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Foreign aid, domestic savings, and growth in LDCs: An application of likelihood-based panel cointegration

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  • Irandoust, Manuchehr
  • Ericsson, Johan

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  • Irandoust, Manuchehr & Ericsson, Johan, 2005. "Foreign aid, domestic savings, and growth in LDCs: An application of likelihood-based panel cointegration," Economic Modelling, Elsevier, vol. 22(4), pages 616-627, July.
    • Handle: RePEc:eee:ecmode:v:22:y:2005:i:4:p:616-627
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    1. Stéphane Pallage & Michel A. Robe, 2001. "Foreign Aid and the Business Cycle," Review of International Economics, Wiley Blackwell, vol. 9(4), pages 641-672, November.
    2. Chihwa Kao & Min‐Hsien Chiang & Bangtian Chen, 1999. "International R&D Spillovers: An Application of Estimation and Inference in Panel Cointegration," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(S1), pages 691-709, November.
    3. Robert Lensink & Oliver Morrissey, 2000. "Aid instability as a measure of uncertainty and the positive impact of aid on growth," Journal of Development Studies, Taylor & Francis Journals, vol. 36(3), pages 31-49.
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    5. Easterly, William, 1999. "The ghost of financing gap: testing the growth model used in the international financial institutions," Journal of Development Economics, Elsevier, vol. 60(2), pages 423-438, December.
    6. Griffin, Keith B & Enos, J L, 1970. "Foreign Assistance: Objectives and Consequences," Economic Development and Cultural Change, University of Chicago Press, vol. 18(3), pages 313-327, April.
    7. David Dollar & Craig Burnside, 2000. "Aid, Policies, and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 847-868, September.
    8. Kao, Chihwa, 1999. "Spurious regression and residual-based tests for cointegration in panel data," Journal of Econometrics, Elsevier, vol. 90(1), pages 1-44, May.
    9. Papanek, Gustav F, 1973. "Aid, Foreign Private Investment, Savings, and Growth in Less Developed Countries," Journal of Political Economy, University of Chicago Press, vol. 81(1), pages 120-130, Jan.-Feb..
    10. Carl-Johan Dalgaard & Henrik Hansen & Finn Tarp, 2004. "On The Empirics of Foreign Aid and Growth," Economic Journal, Royal Economic Society, vol. 114(496), pages 191-216, June.
    11. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
    12. Karlsson, Sune & Lothgren, Mickael, 2000. "On the power and interpretation of panel unit root tests," Economics Letters, Elsevier, vol. 66(3), pages 249-255, March.
    13. Peter Phillips & Hyungsik Moon, 2000. "Nonstationary panel data analysis: an overview of some recent developments," Econometric Reviews, Taylor & Francis Journals, vol. 19(3), pages 263-286.
    14. Rolf Larsson & Johan Lyhagen & Mickael Lothgren, 2001. "Likelihood-based cointegration tests in heterogeneous panels," Econometrics Journal, Royal Economic Society, vol. 4(1), pages 1-41.
    15. Johansen, Soren, 1995. "Likelihood-Based Inference in Cointegrated Vector Autoregressive Models," OUP Catalogue, Oxford University Press, number 9780198774501.
    16. Peter Pedroni, 1999. "Critical Values for Cointegration Tests in Heterogeneous Panels with Multiple Regressors," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(S1), pages 653-670, November.
    17. Kanhaya L. Gupta, 1975. "Foreign Capital Inflows, Dependency Burden, And Saving Rates In Developing Countries: A Simultaneous Equation Model," Kyklos, Wiley Blackwell, vol. 28(2), pages 358-374, January.
    18. Ericsson, Johan & Irandoust, Manuchehr, 2004. "The productivity-bias hypothesis and the PPP theorem: new evidence from panel vector autoregressive models," Japan and the World Economy, Elsevier, vol. 16(2), pages 121-138, April.
    19. Moon, H.R. & Perron, P., 2000. "The Seemingly Unrelated Dynamic Cointegration Regression Model and Testing for Purching Power Parity," Cahiers de recherche 2000-03, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    20. Larsson, Rolf & Lyhagen, Johan, 1999. "Likelihood-Based Inference in Multivariate Panel Cointegration Models," SSE/EFI Working Paper Series in Economics and Finance 331, Stockholm School of Economics.
    21. Griffin, Keith, 1970. "Foreign Capital, Domestic Savings and Economic Development," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 32(2), pages 99-112, May.
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    23. Boone, Peter, 1996. "Politics and the effectiveness of foreign aid," European Economic Review, Elsevier, vol. 40(2), pages 289-329, February.
    24. Ram D. Singh, 1985. "State Intervention, Foreign Economic Aid, Savings and Growth in LDCs: Some Recent Evidence," Kyklos, Wiley Blackwell, vol. 38(2), pages 216-232, May.
    25. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-1580, November.
    26. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
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    29. Over, A Mead, Jr, 1975. "An Example of the Simultaneous-Equation Problem: A Note on "Foreign Assistance: Objectives and Consequences."," Economic Development and Cultural Change, University of Chicago Press, vol. 23(4), pages 751-756, July.
    30. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
    31. Levy, Victor, 1988. "Aid and growth in Sub-Saharan Africa: The recent experience," European Economic Review, Elsevier, vol. 32(9), pages 1777-1795, November.
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    Citations

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    Cited by:

    1. Njangang, Henri & Nembot Ndeffo, Luc & Noubissi Domguia, Edmond & Fosto Koyeu, Prevost, 2018. "The long-run and short-run effects of foreign direct investment, foreign aid and remittances on economic growth in African countries," MPRA Paper 89747, University Library of Munich, Germany.
    2. Manuchehr Irandoust, 2020. "The effectiveness of monetary policy and output fluctuations: An asymmetric analysis," Australian Economic Papers, Wiley Blackwell, vol. 59(2), pages 161-181, June.
    3. Kwabena Gyimah-Brempong & Jeffrey S. Racine, 2014. "Aid and Economic Growth: A Robust Approach," Journal of African Development, African Finance and Economic Association (AFEA), vol. 16(1), pages 1-35.
    4. Workneh, Migbaru Alamirew & Francken, Nathalie, 2015. "A review of the impact of foreign aid on domestic saving," MPRA Paper 92174, University Library of Munich, Germany, revised 13 Feb 2019.
    5. Fambon, Samuel, 2013. "Foreign Capital Inflow and Economic Growth in Cameroon," WIDER Working Paper Series 124, World Institute for Development Economic Research (UNU-WIDER).
    6. Md Ismail Hossain & Md Istiak Hossain & Mollah Aminul Islam & Md Reza Sultanuzzaman, 2022. "Does Foreign Aid Have an Expected Role in the Economic Growth of Bangladesh? An Analysis in ARDL Approach," International Journal of Economics and Financial Issues, Econjournals, vol. 12(6), pages 113-126, November.
    7. Irandoust, Manuchehr, 2019. "On the relation between exchange rates and tourism demand: A nonlinear and asymmetric analysis," The Journal of Economic Asymmetries, Elsevier, vol. 20(C).
    8. Gaoussou Diarra, 2011. "Aid unpredictability and absorptive capacity: analyzing disbursement delays in Africa," Economics Bulletin, AccessEcon, vol. 31(1), pages 1004-1017.
    9. Moheddine Younsi & Marwa Bechtini & Hasna Khemili, 2021. "The effects of foreign aid, foreign direct investment and domestic investment on economic growth in African countries: Nonlinearities and complementarities," African Development Review, African Development Bank, vol. 33(1), pages 55-66, March.
    10. Simone Juhasz Silva & Douglas Nelson, 2012. "Does Aid Cause Trade? Evidence from an Asymmetric Gravity Model," The World Economy, Wiley Blackwell, vol. 35(5), pages 545-577, May.
    11. Workneh, Migbaru Alamirew, 2018. "Poverty and unemployment in Spain during the 2008's financial crises," MPRA Paper 92145, University Library of Munich, Germany.
    12. Manuchehr Irandoust, 2024. "Employment and technology: Creative creation or creative destruction? An asymmetric analysis," Australian Economic Papers, Wiley Blackwell, vol. 63(2), pages 201-219, June.
    13. Temitope L A, 2014. "The Effects of Foreign Resource Inflow and Savings on the Economic Growth of South Africa: A VAR Analysis," Journal of Economics and Behavioral Studies, AMH International, vol. 6(3), pages 232-241.
    14. Samuel Fambon, 2013. "Foreign Capital Inflow and Economic Growth in Cameroon," WIDER Working Paper Series wp-2013-124, World Institute for Development Economic Research (UNU-WIDER).
    15. Jamel Jouini, 2016. "Economic growth and savings in Saudi Arabia: empirical evidence from cointegration and causality analysis," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 23(4), pages 478-495, October.
    16. Odhiambo, Nicholas M., 2009. "Savings and economic growth in South Africa: A multivariate causality test," Journal of Policy Modeling, Elsevier, vol. 31(5), pages 708-718, September.
    17. Yahyaoui, Ismahen & Bouchoucha, Najeh, 2019. "The Long-run relationship between ODA, growth and governance: An application of FMOLS and DOLS Approachs," MPRA Paper 95938, University Library of Munich, Germany.
    18. Fang‐Ying Su & Wan‐Ying Yang, 2023. "Gender‐focused or gender mainstreaming programmes? The gender dimension of international aid," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(7), pages 1874-1891, October.
    19. Irandoust, Manuchehr, 2022. "FDI and Natural Resource Rents: Evidence from Eight Post-Communist Countries," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 47(2), pages 67-79, June.
    20. M. Rodwan Abouharb & Erick Duchesne, 2019. "Economic Development and the World Bank," Social Sciences, MDPI, vol. 8(5), pages 1-30, May.

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