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External Resources and Economic Growth: An Empirical Analysis of South Asian Countries

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  • Imtiaz Arif Lubna Khan Syed Ali Raza

    (Department of Business Administration, Iqra University, Karachi, Pakistan. Department of Business Administration, Iqra University, Karachi, Pakistan. Department of Business Administration, Iqra University, Karachi, Pakistan.)

Abstract

This study aims to investigate the role of three important external resources on the economic growth of leading South Asian countries. A sample of four countries is studied from 1983 to 2014. Empirical analyses are carried out in two phases. First, we have checked the combined effect using CD test, CIPS, Pedroni, and Westerlund panel cointegration, pooled mean group (PMG) framework and Heterogeneous non-causality test. In the second phase, we compared the regional and country-wise estimations using ARDL bound testing, stability test, and Granger causality. Results suggest that remittances play a vital role in the economic growth of selected South Asian countries, whereas, imports and foreign direct investment found to be insignificant. Also, while evaluating the same model for the individual countries using the ARDL estimations also reveal that remittances significantly contribute to the economies of Pakistan and Sri Lanka and imports found to be negatively related with economic growth in the same economies. However, imports showed a strong relationship with the economic growth of Bangladesh. Thus, this paper has drawn some insights for the policymakers. JEL Classification: O, O5, O57

Suggested Citation

  • Imtiaz Arif Lubna Khan Syed Ali Raza, 2018. "External Resources and Economic Growth: An Empirical Analysis of South Asian Countries," Zagreb International Review of Economics and Business, Faculty of Economics and Business, University of Zagreb, vol. 21(2), pages 1-17, November.
    • Handle: RePEc:zag:zirebs:v:21:y:2018:i:2:p:1-17
    DOI: 10.2478/zireb-2018-0010
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    More about this item

    Keywords

    external resources; GDP; South Asian countries; cross-sectional dependence; heterogeneity; PMG framework;
    All these keywords.

    JEL classification:

    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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