Does Debts Foster Economic Growth?: The Experience of Malaysia

Lau, Evan and Choong, Chee-Keong and Liew, VK and Puah, Chin-Hong (2010) Does Debts Foster Economic Growth?: The Experience of Malaysia. African Journal of Business Management, 4 (8). pp. 1564-1575. ISSN 1993-8233

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The study examines the effect of different types of debts on the economic growth in Malaysia during the sample period 1970 - 2006. Using cointegration test, the findings suggest that all components of debts have a negative effect on long-run economic growth. In addition, the Granger causality test reveals the existence of a short-run causality linkage between all debt measures and economic growth in the shortrun. The policy conclusion is that an increase in foreign debt level adversely influences economic performance, whereas the decline in the rate of economic growth weakens the ability of the country to service its debt.

Item Type: Article
Uncontrolled Keywords: Debts, economic growth, debt overhang, cointegration, causality, unimas, university, universiti, Borneo, Malaysia, Sarawak, Kuching, Samarahan, ipta, education, research, Universiti Malaysia Sarawak.
Subjects: H Social Sciences > HC Economic History and Conditions
Divisions: Academic Faculties, Institutes and Centres > Faculty of Economics and Business
Faculties, Institutes, Centres > Faculty of Economics and Business
Depositing User: Karen Kornalius
Date Deposited: 23 Apr 2015 07:42
Last Modified: 14 Apr 2016 00:57

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