Affiliation:
1. Economic and Business Policy Department, Nigerian Institute of Social and Economic Research, Ibadan, Nigeria
Abstract
The global financial crisis of 2007 gave a major boost to the debt-investment
nexus debate given the astronomical growth in external debt and its
associated debt servicing burdens, which constrain the fiscal space of many
developed and emerging economies. Hence, this study examined the effect of
external debt and debt servicing on investment in MINT countries for the
period, 1990-2021 using the FMOLS estimation technique. The results show
that external debt adversely affects investment in Indonesia but stimulates
investment in T?rkiye while debt servicing has a catastrophic effect on
investment in Indonesia and T?rkiye but enhances investment in Nigeria.
Overall, the effect of external debt and debt servicing on investment in
MINT countries are mixed. Hence, the policymakers in each country need to
put measures in place to foster debt sustainability, ensure effective
domestic resource mobilisation for investment purposes and promote debt
transparency by adopting effective debt management practices.
Publisher
National Library of Serbia
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