Complementarity Between Foreign Aid and Financial Development as a Driver of Economic Growth in Selected Emerging Markets
This paper studied whether the complementarity between financial development and foreign aid promotes economic growth in selected emerging markets using the panel Fully Modified Ordinary Least Squares (FMOLS) approach, with data ranging from 1994 to 2014. Although (1) aid‑growth and (2) finance‑grow...
Main Author: | |
---|---|
Format: | Article |
Language: | English |
Published: |
Lodz University Press
2018-12-01
|
Series: | Comparative Economic Research |
Subjects: | |
Online Access: | https://czasopisma.uni.lodz.pl/CER/article/view/3879 |
id |
doaj-4391134a087348d5a4d96ca69f860b9f |
---|---|
record_format |
Article |
spelling |
doaj-4391134a087348d5a4d96ca69f860b9f2021-09-02T14:48:41ZengLodz University PressComparative Economic Research1508-20082082-67372018-12-01214456110.2478/cer-2018-00263879Complementarity Between Foreign Aid and Financial Development as a Driver of Economic Growth in Selected Emerging MarketsKunofiwa Tsaurai0Ph.D., Associate Professor at the University of South Africa, Department of Finance, Risk Management and Banking, Pretoria, South AfricaThis paper studied whether the complementarity between financial development and foreign aid promotes economic growth in selected emerging markets using the panel Fully Modified Ordinary Least Squares (FMOLS) approach, with data ranging from 1994 to 2014. Although (1) aid‑growth and (2) finance‑growth studies have been conclusively dealt with, the role of financial development in the aid‑growth nexus has been hardly researched. Is financial development a channel through which foreign aid positively influences economic growth? The current study seeks to address these issues using selected emerging markets as a case study. The complementarity between foreign aid and financial development (domestic credit provided by the financial sector, domestic private credit provided by banks, outstanding domestic private debt securities and stock market turnover) resulted in a significant positive impact on economic growth. The study, therefore, urges selected emerging markets to implement policies which deepen the financial sector in order to allow foreign aid to positively contribute towards economic growth.https://czasopisma.uni.lodz.pl/CER/article/view/3879foreign aidfinancial developmenteconomic growthemerging markets |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
Kunofiwa Tsaurai |
spellingShingle |
Kunofiwa Tsaurai Complementarity Between Foreign Aid and Financial Development as a Driver of Economic Growth in Selected Emerging Markets Comparative Economic Research foreign aid financial development economic growth emerging markets |
author_facet |
Kunofiwa Tsaurai |
author_sort |
Kunofiwa Tsaurai |
title |
Complementarity Between Foreign Aid and Financial Development as a Driver of Economic Growth in Selected Emerging Markets |
title_short |
Complementarity Between Foreign Aid and Financial Development as a Driver of Economic Growth in Selected Emerging Markets |
title_full |
Complementarity Between Foreign Aid and Financial Development as a Driver of Economic Growth in Selected Emerging Markets |
title_fullStr |
Complementarity Between Foreign Aid and Financial Development as a Driver of Economic Growth in Selected Emerging Markets |
title_full_unstemmed |
Complementarity Between Foreign Aid and Financial Development as a Driver of Economic Growth in Selected Emerging Markets |
title_sort |
complementarity between foreign aid and financial development as a driver of economic growth in selected emerging markets |
publisher |
Lodz University Press |
series |
Comparative Economic Research |
issn |
1508-2008 2082-6737 |
publishDate |
2018-12-01 |
description |
This paper studied whether the complementarity between financial development and foreign aid promotes economic growth in selected emerging markets using the panel Fully Modified Ordinary Least Squares (FMOLS) approach, with data ranging from 1994 to 2014. Although (1) aid‑growth and (2) finance‑growth studies have been conclusively dealt with, the role of financial development in the aid‑growth nexus has been hardly researched. Is financial development a channel through which foreign aid positively influences economic growth? The current study seeks to address these issues using selected emerging markets as a case study. The complementarity between foreign aid and financial development (domestic credit provided by the financial sector, domestic private credit provided by banks, outstanding domestic private debt securities and stock market turnover) resulted in a significant positive impact on economic growth. The study, therefore, urges selected emerging markets to implement policies which deepen the financial sector in order to allow foreign aid to positively contribute towards economic growth. |
topic |
foreign aid financial development economic growth emerging markets |
url |
https://czasopisma.uni.lodz.pl/CER/article/view/3879 |
work_keys_str_mv |
AT kunofiwatsaurai complementaritybetweenforeignaidandfinancialdevelopmentasadriverofeconomicgrowthinselectedemergingmarkets |
_version_ |
1721174238624219136 |