method of moments (SGMM), feasible generalized least squares (FGLS) and Dumitrescu–Hurlin Panel Granger causality techniques for estimations.

Overall, FDI, trade and aid from China have a nonlinear relationship with Africa’s economic growth. The findings reveal a key novelty in that the marginal effect on real per capita GDP increases when China’s FDI interacts with the manufacturing sector in Africa. These findings are robust to long-run estimations.

Given that we have examined the short-and long-run symbiotic effects of China’s FDI and Africa’s manufacturing sector and China’s aid and Africa’s manufacturing sector, more studies are warranted in this area, particularly to produce further empirical evidence of these findings. Moreover, future work could focus on investigating the country-specific effects of China’s trade, China’s FDI and China’s aid on real GDP per capita in each African country as our results reflect within-country elasticities.

This study provides new evidence on the impact of China’s trade, aid and FDI on the growth of African economies. To the best of our knowledge, this is the first study to empirically explore the long-run effects of China’s trade, FDI and aid on economic growth in African countries. This study also tests the claim of the displacement of Africa’s manufacturing industry by its Chinese counterparts.

What kinds of support do interstate rivals provide to domestic actors in ongoing civil wars? And how do domestic actors utilize the support they receive? This chapter answers these questions by comparing Iranian and Saudi military and non-military (mediation, foreign aid and religious soft-power promotion) support to the Houthis and to the Government of Yemen (GoY) during the Saada wars (2004–2010) and the internationalized civil war (2015–2018). It also focuses on the processes through which the GoY and the Houthis have utilized this support for their own strategic purposes. This chapter applies a structured, focused comparison methodology and relies on data from a review of both primary and secondary sources complemented by 14 interviews. This chapter finds that there were less external interventions in the conflict in Saada than in the internationalized civil war. During the latter, a broader set of intervention strategies enabled further instrumentalization by domestic actors, which in turn contributed to the protracted nature of the conflict. This chapter contributes to the literature on interstate rivalry and third-party intervention. The framework of analysis is applicable to civil wars that experience intervention by rivals, such as Syria or Libya.

Globalization occupies a central research activity and remains an increasingly controversial phenomenon in economics. This phenomenon corresponds to a subject that can be criticized through its impact on national economies. On the other hand, the world economy is evolving in a liberalized environment in which foreign direct investment plays a fundamental role in the economic development of each country. The advent of financial flows – foreign direct investment, remittances and official development assistance – can be a key factor in the development of the economy. The purpose of this study is to analyze the effect of financial flows on economic growth in developing countries. Empirically, different approaches have been used. As part of this study, an attempt was made to use a combined autoregressive distributed lag (ARDL) panel approach to study the short-term and long-run effects of financial flows on economic growth. The results indicate ambiguous effects. Economically, the effect of financial flows on economic growth depends on the investor’s expectations.

To study the short-run and long-run effects of financial flows on economic growth, this paper considers an empirical approach based on the panel ARDL. This model makes it possible to distinguish between the short-run effect and the long-run one. This type of model is based on three estimators, namely, mean group, pooled mean group (PMG) and dynamic fixed effect.

Results confirm the existence of a long-run relationship because the adjustment coefficient (error correction parameter) is negative and statistically significant. This paper finds that the PMG estimator is more consistent and more efficient. In the short-run, foreign direct investment do negatively affect economic growth, the effect is no significant in the long-run. On the other hand, the effect of remittances on economic growth is significant in the short-run. However, it is no significant in the long-run. Finally, the results suggest that the effect of official development assistance on economic growth is insignificant; both in the long-run and in the short-run.

To study the interaction between financial flows and economic growth, some empirical methodology are used such as the dynamic panel data and the autoregressive vector (VAR) model. In this study, we apply the panel ARDL model to analyze the short-run and the long-run effect for each financial flow on economic growth. The objective is to study the heterogeneity on dynamic adjustment in the short-term and long-term.

The study aims to complement extant literature by assessing linkages between financial development, external flows and CO₂ emissions in 27 sub-Saharan African countries for the period 2002 to 2018.

The empirical evidence is based on interactive quantile regressions and external flows consist of remittances, foreign aid, trade openness and foreign investment.

The findings show minimum levels of external flows that should be reached in order for the interaction between external flows and financial development to promote environmental sustainability in terms of reducing CO₂ emissions. The minimum thresholds are critical levels of external flows that should be reached before financial development promotes environmental sustainability.

Policy implications – The disclosed external flow (i.e. FDI, foreign aid, trade and remittances) thresholds are actionable policy thresholds that the government can act upon in order to influence environmental sustainability by means of financial development. Theoretical implications – The findings below the external flow thresholds are consistent with the dependency theory in that external flows are harmful to socio-economic progress and environmental sustainability. When external flows are consolidated to the established critical masses or thresholds in the long run, the corresponding findings are in line with the extant neoclassical and endogenous growth theories, not least, because in the long run, external flows are associated with technological progress and adoption of stronger environmental legislation at the domestic level which are worthwhile in promoting environmental performance.

To reach the minimum trade and FDI levels that are worthwhile for the promotion of environmental sustainability, corporations should set targets on exports and imports as well as foreign investment levels that they have to attain in contributing to the national target of external flows needed to reduce CO₂ emissions. Such trade and FDI targets should be set in industries of various economic sectors.

The study complements the extant literature by assessing how external flows interact with financial development to influence CO₂ emissions.

China's Belt and Road Initiative (BRI) is the most ambitious investment strategy for infrastructural development belonging to the significant potential for stimulating regional economic growth in Asia, Europe and Africa. This study aims to investigate the impact of infrastructure on spurring inward foreign direct investment (FDI) within the purview of human capital, GDP per capita, foreign aid, trade, domestic investment, population and institutional quality in BRI countries.

In doing so, the authors analyze panel data from 2000 to 2019 within the framework of the system generalized method of movement (GMM) approach for 66 BRI countries from Europe, Asia, Africa and the Middle East.

The investigated results demonstrate that aggregate and disaggregate infrastructure indices, e.g. transport, telecommunications, financial and energy infrastructures, are the driving forces in attracting foreign direct investment (FDI) in the BRI countries. In addition, control variables (i.e. institutional quality, human capital, trade, domestic investment, foreign aid and GDP per capita) play an essential role in spurring FDI inflows.

The authors’ study uniquely investigates both the pre- (2000–2012) and post- (2013–2019) BRI scenarios using the aggregate and disaggregate infrastructural components from the perspectives of full and clustered sample regions, such as Asia, Europe, Africa and the Middle East. The study provides several policy implications.