The Impact of External Debt on Economic Growth and Private Investment in Ethiopia
| dc.contributor.advisor | Estipanos, Girma ((PhD) | |
| dc.contributor.author | Ayalew, Hailemariam | |
| dc.date.accessioned | 2021-11-26T06:08:52Z | |
| dc.date.accessioned | 2023-11-04T10:32:03Z | |
| dc.date.available | 2021-11-26T06:08:52Z | |
| dc.date.available | 2023-11-04T10:32:03Z | |
| dc.date.issued | 2010-06 | |
| dc.description.abstract | Ethiopia, one of the highly indebted poor countries, has continued to experience difficulties in managing and servicing its huge stocks of external debt. Consequently, there have been significant net outflow of resources to meet the debt obligations. Hence, the main focus of the study is to examine the impact of external debt on economic growth and private investment of Ethiopia using a co integrated VAR model over the period 1960/61 to 2008/09. The result of co integration test, using Johansen Maximum likelihood approach, indicates the existence of long run relation ship among the variables entered in both growth and private investment models. The estimated short run models points out the current level of external debt flow has a positive while the past debt accumulation has a negative impact on economic growth and private investment of Ethiopia. This confirms the existence of debt overhang hypothesis in the Ethiopian economy. However, in the long run both external debt stock as well as total debt servicing have a negative and significant impact on economic growth and private sector capital accumulation activity. On the other hand, debt cancellation appears to have a positive contribution to economic growth and private in vestment of Ethiopia. Hence, mitigate the problems of external finance, external borrowing decisions must be linked to a general policy frame work that will guarantee profitability of invested funds and generation of sufficient foreign exchange earnings for external debt servicing. Besides, creating credibility including political will to reforms is required to spur investors' confidence for both local and foreign investments. | en_US |
| dc.identifier.uri | http://etd.aau.edu.et/handle/123456789/28965 | |
| dc.language.iso | en | en_US |
| dc.publisher | A.A.U | en_US |
| dc.subject | Economic Growth | en_US |
| dc.subject | Impact of External Debt | en_US |
| dc.subject | Private Investment in Ethiopia. | en_US |
| dc.title | The Impact of External Debt on Economic Growth and Private Investment in Ethiopia | en_US |
| dc.type | Thesis | en_US |