Impact of public debt on growth in Belt & Road countries –Pre and Post Analysis of Financial Crisis 2007-2008

Abstract

The study seeks to investigate the role of external debt on the growth performance of Belt & Road countries for the pre & post financial crisis period. Using panel data methodologies like fixed effect model and GMM, the study finds a significant negative relationship between external debt and economic growth. Similarly, various specifications are estimated for robustness check like dividing the period into sub-periods, dividing the countries according to continent basis, and applying the generalized method of moment’s techniques. The robustness checks confirm the negative relationship between debt and economic growth.

Keywords: External debt, BRI, growth

JEL Classification: C33; H63; O43

DOI: 10.7176/RJFA/10-18-18

Publication date:September 30^th 2019