External Debts, Institutions and Growth in SSA

Lord Mensah, Godfred Bokpin, Eric Boachie-Yiadom

Research output: Contribution to journalArticlepeer-review

34 Citations (Scopus)

Abstract

The study investigates the impact of institutional quality on the external debt–growth nexus in SSA. Data from 36 SSA economies over the 1996–2013 periods were used. The results from the IV-System GMM imply that institutional quality has robust effects on the external debt–growth nexus. Thus, the impact of external debt on growth is through host nation’s institutional quality. However, the mediating effect of institutional quality on this nexus is up to a point. When a country is on the wrong side of the debt-laffer curve, external debt becomes irrelevant; and institutional quality can no longer help.

Original languageEnglish
Pages (from-to)475-490
Number of pages16
JournalJournal of African Business
Volume19
Issue number4
DOIs
Publication statusPublished - 2 Oct 2018

Keywords

  • Institutional quality
  • Institutions
  • Sub-Saharan Africa
  • economic growth
  • external debts
  • laffer curve

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