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Debt and Growth in Developing Countries - Debito e crescita nei paesi in via di sviluppo

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  • Dao, Minh Quang

    ()
    (Eastern Illinois University)

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    Abstract

    This paper investigates the effect of both external and public debt on growth in developing countries. Based on data from the World Bank and using a sample of sixty-two developing economies, we find that per capita GDP growth is linearly dependent upon the percentage of the urban population with sanitation services, the percentage of the urban population with water access, that of the rural population with water access, gross capital formation as a percent of GDP, the adult literacy rate, the ratio of bank liquid reserves to bank assets, the globalization index, social and political globalization. Regression results also show external debt to exports ratio does not linearly influence growth for this sample of countries. However, for a sample of twenty-seven Heavily Indebted Poor Countries (HIPC), external debt as a percent of GDP does exert a negative impact on growth. On the other hand, using another sample of fifty-two developing economies, we are able to show that public debt as a percent of GDP positively affects growth. Statistical results of such empirical examination will assist policy makers in developing countries understand the links between debt and growth and in order to take devise policies aimed at fostering economic growth. Data for all variables are from the 2010 World Development Report, the 2009 World Development Report, the 2010 KOF Index of Globalization, and the NationMaster.com website. We apply the least-squares estimation technique in a multivariate linear regression. We observe that in the first regression a few coefficient estimates do not have the expected sign due to possible collinearity among some independent variables. - Questo studio esamina l’effetto generato sia dal debito estero che dal debito pubblico, sulla crescita dei paesi in via di sviluppo. Dall’analisi dei dati della Banca Mondiale e utilizzando un campione di 62 economie in via di sviluppo, è risultato che la crescita del PIL pro capite dipende linearmente dalla percentuale di popolazione urbana che ha accesso ai servizi sanitari e all’acqua, da quella della popolazione rurale con accesso all’acqua, dalla formazione del capitale lordo come percentuale del PIL, dal tasso di alfabetizzazione adulta, dal rapporto riserva liquidità-patrimonio delle banche, dall’indice di globalizzazione, sia sociale che politica. I risultati della regressione dimostrano anche che, in questo campione di paesi, il rapporto debito estero-esportazioni non influenza la crescita in maniera lineare. In ogni caso, per un campione di 27 paesi poveri altamente indebitati (HIPC), il debito estero come percentuale del PIL genera un impatto negativo sulla crescita. Diversamente, prendendo a campione altri 52 paesi in via di sviluppo, si evidenzia come il debito pubblico, in percentuale del PIL, influenzi positivamente la crescita. I risultati di quest’analisi empirica consentono di comprendere i legami tra debito e crescita al fine di adottare adeguate politiche di promozione della crescita economica nei paesi in via di sviluppo. Le fonti dei dati relativi alle variabili sono il World Development Report 2009 e 2010, il KOF Index of Globalization 2010 e il sito NationMaster.com. Viene applicata la tecnica dei minimi quadrati in una regressione lineare multivariata. I risultati suggeriscono che nella prima regressione alcuni coefficienti non prendono il segno atteso a causa della possibile collinearità tra alcune variabili indipendenti.

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    Bibliographic Info

    Article provided by Camera di Commercio di Genova in its journal Economia Internazionale / International Economics.

    Volume (Year): 64 (2011)
    Issue (Month): 2 ()
    Pages: 173-193

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    Handle: RePEc:ris:ecoint:0620

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    Keywords: External Debt; Public Debt; Globalization Index; Gross Capital Formation; Literacy Rate; Developing Countries;

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