Saving less when there is more foreign lending? Foreign debt and savings in developing countries
Although literature has given considerable attention to the effects of foreign debt on growth, we still know little about its effects on the internal potential for capital formation. Literature suggests a number of channels through which the availability of foreign financing could affect domestic savings. We test empirically this relationship using data for Sub-Saharan Africa and Latin America and the Caribbean over 1975-2004. Controlling for endogeneity, we find that foreign debt adversely influences domestic savings especially in the long run. The results are not susceptible to the choice of countries, although few outliers should be noted.
Volume (Year): 13 (2010)
Issue (Month): 3 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/GPRE19|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/GPRE19|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Aizenman, Joshua & Pinto, Brian & Radziwill, Artur, 2007.
"Sources for financing domestic capital - Is foreign saving a viable option for developing countries?,"
Journal of International Money and Finance,
Elsevier, vol. 26(5), pages 682-702, September.
- Joshua Aizenman & Brian Pinto & Artur Radziwill, 2004. "Sources for financing domestic capital - is foreign saving a viable option for developing countries?," CASE Network Studies and Analyses 0288, CASE-Center for Social and Economic Research.
- Aizenman, Joshua & Pinto, Brian & Radziwill, Artur, 2004. "Sources for Financing Domestic Capital - is Foreign Saving a Viable Option for Developing Countries?," Santa Cruz Department of Economics, Working Paper Series qt7g18546z, Department of Economics, UC Santa Cruz.
- Joshua Aizenman & Brian Pinto & Artur Radziwill, 2004. "Sources for Financing Domestic Capital -- Is Foreign Saving a Viable Option for Developing Countries?," NBER Working Papers 10624, National Bureau of Economic Research, Inc.
- Aizenman, Joshua & Pinto, Brian & Radziwill, Artur, 2004. "Sources for Financing Domestic Capital - is Foreign Saving a Viable Option for Developing Countries?," Santa Cruz Center for International Economics, Working Paper Series qt7g18546z, Center for International Economics, UC Santa Cruz.
- Hajivassiliou, Vassilis A., 1987. "The external debt repayments problems of LDC's : An econometric model based on panel data," Journal of Econometrics, Elsevier, vol. 36(1-2), pages 205-230.
- Léonce Ndikumana, 2002.
"Public Debts and Private Assets:Explaining Capital Flight from Sub-Saharan African Countries,"
wp32, Political Economy Research Institute, University of Massachusetts at Amherst.
- Ndikumana, Leonce & Boyce, James K., 2003. "Public Debts and Private Assets: Explaining Capital Flight from Sub-Saharan African Countries," World Development, Elsevier, vol. 31(1), pages 107-130, January.
- Léonce Ndikumana & James K. Boyce, 2002. "Public Debts and Private Assets: Explaining Capital Flight from Sub-Saharan African Countries," UMASS Amherst Economics Working Papers 2002-02, University of Massachusetts Amherst, Department of Economics.
- Osei, B., 1995. "Ghana: The Burden of Debt service Payment Under Structural Adjustment," Papers 33, African Economic Research Consortium.
- 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.
- Menbere Workie Tiruneh, 2004. "An Empirical Investigation Into the Determinants of External Indebtedness," Prague Economic Papers, University of Economics, Prague, vol. 2004(3), pages 261-277.
- Mbire, B. & Atingi, M., 1997. "Growth and Foreign Debt: The Ugandan Experience," Papers 66, African Economic Research Consortium.
- Sawada, Yasuyuki, 1994. "Are the heavily indebted countries solvent?: Tests of intertemporal borrowing constraints," Journal of Development Economics, Elsevier, vol. 45(2), pages 325-337, December.
- Gary Dymski, 2011. "The International Debt Crisis," Chapters, in: The Handbook of Globalisation, Second Edition, chapter 6 Edward Elgar Publishing.
- Erdal Karagol, 2002. "The Causality Analysis of External Debt Service and GNP : The Case of Turkey," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 2(1), pages 39-64.
- Helene Poirson Ward & Luca A Ricci & Catherine A Pattillo, 2002.
"External Debt and Growth,"
IMF Working Papers
02/69, International Monetary Fund.
When requesting a correction, please mention this item's handle: RePEc:taf:jpolrf:v:13:y:2010:i:3:p:213-223. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If references are entirely missing, you can add them using this form.