International Journal of Economics and Financial

Issues
ISSN: 2146-4138

available at http: www.econjournals.com

International Journal of Economics and Financial Issues, 2023, 13(1), 83-88.

Does External Debt Affect Economic Growth: Evidence from

South Asian Countries

Sonia Afrin Ale1, Md Shafiqul Islam1, Hazera-Tun-Nessa2*

Department of Economics, Noakhali Science and Technology University, Bangladesh, 2Department of International Business,
1

University of Dhaka, Bangladesh. *Email: [email protected]

Received: 20 September 2022 Accepted: 30 December 2022 DOI: https://doi.org/10.32479/ijefi.13527

ABSTRACT
Time series econometric methods are frequently used in studies examining how external debt affects economic growth. For the period of 1980-2020,
this study creates a panel dataset of five South Asian nations and examines the link between external debt and economic growth. The findings of
Cross-sectionally Augmented Panel Unit Root Test by Pesaran’s (2007) confirms that all variables are integrated in order I (1). To understand the
error correction mechanism that determines the short-run dynamic nature of external debt and economic growth, the study uses the Cross-Sectional
Dependence Autoregressive Distributed Lag (CS-ARDL) technique. A significant negative association between external debt and economic growth is
found to exist in South Asia both in the long run and in the short run. Since rising foreign debt is associated with slower economic growth, the study
recommends that South Asian nations should promote domestic savings and investment to lessen their reliance on external debt.
Keywords: External Debt, Economic Growth, Panel Data Model
JEL Classifications: F34; O47; C23

1. INTRODUCTION a manageable amount of debt. The debt overhang theory and

the liquidity constraint hypothesis have been used to understand
When a nation lacks adequate domestic savings, it often takes better how debt affects economic growth (Krugman 1988;
on external debt to supplement its domestic resources and Saches 1989; and Cohen 1995). According to these views, rising
achieve growth and other goals. External debts significantly government internal borrowing prevents economic growth as
diminish a country‘s capacity to repay debts if they are not debt levels rise. Due to the crowding effect, when interest rates
invested in productive and income-boosting activities. High debt rise due to an increase in borrowing, borrowing becomes more
levels make it harder to maintain economic growth and fight expensive for both investment and consumption. Furthermore,
poverty (Berensmann, 2004; Maghyereh and Hashemite, 2003). due to poor management, borrowing has a detrimental effect on
Researchers and policymakers have focused a lot of attention the financial sustainability and economic progress of developing
on the connection between external debt and economic growth nations. So, it is essential to finance profitable investments that
in the wake of the global debt crisis of the 1980s, which was will produce additional income with external financing (Kharusi
caused by the accumulated foreign debt stock and the associated and Ada, 2018).
sustainability problem, particularly in highly indebted poor
countries (Gunter, 2002; Easterly, 2002). The situation concerning South Asian nations‘ external debt
has changed throughout time. The trend of external debt (as a
According to economic theory, both developing and developed percentage of GNI) of five South Asian countries for the period
countries should be able to increase their economic growth with of 1980 to 2020 is shown in Figure 1.

This Journal is licensed under a Creative Commons Attribution 4.0 International License

International Journal of Economics and Financial Issues | Vol 13 • Issue 1 • 2023 83

 Ale, et al.: Does External Debt Affect Economic Growth: Evidence from South Asian Countries

It is observed that Bhutan is experiencing a rising external debt. Over the period, all countries experienced frequent ups and downs
Before 2001, Bhutan‘s external debt was lower than Sri Lanka and in their GDP growth rate. In Figure 2, the trend of GDP growth
Pakistan, but after 2001, it had the highest external debt among rate (%) over the sample period is represented.
other South Asian countries with a rising trend. Although Sri Lanka
has experienced lower volatility, it has higher external debt than the Like external debt, Bhutan’s GDP growth rate fluctuated a lot,
other four countries before 2001, and after 2001, it still has higher with a major upward trend starting in 1985, which reached
external debt than Bangladesh, India, and Pakistan but lower than a peak of 28.70% around 1987, then began to fall sharply to
Bhutan. Pakistan‘s external debt is lower than Sri Lanka‘s, but it 4.96% in 1988. This situation might occur due to rapid forced
has followed the same trend as Sri Lanka. India has experienced migration, which started in the late 1980s and increased further
comparatively lower debt than other South Asian countries. After between the period of 1988 and 1933, which led to violent ethnic
1984, India‘s external debt increased, which declined after 1995, unrest and anti-government protest. After that, the country
and from 2012 to 2020, its external debt was slightly higher than experienced several fluctuations in its GDP growth rates until
Bangladesh‘s. After 1995, Bangladesh experienced a declining 2019, with another major fluctuation between the period of 2006
trend in external debt until 2012, when it remained almost flat and 2008. Beyond 2019, a notable declining trend appeared,
until 2020. But after 2012, the other three countries also showed perhaps due to the start of the COVID-19 pandemic. All other
a rising trend in their external debt. countries had several up-and-down fluctuating GDP growth

Figure 1: External Debt (% of GNI)

Figure 2: GDP growth rate (%)

84 International Journal of Economics and Financial Issues | Vol 13 • Issue 1 • 2023

 Ale, et al.: Does External Debt Affect Economic Growth: Evidence from South Asian Countries

rates with a declining trend after 2019, but unlike Bhutan, no 1970 to 2009. The results show that external debt negatively
major fluctuations are notable. Sri Lanka experienced the lowest influences growth and that this negative impact can be reduced
growth rate (−1.55%) during 2001 and recovered in the next or even eliminated by using the right macroeconomic policies.
year. Bangladesh had a lower growth rate than India and Pakistan Additionally, they say that the negative effects of external debt
for some years, but again higher than those countries for other are caused by the bilateral component rather than the multilateral
periods. But after 2016, the GDP growth rate of Bangladesh component.
remains higher than other countries, with a declining trend
after 2019. Siddique et al. (2016) investigate how foreign debt affects
economic growth in highly indebted impoverished nations
2. REVIEW OF LITERATURE (HIPCs). According to the findings, debt can boost short-term
economic growth to a certain extent, which aligns with standard
Considerable research has investigated the link between external Keynesian prescriptions. Adamu and Rasiah (2016) discover
debt and economic growth. Some discovered beneficial effects, that foreign debt slows growth over time by applying an
while others concluded that foreign debts had detrimental effects ARDL bound test approach to Nigeria between 1970 and 2013.
on economic growth. Geiger (1990), for instance, examines the Moreover, in both the long and short terms, the authors’ index
effect of public debt on economic growth for nine Latin American measuring the sustainability of external debt had a favorable
nations over 12 years (1974-1986) and discovers an inverse and impact on growth.
statistically significant association between debt burden and
economic growth. The empirical studies, which use panel data analysis, evaluate
how much economic growth depends on external debt from
The main factors influencing Pakistan‘s economic growth are various angles, such as sub-Saharan Africa or deeply indebted
identified by Iqbal and Zahid (1998). To discover the negative impoverished countries. These prior studies predicted external debt
impact of foreign debt on economic growth, they use annual data elasticities have many signs and magnitudes. Furthermore, most
ranging from 1959-1960 to 1996-1997 and the OLS approach. of these publications do not consider slope and cross-sectional
dependence. To create an effective foreign debt policy considering
Using data from 1980 to 1990, Fosu (1999) evaluates the effect cross-sectional dependence for South Asian countries, a separate
of external debt on economic growth in 35 Sub-Saharan African study is necessary. In this article, we analyze the impact of external
nations. The study discovers that net outstanding loans have debt on economic growth in South Asian countries using cross-
a negative impact on economic growth, holding the amounts sectional dependence (CSD) on panel data.
of production inputs constant. Using data for 55 low-income
countries from 1970 to 1999, Clements et al. (2003) investigate The following is how the paper is organized: The empirical
the ways in which external debt influences economic growth. model and data sources are presented in Section 3, the results
They argue that larger foreign debt levels hinder economic growth are presented and analyzed in Section 4, and the conclusions are
by skewing resource allocation rather than by lowering private discussed in Section 5.
investment.
3. DATA AND MODEL FOR ESTIMATION
Furthermore, it has been discovered that public investment, a form
of indirect external debt, influences growth. Mohamed (2005) This study explores the relationships between population growth,
looks into how Sudan‘s external debt affects economic growth and foreign direct investment, gross capital formation, external debt,
uses time series data from 1978 to 2002 for the study. To describe and economic growth. All the variables‘ data is used annually and
the impact of the export promotion plan and to account for the spans the years 1980-2020. The readily available data determines
inflationary impact of macroeconomic policy, the study considers the selection of nations for the years 1980-2020. All variables‘ data
the growth rate of real export earnings. The findings suggest that is taken from the World Development Indicators (WDI) report,
external debt inhibits economic growth. Ali and Mustafa (2012) which the World Bank releases as shown in Table 1.
examine the effects of Pakistan‘s external debt on economic growth
over the long and short terms, focusing on the years 1970 to 2010. The following econometric model is considered for empirical
Their findings demonstrate that debt negatively and severely short- analysis,
term influences growth. This adverse effect is substantially less
strong in the long run. Shabbir (2013) examines how external debt
affects economic growth in 70 emerging nations. He discusses the Table 1: Description of variables and sources
period from 1976 to 2011. The analysis uses estimation for both Symbol Variables Source
RGDP Real GDP WDI, World Bank
fixed and random effects. External debt and economic growth are
ED External debt as a percentage WDI, World Bank
found to be negatively correlated. They also discover that debt of gross national income
can reduce the resources available to support private investment K Capital formation as a WDI, World Bank
in these nations. percentage of GDP
FDI Foreign direct investment as WDI, World Bank
Ramzan and Ahmad (2014) use the ARDL technique to assess a percentage of GDP
the effect of Pakistan‘s external debt on economic growth from POP Population growth rate WDI, World Bank

International Journal of Economics and Financial Issues | Vol 13 • Issue 1 • 2023 85

 Ale, et al.: Does External Debt Affect Economic Growth: Evidence from South Asian Countries

EGit = β0 + β1 EDit + β 2 K it + β3 FDI it + β 4 Popit + ε it  (1) Table 2: Results of cross‑sectional dependence (CD)
Panel Data Model Freidman Frees Pesaran
where, EG, ED, K, FDI, and Pop denote economic growth rate (1937) (1995) (2004)
as an annual percentage gross domestic product (GDP), external Fixed effect estimation 82.911*** 0.395*** 5.143***
debt as a percentage of gross national income, capital formation Random effect estimation 89.245*** 0.489*** 5.678***
as a percentage of GDP, foreign direct investment as a percentage ***, ** and * are significant at 1%, 5% and 10% respectively
of GDP and population growth rate, respectively. Here, i stands
for countries and t stands for time. Finally, an idiosyncratic error Table 3: Results of homogeneity tests
term is presented by εit. Test Pesaran and Blomquist and
Yamagata (2008) Westerlund (2013)
4. EMPIRICAL RESULTS Delta 1.921* 2.564***
Delta (small 2.080** 2.776***
sample adjusted)
To determine whether cross-sectional dependence exists, Friedman
***, ** and * are significant at 1%, 5% and 10% respectively
(1937), Frees (1995), and Pesaran (2004) are used. Table 2’s
findings from the three cross-sectional dependence tests under
estimations for random and fixed effects demonstrate that, in Table 4: Results of cross‑sectionally augmented panel unit
all models, the null hypothesis of no cross-sectional reliance is root test of Pesaran (2007)
rejected at least at a 5% significance level. As a result, cross- Variable CIPS (Level) CIPS (1st difference)
sectional dependence is taken into account in this study‘s unit Without With Without With
root and cointegration tests. trend trend trend trend
RGDP −4.859*** −4.481*** −9.001*** −8.486***
ED 1.385 1.305 −6.056*** −5.276***
Using the adjusted delta tilde test proposed by Pesaran and
K −0.892 −1.091 −6.361*** −5.677***
Yamagata (2008) and Blomquist and Westerlund (2013), we study FDI −2.569** −3.657*** −8.305*** −7.386***
the cointegrating coefficients‘ slope homogeneity. Pesaran and POP −0.433 −1.512* −2.897*** −1.818***
Yamagata’s (2008), and Blomquist and Westerlund’s (2013) test for *** indicates 1% significance level. Optimum lag length is chosen by the Schwarz
homogeneous slopes of the coefficients are comfortably rejected. Information Criterion (SIC)
For this reason, we consider heterogeneous panel cointegration
tests to estimate the model. In Table 3, the outcomes are displayed. impact of external debt, Keynesian economists have focused on
developing policies to reduce the adverse effects of debt. But we
We use a cross-sectionally augmented panel unit root test created cannot be as neutral as the Ricardian view—that external debt is a
by Pesaran (2007) to identify the unit root issue in the panel data. future tax, and therefore we are neutral regarding the debt-growth
Results of the unit root test are shown in Table 4. It demonstrates relationship (Barro, 1990).
that all variables—aside from external debt (ED) and capital
formation (k)—are stationary at a level, except those two variables The debt overhang dilemma is a channel through which external debt
becoming stationary at the first difference. Each variable is accumulation hampers economic growth by hampering investment
therefore integrated in the order I (1). over time. A debt overhang dilemma could be a significant factor
in this inverse effect of external debt on economic growth. Several
In Table 5, the estimated results about the impacts of external debts studies have provided evidence regarding this, like Cordella et
on economic growth both in short run and long run for selected al. (2005), Daka et al. (2017), Matuka and Asafo (2018), Nor-
the five selected South Asian countries are represented. Eddine and Chkiriba, 2019, etc. Disregarding the methodologies,
the findings of current studies are also similar to the findings by
The economic growth of selected South Asian countries is found to Geiger (1990) in the case of 9 Latin American countries, by Iqbal
be significantly negatively affected by external debt. An increased and Zahid (1998) in the case of Pakistan, etc. But as opposed to the
share of external debt in a country‘s national income significantly findings of Ali and Mustafa (2012), who stated a strong negative
negatively affects the economic growth of that country. This effect in the short run and a weaker negative in the long run for
negative effect is found to persist both in the short run and in the Pakistan, and Siddique et al. (2016), who found a positive effect
long run across all baseline and extended models with a similar in the short run but a negative effect in the long run for Nigeria,
magnitude of effects. this study concluded the persistent of significant negative effects
both in the short run and in the long run. In contrast, some studies
This means that external debt is hampering the economic growth provide evidence that external debt stimulates economic growth,
of Bangladesh, India, Pakistan, Bhutan, and Sri Lanka in both including Siddiqui and Malik (2001), Talreja et al. (2016), Lau and
the short run and the long run. The higher the external debt in a Kon (2014), Chaudhry et al. (2017), etc.
country, the lower its economic growth will be. These findings
are consistent with the theoretical predictions of classical and Among other control variables, foreign direct investment affects
neoclassical views that external debt hampers economic growth economic growth negatively. The higher the percentage of foreign
in the long run by discouraging investment. The short-run findings direct investment in a country‘s GDP, the lower the country‘s
are similar to Keynesian predictions. Considering the short-run economic growth will be both in the short and long run. The effects

86 International Journal of Economics and Financial Issues | Vol 13 • Issue 1 • 2023

 Ale, et al.: Does External Debt Affect Economic Growth: Evidence from South Asian Countries

Table 5: Results of cross‑sectional dependence autoregressive distributed lag model (CS‑ARDL)

RGDP CS‑ARDL CS‑ARDL CS‑ARDL CS‑ARDL
Short‑run Estimate
Error Correction −1.244***(0.00) −1.241***(0.00) −1.234***(0.00) −1.268***(0.00)
∆ED −0.011***(0.00) −0.008**(0.02) −0.009**(0.01) −0.009**(0.01)
∆K −0.004 (0.47) −0.003 (0.53) −0.004 (0.44)
∆FDI −0.005** (0.02) −0.005** (0.02)
∆POP −0.123 (0.87)
Long‑run Estimate
ED −0.009*** (0.00) ‑0.007** (0.03) −0.008** (0.01) −0.008** (0.01)
K −0.004 (0.396) −0.004 (0.57) −0.004 (0.39)
FDI −0.004** (0.01) −0.004** (0.02)
POP 0.008 (0.99)
Constant −0.24*** (0.00) −0.24*** (0.00) −0.23*** (0.00) −0.27*** (0.00)
Observations 194 194 194 194
Country 5 5 5 5
P‑values are represented in the parenthesis. ***, ** and * represents that coefficient are significant at 1%, 5% and 10% respectively

of capital formation (K) and population growth rate on economic significant negative error correction coefficients. These ensure
growth in South Asian countries are found to be insignificant. The that any short-run economic shocks will be adjusted in the long
results remain the same in the short run and the long run. These run. In the baseline model, the error correction coefficient is
insignificant effects imply that population growth rate and capital found to be-1.244, implying that per year, economic shocks in
formation (percentage of GDP) do not contribute to the economic the short run revert to the long run equilibrium by 124.4 percent.
growth of Bangladesh, India, Pakistan, Bhutan, and Sri Lanka The disequilibrium adjustment rates remain almost similar in the
during the concerned sample period. extended models with additional control variables.

The general view of the economic growth increasing effects of

5. CONCLUSION
FDI could be confronted by the possibility that a part of FDI may
have detrimental effects on economic growth. In the case of South
For a long time, the relationship between external debt and economic
Asian countries, Chaudhury et al. (2020) find that the composition
growth has attracted the attention of researchers and policymakers.
of FDI is crucial to determining whether the effects of FDI are
It has become crucial, particularly after the 1980‘s global debt
growth enhancing or not. They estimated that while overall FDI
crisis. Previous studies conducted to understand the relationship
increases economic growth significantly, FDI in secondary sectors
have found both positive and negative effects of external debt
hampers economic growth. Thus, FDI should attract targeted
on economic growth. Findings varied due to the use of several
sectors to ensure enough domestic investment.
countries, different techniques, different periods, and applying
The analysis finds no evidence of a relationship between gross different techniques. Most studies examined the relationship at the
capital formation and economic growth. Our results are in line with country level, mainly using time series data and techniques.
research by Yasmeen et al. (2021), who used data from Pakistan,
and Hartwig (2010), who used data from OECD countries, both This study contributes to the existing literature by examining the
of which conclude that capital formation does not affect economic relationship between five South Asian countries, i.e., Bangladesh,
growth. Our results, however, differ from those of Dash (2021) and India, Pakistan, Bhutan, and Sri Lanka, from 1980-2020. The
Meyer and Sanusi’s (2019) investigations, which suggest that capital application of advanced panel econometrics techniques, namely
formation contributes positively to economic growth. According to the panel autoregressive distributed lag (ARDL) approach, reveals
Dash (2021), financial sector growth, financial aid, trade openness, the effects of external debt on economic growth both in the short
and gross capital accumulation are necessary for South Asian run and in the long run. The estimated negative error correction
countries sustained economic advancement. The study also reveals coefficients, which are highly significant, confirm a long-run
an insignificant impact of population growth on economic growth relationship between economic growth and external debt, and other
in South Asian countries. This contrasts the general belief and variables are established. It is found that external debt significantly
Malthusian theoretical predictions that population growth negatively negatively affects countries‘ economic growth in the short and long
effects per capita income and human development (Johnson, 1999; run. Among other control variables, only foreign direct investment
Schultz, 2003). But our results are similar to the findings of Thornton affects economic growth significantly, but the effect is negative.
(2001), who also found an insignificant long-run relationship Moreover, the effects of capital formation (K) and population
between population growth and economic growth for seven Latin growth rate on economic growth in South Asian countries are
American countries. Therefore, in line with Thornton (2001), it could found to be insignificant both in the short and long run.
be explained that due to inflationary pressure, population growth
does not affect economic growth. Hence, South Asian countries should be very conscious of the
use of external debt. They should reduce the use of external debt
This study establishes a long-run relationship between economic by encouraging domestic savings and investment. While it is not
growth, external debt, and other variables through the highly possible to restrict the use of external debt, countries should look

International Journal of Economics and Financial Issues | Vol 13 • Issue 1 • 2023 87

 Ale, et al.: Does External Debt Affect Economic Growth: Evidence from South Asian Countries

for appropriate ways to mitigate the negative effects of external Iqbal, Z., Zahid, G.M. (1998), Macroeconomic determinants of economic
debt on economic growth; to identify possible channels to convert growth in Pakistan. The Pakistan Development Review, 37(2),
the deteriorating effects of external debt into a beneficial one. 125-148.
Johnson, G.D. (1999), Population and economic development. China
Economic Review, 10(1), 1-16.
REFERENCES Krugman, P. (1988), Financing vs. forgiving a debt overhang. Journal of
Development Economics, 29(3), 253-268.
Adamu, I.M., Rasiah, R. (2016), External debt and growth dynamics in Lau, E., Kon, T.L. (2014). External debt, export and growth in Asian
Nigeria. African Development Review, 28(3), 291-303. countries: 1988-2006. Journal of Applied Sciences, 14(18), 2170-
Al Kharusi, S., Ada, M.S. (2018), External debt and economic growth: 2176.
The case of emerging economy. Journal of Economic Integration, Maghyereh, A., Hashemite, U. (2003), External debt and economic
33(1), 1141-1157. growth in Jordan: The threshold effect. Economia Internazionale/
Ali, R., Mustafa, U. (2012), External debt accumulation and its impact on International Economics, 56(3), 337-355.
economic growth in Pakistan. The Pakistan Development Review, Matuka, A., Asafo, S.S. (2018), External Debt and Economic Growth in
51(4), 79-96. Ghana: A Co-integration and a Vector Error Correction Analysis,
Barro, R.J. (1990), Government spending in a simple model of endogenous MPRA Paper No. 90463. University of Macerata: Macerata, Italy.
growth. Journal of Political Economy, 98(5), S103-S126. Meyer, D.F., and Sanusi, K.A. (2019), A causality analysis of the
Berensmann, K. (2004), New ways of achieving debt sustainability beyond relationships between gross fixed capital formation, economic growth
the enhanced HIPC Initiative. Intereconomics, 39(6), 321-330. and employment in South Africa. Studia Universitatis Babes-Bolyai
Blomquist, J., Westerlund, J. (2013), Testing slope homogeneity in large Oeconomica, 64(1), 33-44.
panels with serial correlation. Economics Letters, 121(3), 374-378. Mohamed, M.A.A. (2005), The impact of external debts on economic
Chaudhry, I.S., Iffat, S., Farooq, F. (2017), Foreign direct investment, growth: An empirical assessment of the Sudan: 1978-2001. Eastern
external debt and economic growth: Evidence from some selected
Africa Social Science Research Review, 21(2), 53-66.
developing countries. Review of Economics and Development
Nor-Eddine, O., Chkiriba, D. (2019), External public debt and economic
Studies, 3(2), 111-124.
growth in Morocco: Assessment and impacts. Global Journal of
Chaudhury, S., Nanda, N., Tyagi, B. (2020), Impact of FDI on economic
Management and Business Research, 19(1), 39-48.
growth in South Asia: Does nature of FDI matters? Review of Market
Pesaran, M.H. (2004), General Diagnostic Tests for Cross Section
Integration, 12(1-2), 51-69.
Dependence in Panels, Cambridge Working Papers in Economics,
Clements, B., Bhattarcharya, R., Nguyen, T.Q. (2003), External Debt,
0435. Cambridge, England: University of Cambridge.
Public Investment, and Growth in Low-income Countries. IMF
Pesaran, M.H. (2007), A simple panel unit root test in the presence of
Working Paper No. 03/249. Washington, DC: International Monetary
cross‐section dependence. Journal of Applied Econometrics, 22(2),
Fund.
265-312.
Cohen, D. (1995), Large external debt and (slow) domestic growth a
Pesaran, M.H., Yamagata, T. (2008), Testing slope homogeneity in large
theoretical analysis. Journal of Economic Dynamics and control,
panels. Journal of Econometrics, 142(1), 50-93.
19(5-7), 1141-1163.
Cordella, T., Ruiz-Arranz, M., Ricci, L.A. (2005), Debt Overhang or Debt Ramzan, M., Ahmad, E. (2014), External debt growth nexus: Role of
Irrelevance? Revisiting the Debt-Growth Link, IMF Working Paper macroeconomic policies. Economic Modeling, 38, 204-210.
No. WP/05/223. Washington, DC: International Monetary Fund. Sachs, J.D. (1989), Conditionality, debt relief, and the developing
Daka, L., Kapena, S., Fandamu, H., Phiri, C. (2017), The impact of country debt crisis. In: Developing Country Debt and Economic
external debt on Zambia’s economic growth: An ARDL approach. Performance. Vol. 1. The International Financial System. Chicago,
Journal of Economics and Sustainable Development, 8(8), 55-68. Illinois: University of Chicago Press. p.255-296.
Dash, A.K. (2021), Does foreign aid influence economic growth? Schultz, T.P. (2003), Human Resources in China: The Birth Quota,
Evidence from South Asian countries. Transnational Corporations Returns to Schooling, and Migration (Discussion Paper No. 855).
Review. Oxfordshire: Taylor and Francis. p1-14. Yale University. New Haven: Economic Growth Center.
Easterly, W. (2002), How did heavily indebted poor countries become Shabbir, S. (2013), Does External Debt Affect Economic Growth:
heavily indebted? Reviewing two decades of debt relief. World Evidence from Developing Countries (No. 63). Karachi, Pakistan:
development, 30(10), 1677-1696. State Bank of Pakistan, Research Department.
Fosu, A.K. (1999), The external debt burden and economic growth Siddique, A., Selvanathan, E.A., Selvanathan, S. (2016), The impact
in the 1980s: Evidence from sub-Saharan Africa. Canadian of external debt on growth: Evidence from highly indebted poor
Journal of Development Studies/Revue Canadienne D’études Du countries. Journal of Policy Modeling, 38(5), 874-894.
Développement, 20(2), 307-318. Siddiqui, R., Malik, A. (2001), Debt and economic growth in South Asia.
Frees, E.W. (1995), Assessing cross-sectional correlation in panel data. The Pakistan Development Review, 40(4), 677-688.
Journal of Econometrics, 69(2), 393-414. Talreja, K.H., Shaikh, Z.A., Rahpoto, M.S., Shaikh, N.A. (2016),
Friedman, M. (1937), The use of ranks to avoid the assumption of Empirical analysis of factors affecting economic growth in Pakistan.
normality implicit in the analysis of variance. Journal of the American SALU Commerce and Economic Review, 2(2), 34-43.
Statistical Association, 32, 675-701. Thornton, J. (2001), Population growth and economic growth: Long-run
Geiger, L.T. (1990), Debt and economic development in Latin America. evidence from Latin America. Southern Economic Journal, 68(2),
The Journal of Developing Areas, 24(2), 181-194. 464-468.
Gunter, B.G. (2002), What’s Wrong with the HIPC initiative and what’s Yasmeen, H., Tan, Q., Zameer, H., Vo, X.V., Shahbaz, M. (2021),
next? Development Policy Review, 20(1), 5-24. Discovering the relationship between natural resources, energy
Hartwig, J. (2010), Is health capital formation good for long-term consumption, gross capital formation with economic growth: Can
economic growth? Panel Granger-causality evidence for OECD lower financial openness change the curse into blessing. Resources
countries. Journal of Macroeconomics, 32(1), 314-325. Policy, 71, 102013.

88 International Journal of Economics and Financial Issues | Vol 13 • Issue 1 • 2023