Megatrends and Interdependence of the Loan Aid-Capital Investment Links Across Developing Regional Country Blocs Theory and Evidence
Based on a novel theoretical framework with a dual-objective donor giving grant (driven by benevolent objective) and loan aid (profitability motive), as well as a public private partnership-like investment structure and multi-region feedback mechanism, we estimate a panel structural VAR model of grant aid, loan aid, private consumption, and aggregate capital stock using data of nine developing regional country blocs covering the 1961-2017 period. By allowing for cross-heterogeneity and interdependencies across regions, we identify empirical commonalities and differences across regions. Amidst a generally weak aid-investment link, we find loan aid to Granger cause capital accumulation, and among African regions, it is the most (least) productive– in terms of within-and spillover effects– in the IGAD (ECOWAS) region. In addition, our results suggest deeper regional integration between the Sub-Saharan African regions than the collective Latin American & Caribbean regions and the two Southern Asian regions (Southeast Asia and South Asia) examined
Year of publication: |
[2022]
|
---|---|
Authors: | Lim, King Yoong ; liu, Chunping |
Publisher: |
[S.l.] : SSRN |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Lim, King Yoong, (2021)
-
Lim, King Yoong, (2024)
-
Aid and developing regional integration
Lim, King Yoong, (2024)
- More ...