THE NEXUS OF EXTERNAL DEBT, PRIVATE INVESTMENT AND FINANCIAL DEVELOPMENT: EVIDENCE FROM SELECTED SACU COUNTRIES
This paper examines the dynamic causal relationship between financial development, external debt and investment in Lesotho, Namibia and Eswatini from 1980–2020 using a multivariate Granger–causality model. The study considers trade, savings and economic growth as intermittent variables in the analy...
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Faculty of Economics, University of Tuzla
2023-05-01
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| Series: | Economic Review |
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| Online Access: | https://www.er.ef.untz.ba/index.php/er/article/view/15 |
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| author | Brian Muyambiri John-Baptiste Mabejane |
| author_facet | Brian Muyambiri John-Baptiste Mabejane |
| author_sort | Brian Muyambiri |
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This paper examines the dynamic causal relationship between financial development, external debt and investment in Lesotho, Namibia and Eswatini from 1980–2020 using a multivariate Granger–causality model. The study considers trade, savings and economic growth as intermittent variables in the analysis. Adopting the autoregressive distributed lag (ARDL) bounds testing approach, the study results show that the causal relationship between financial development, external debt and investment in Lesotho, Namibia and Eswatini from 1980–2020 is country-dependent. For Eswatini, both investment and financial development Granger cause external debt, both in the short run and in the long run. However, for Lesotho and Namibia, it is the contrary, with external debt Granger causing financial development both in the short run and in the long run. The exception is Lesotho, where external debt is also found to Granger cause investment, also both in the short run and the long run. The study, therefore, concludes that for Eswatini, immense efforts in promoting investment and financial development chiefly stimulate external debt and the real sector in both the short run and the long run. For Namibia and Lesotho, external debt drives financial development. In addition, for Lesotho, external debt also drives investment.
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| format | Article |
| id | doaj-art-f50a0555bd8f4c5d9408e7962b20b52c |
| institution | Kabale University |
| issn | 1512-8962 2303-680X |
| language | English |
| publishDate | 2023-05-01 |
| publisher | Faculty of Economics, University of Tuzla |
| record_format | Article |
| series | Economic Review |
| spelling | doaj-art-f50a0555bd8f4c5d9408e7962b20b52c2025-02-11T00:32:49ZengFaculty of Economics, University of TuzlaEconomic Review1512-89622303-680X2023-05-01211THE NEXUS OF EXTERNAL DEBT, PRIVATE INVESTMENT AND FINANCIAL DEVELOPMENT: EVIDENCE FROM SELECTED SACU COUNTRIESBrian Muyambiri0John-Baptiste Mabejane1Department of Business Studies, School of Business and Management Studies, Botswana Open University, Botswana,Department of Finance; Investment Management, College of Business and Economics, University of Johannesburg, South Africa, This paper examines the dynamic causal relationship between financial development, external debt and investment in Lesotho, Namibia and Eswatini from 1980–2020 using a multivariate Granger–causality model. The study considers trade, savings and economic growth as intermittent variables in the analysis. Adopting the autoregressive distributed lag (ARDL) bounds testing approach, the study results show that the causal relationship between financial development, external debt and investment in Lesotho, Namibia and Eswatini from 1980–2020 is country-dependent. For Eswatini, both investment and financial development Granger cause external debt, both in the short run and in the long run. However, for Lesotho and Namibia, it is the contrary, with external debt Granger causing financial development both in the short run and in the long run. The exception is Lesotho, where external debt is also found to Granger cause investment, also both in the short run and the long run. The study, therefore, concludes that for Eswatini, immense efforts in promoting investment and financial development chiefly stimulate external debt and the real sector in both the short run and the long run. For Namibia and Lesotho, external debt drives financial development. In addition, for Lesotho, external debt also drives investment. https://www.er.ef.untz.ba/index.php/er/article/view/15financial developmentexternal debt investmentLesothoEswatiniNamibia |
| spellingShingle | Brian Muyambiri John-Baptiste Mabejane THE NEXUS OF EXTERNAL DEBT, PRIVATE INVESTMENT AND FINANCIAL DEVELOPMENT: EVIDENCE FROM SELECTED SACU COUNTRIES Economic Review financial development external debt investment Lesotho Eswatini Namibia |
| title | THE NEXUS OF EXTERNAL DEBT, PRIVATE INVESTMENT AND FINANCIAL DEVELOPMENT: EVIDENCE FROM SELECTED SACU COUNTRIES |
| title_full | THE NEXUS OF EXTERNAL DEBT, PRIVATE INVESTMENT AND FINANCIAL DEVELOPMENT: EVIDENCE FROM SELECTED SACU COUNTRIES |
| title_fullStr | THE NEXUS OF EXTERNAL DEBT, PRIVATE INVESTMENT AND FINANCIAL DEVELOPMENT: EVIDENCE FROM SELECTED SACU COUNTRIES |
| title_full_unstemmed | THE NEXUS OF EXTERNAL DEBT, PRIVATE INVESTMENT AND FINANCIAL DEVELOPMENT: EVIDENCE FROM SELECTED SACU COUNTRIES |
| title_short | THE NEXUS OF EXTERNAL DEBT, PRIVATE INVESTMENT AND FINANCIAL DEVELOPMENT: EVIDENCE FROM SELECTED SACU COUNTRIES |
| title_sort | nexus of external debt private investment and financial development evidence from selected sacu countries |
| topic | financial development external debt investment Lesotho Eswatini Namibia |
| url | https://www.er.ef.untz.ba/index.php/er/article/view/15 |
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