Open AccessInvestigating the Impact of External Debt on Economic Growth: A Case Study of Pakistan
Author(s) -
IRUM SAJJAD,
IRUM SAJJAD,
DR. MUHAMMAD AZAM KHAN
Publication year - 2021
Publication title -
journal of business and tourism
Language(s) - English
Resource type - Journals
eISSN - 2521-0548
pISSN - 2520-0739
DOI - 10.34260/jbt.v4i2.160
Subject(s) - economics , external debt , monetary economics , foreign direct investment , debt , life expectancy , investment (military) , international economics , macroeconomics , demography , sociology , politics , political science , law , population
This article is an attempt to evaluate the effect of external debt on economic growth for during the period of 1980–2016. The Augmented Dickey Fuller (ADF) test is used for determining stationarity, whereas the ADF test results exhibit that the variables used found are . The empirical results indicate that external debt and total debt service have deleterious and statistically significant impacts on GDP growth rate. The other explanatory variables namely human capital by life expectancy, exports, and Foreign Direct Investment (FDI)reveals significantly positive significant influence on GDP growth rate. Appropriate policy should be adopted by the policy makers to reduce external debt, increase volume of exports and enhance more foreign investment, it will boost economic growth in the country.