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Foreign Aid and Economic Growth: New Evidence from Panel Cointegration
University of Skövde, School of Technology and Society.
University of Örebro.
2005 (English)In: Journal of Economic Development, ISSN 0254-8372, Vol. 30, no 1, 71-80 p.Article in journal (Refereed) Published
Abstract [en]

The relationship between foreign aid and economic growth is investigated for a panel of developing countries (Botswana, Ethiopia, India, Kenya, Sri-Lanka, and Tanzania) over the period 1974-1996. The results reveal that the variables contain a panel unit root and they cointegrate in a panel perspective. The long-run elasticities (close to one for most countries) show that foreign aid has a positive and significant effect on economic activity for each country in the sample. A policy implication which may be drawn from the study is that foreign capital flows can have a favorable effect on real income by supplementing domestic savings.

Place, publisher, year, edition, pages
The Economic Research Institute of Chung-Ang University (Korea) , 2005. Vol. 30, no 1, 71-80 p.
Identifiers
URN: urn:nbn:se:his:diva-1583OAI: oai:DiVA.org:his-1583DiVA: diva2:31859
Available from: 2007-07-30 Created: 2007-07-30 Last updated: 2016-12-23Bibliographically approved

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CiteExportLink to record
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Citation style
  • apa
  • harvard1
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  • vancouver
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