Keywords
GDP per capita growth
fixed effects regression model
How to Cite
Abstract
This paper investigates the relationship between the level of external debt and economic growth in the case of 20 non-high-income Asian countries - 4 Central Asian and 16 other non-high-income Asian countries. In this paper, we use a quadratic regression specification for the macro panel data from 1995 to 2017 obtained from World Bank and UN databases to search for a threshold at which the external borrowing begins to have a negative impact on economic growth. Empirical results show the existence of an inverted U-curve relationship between external debt level and GDP per capita growth. The average external debt threshold level varies among sampled countries approximately 40-65 percent of GDP.
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