Public and publicly guaranteed external debt, debt servicing and investment in emerging economies
The global financial crisis of 2007 gave a major boost to the debt-investment nexus debate given the astronomical growth in external debt and its associated debt servicing burdens, which constrain the fiscal space of many developed and emerging economies. Hence, this study examined the effe...
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| Format: | Article |
| Language: | English |
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Faculty of Economics, Belgrade
2024-01-01
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| Series: | Ekonomski Anali |
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| Online Access: | https://doiserbia.nb.rs/img/doi/0013-3264/2024/0013-32642440031O.pdf |
| Summary: | The global financial crisis of 2007 gave a major boost to the debt-investment
nexus debate given the astronomical growth in external debt and its
associated debt servicing burdens, which constrain the fiscal space of many
developed and emerging economies. Hence, this study examined the effect of
external debt and debt servicing on investment in MINT countries for the
period, 1990-2021 using the FMOLS estimation technique. The results show
that external debt adversely affects investment in Indonesia but stimulates
investment in Türkiye while debt servicing has a catastrophic effect on
investment in Indonesia and Türkiye but enhances investment in Nigeria.
Overall, the effect of external debt and debt servicing on investment in
MINT countries are mixed. Hence, the policymakers in each country need to
put measures in place to foster debt sustainability, ensure effective
domestic resource mobilisation for investment purposes and promote debt
transparency by adopting effective debt management practices. |
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| ISSN: | 0013-3264 1820-7375 |