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“External Debt, Domestic Investment and Economic Growth in Cameroon” A system Estimation Approach

Author

Listed:
  • Forgha, Njimanted G.
  • Mbella, Mukete E.
  • Ngangnchi, Forbe H.

Abstract

The feedback of external debt on economic growth through gross domestic investment has provided quite interesting results throughout the world especially in developing countries where external and internal borrowing have been a tradition. Based on a system estimation approach, using Two Stage Least Squares as an estimation technique in the case of Cameroon for a period of 34 years (1980-2013), the results reveal that while domestic investment increases economic growth, external debt retards economic growth in Cameroon, revealing the influence of debt overhang. It was therefore concluded that external debts adversely affect economic growth in Cameroon and thus, as a major recommendation, the authorities are expected to improve on the performance of external debt through proper debt management, a complete debt relief and using the debt in productive sectors for production of goods and services.

Suggested Citation

  • Forgha, Njimanted G. & Mbella, Mukete E. & Ngangnchi, Forbe H., 2014. "“External Debt, Domestic Investment and Economic Growth in Cameroon” A system Estimation Approach," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 1(1), pages 3-16.
    • Handle: RePEc:zbw:espost:108070
    DOI: 10.1453/jeb.v1i1.161
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    Citations

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    Cited by:

    1. Bakari, Sayef, 2018. "The Impact of Domestic Investment on Economic Growth New Policy Analysis from Algeria," Bulletin of Economic Theory and Analysis, BETA Journals, vol. 3(1), pages 35-51, March.
    2. Bakari, Sayef & Fakraoui, Nissar & Mabrouki, Mohamed, 2020. "The Contribution of Domestic Investment, Exports and Imports on Economic Growth: A Case Study of Peru," MPRA Paper 99041, University Library of Munich, Germany.
    3. Sayef Bakari & Sofien Tiba & Nissar Fakraoui, 2019. "Does Domestic Investment Contribute To Economic Growth In Uruguay? What Did The Empirical Facts Say?," Journal of Smart Economic Growth, , vol. 4(2), pages 53-69, September.
    4. Bakari, Sayef, 2017. "The Nexus between Export, Import, Domestic Investment and Economic Growth in Japan," MPRA Paper 76110, University Library of Munich, Germany.
    5. Adeniyi, Oluwatosin & Adekunle, Wasiu & Orekoya, Samuel, 2018. "Non-linear Relation between External Debt and Economic Growth in Nigeria: Does the Investment Channel Matter?," MPRA Paper 99975, University Library of Munich, Germany, revised 07 Apr 2019.

    More about this item

    Keywords

    External debt; Domestic Investment; Economic growth; productive sectors;
    All these keywords.

    JEL classification:

    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General

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