The Effect of External Debt on Real Economic Sector in Selected CESEE Countries

Previous studies indicated different results regarding the impact of external debt on economic growth in various countries. These different results may be due to the non-linear impact of external debt on real economic sector. The investigation of a non-linear and dynamic relationship can help govern...

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Main Authors: Ramin Bashir Khodaparasti, Reza Mohammadpour
Format: Article
Language:English
Published: Editura ASE 2016-08-01
Series:Amfiteatru Economic
Subjects:
Online Access:http://www.amfiteatrueconomic.ro/ArticolEN.aspx?CodArticol=2541
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author Ramin Bashir Khodaparasti
Reza Mohammadpour
author_facet Ramin Bashir Khodaparasti
Reza Mohammadpour
author_sort Ramin Bashir Khodaparasti
collection DOAJ
description Previous studies indicated different results regarding the impact of external debt on economic growth in various countries. These different results may be due to the non-linear impact of external debt on real economic sector. The investigation of a non-linear and dynamic relationship can help governments make appropriate policies versus external debt. In this regard, this paper investigates the impact of external debt on real economic sector in selected countries from central, eastern and south-eastern Europe countries during the period 2000-2014. Investigation in this paper contributes to the literature by covering the non-linear and dynamic relationship to know whether external debt affects the real economic sector of selected CESEE countries. The results of the Generalized Method of Moments based on a dynamic panel data indicate that the impact of external debt on gross domestic product was negative and significant in mentioned countries. Therefore, external debt should be properly applied in which increase the investments with high rate of return. Our empirical findings send a warning about the need to keep the external debts under control.
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spelling doaj-art-b9c40c40a0f44a12b33be8dd5cb7a33c2025-08-20T02:18:57ZengEditura ASEAmfiteatru Economic1582-91462247-91042016-08-011843548556The Effect of External Debt on Real Economic Sector in Selected CESEE CountriesRamin Bashir Khodaparasti 0Reza Mohammadpour 1University of Urmia, Urmia, IranUniversity of Tehran, Jolfa, IranPrevious studies indicated different results regarding the impact of external debt on economic growth in various countries. These different results may be due to the non-linear impact of external debt on real economic sector. The investigation of a non-linear and dynamic relationship can help governments make appropriate policies versus external debt. In this regard, this paper investigates the impact of external debt on real economic sector in selected countries from central, eastern and south-eastern Europe countries during the period 2000-2014. Investigation in this paper contributes to the literature by covering the non-linear and dynamic relationship to know whether external debt affects the real economic sector of selected CESEE countries. The results of the Generalized Method of Moments based on a dynamic panel data indicate that the impact of external debt on gross domestic product was negative and significant in mentioned countries. Therefore, external debt should be properly applied in which increase the investments with high rate of return. Our empirical findings send a warning about the need to keep the external debts under control.http://www.amfiteatrueconomic.ro/ArticolEN.aspx?CodArticol=2541external debtreal economic sectordynamic panel dataCESEE
spellingShingle Ramin Bashir Khodaparasti
Reza Mohammadpour
The Effect of External Debt on Real Economic Sector in Selected CESEE Countries
Amfiteatru Economic
external debt
real economic sector
dynamic panel data
CESEE
title The Effect of External Debt on Real Economic Sector in Selected CESEE Countries
title_full The Effect of External Debt on Real Economic Sector in Selected CESEE Countries
title_fullStr The Effect of External Debt on Real Economic Sector in Selected CESEE Countries
title_full_unstemmed The Effect of External Debt on Real Economic Sector in Selected CESEE Countries
title_short The Effect of External Debt on Real Economic Sector in Selected CESEE Countries
title_sort effect of external debt on real economic sector in selected cesee countries
topic external debt
real economic sector
dynamic panel data
CESEE
url http://www.amfiteatrueconomic.ro/ArticolEN.aspx?CodArticol=2541
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