The behavior of external debt in Asian countries: evidence based on panel unit root test

Evan, Lau and Ahmad, Zubaidi Baharumshah and Siew-Voon, Soon (2013) The behavior of external debt in Asian countries: evidence based on panel unit root test. Journal of Business Economics and Management, 14 (1). pp. 5377-5394. ISSN 2029-4433

[img]
Preview
PDF
The behavior of external debt in (abstrak).pdf

Download (292kB) | Preview
Official URL: http://www.tandfonline.com/doi/abs/10.3846/1611169...

Abstract

This article investigates the mean-reverting behavior of the external debt ratio based on a clustered of 19 Asian countries from 1981 to 2010. For this purpose, we use a government’s intertemporal budget constraint (GIBC) model popularized by Hamilton and Flavin (1986). Our conclusions were drawn from panel data based tests, including the newly developed test that accounts for both cross-sectional dependency and structural breaks. Two major findings are noteworthy; first majority debt ratios in the Asian countries are affected by structural breaks. Second, we find unit root tests that do not accommodate breaks are less likely to detect mean reversion in the debt ratios. In all, our results indicate debt sustainability is a general characteristic of all the Asian countries.

Item Type: Article
Uncontrolled Keywords: external debt, mean reversion, Government Intertemporal budget Constraint(GIBC), breaks, Asian, unimas, university, universiti, Borneo, Malaysia, Sarawak, Kuching, Samarahan, ipta, education, research, Universiti Malaysia Sarawak
Subjects: H Social Sciences > H Social Sciences (General)
H Social Sciences > HG Finance
Divisions: Academic Faculties, Institutes and Centres > Faculty of Economics and Business
Depositing User: Saman
Date Deposited: 30 Mar 2017 02:27
Last Modified: 10 Oct 2017 01:47
URI: http://ir.unimas.my/id/eprint/15722

Actions (For repository members only: login required)

View Item View Item