Abstract
Recent studies have shown that foreign aid can have either a positive or a negative impact on economic growth. Due to this lack of general consensus the effectiveness of foreign aid for economic growth remains a contentious issue. This paper estimates a structural VECM for the period 1971-2009 and examines the long-run relationship between foreign aid and economic growth of an aid-dependent Asian economy, Cambodia. Johansen cointegration test indicates a significantly positive long-run effect of foreign aid on economic growth of Cambodia for the period of study.
Keywords
- Unit Root Test Search this journal for Unit Root Test (opens in a new tab)
- VECM Search this journal for VECM (opens in a new tab)
- Time-Series Search this journal for Time-Series (opens in a new tab)
- Cointegration Test Search this journal for Cointegration Test (opens in a new tab)
- Long-Run Effects Search this journal for Long-Run Effects (opens in a new tab)
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Copyright (c) 2013 Rajarshi Mitra (Author)
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Keywords
- Unit Root Test Search this journal for Unit Root Test (opens in a new tab)
- VECM Search this journal for VECM (opens in a new tab)
- Time-Series Search this journal for Time-Series (opens in a new tab)
- Cointegration Test Search this journal for Cointegration Test (opens in a new tab)
- Long-Run Effects Search this journal for Long-Run Effects (opens in a new tab)
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Vol. 5 No. 2 (2013)
Monetary Union, Behavioural Markets & Service Quality
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