Debt, economic growth and threshold effects: Evidence from developing countries

Autores
Ibañez Martín, María María; Rojas, Mara Leticia; Dabús, Carlos Darío
Año de publicación
2024
Idioma
inglés
Tipo de recurso
artículo
Estado
versión publicada
Descripción
Purpose: Most empirical papers on threshold effects between debt and growth focus on developed countries or a mix of developing and developed economies, often using public debt. Evidence for developing economies is inconclusive, as is the analysis of other threshold effects such as those probably caused by the level of relative development or the repayment capacity. The objective of this study was to examine threshold effects for developing economies, including external and total debt, and identify them in the debt-growth relation considering three determinants: debt itself, initial real GDP per capita, and debt to exports ratio. Methods: We used a panel threshold regression model (PTRM) and a dynamic panel threshold model (DPTM) for a sample of 47 developing countries from 1970 to 2019. Findings: We found (a) no evidence of threshold effects applying total debt as a threshold variable; (b) one critical value for external debt of 42.32% (using PTRM) and 67.11% (using DPTM), above which this factor is detrimental to growth; (c) two turning points for initial GDP as a threshold variable, where total and external debt positively affects growth at a very low initial GDP, it becomes non-significant between critical values, and it negatively influences growth above the second threshold; (d) one critical value for external debt to exports using PTRM and DPTM, below which external debt positively affects growth and negatively above it. Conclusions: The outcome suggests that only poorer economies can leverage credits. The level of the threshold for the debt to exports ratio is higher than that found in previous literature, implying that the external restriction could be less relevant in recent periods. However, the threshold for the external debt-to-GDP ratio is lower compared to previous evidence.
Fil: Ibañez Martín, María María. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - Bahía Blanca. Instituto de Investigaciones Económicas y Sociales del Sur. Universidad Nacional del Sur. Departamento de Economía. Instituto de Investigaciones Económicas y Sociales del Sur; Argentina
Fil: Rojas, Mara Leticia. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - Bahía Blanca. Instituto de Investigaciones Económicas y Sociales del Sur. Universidad Nacional del Sur. Departamento de Economía. Instituto de Investigaciones Económicas y Sociales del Sur; Argentina
Fil: Dabús, Carlos Darío. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - Bahía Blanca. Instituto de Investigaciones Económicas y Sociales del Sur. Universidad Nacional del Sur. Departamento de Economía. Instituto de Investigaciones Económicas y Sociales del Sur; Argentina
Materia
TOTAL DEBT
EXTERNAL DEBT
ECONOMIC GROWTH
DEVELOPING COUNTRIES
THRESHOLD EFFECTS
Nivel de accesibilidad
acceso abierto
Condiciones de uso
https://creativecommons.org/licenses/by/2.5/ar/
Repositorio
CONICET Digital (CONICET)
Institución
Consejo Nacional de Investigaciones Científicas y Técnicas
OAI Identificador
oai:ri.conicet.gov.ar:11336/244944
Acceder
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oai_identifier_str oai:ri.conicet.gov.ar:11336/244944
network_acronym_str CONICETDig
repository_id_str 3498
network_name_str CONICET Digital (CONICET)
spelling Debt, economic growth and threshold effects: Evidence from developing countriesIbañez Martín, María MaríaRojas, Mara LeticiaDabús, Carlos DaríoTOTAL DEBTEXTERNAL DEBTECONOMIC GROWTHDEVELOPING COUNTRIESTHRESHOLD EFFECTShttps://purl.org/becyt/ford/5.2https://purl.org/becyt/ford/5Purpose: Most empirical papers on threshold effects between debt and growth focus on developed countries or a mix of developing and developed economies, often using public debt. Evidence for developing economies is inconclusive, as is the analysis of other threshold effects such as those probably caused by the level of relative development or the repayment capacity. The objective of this study was to examine threshold effects for developing economies, including external and total debt, and identify them in the debt-growth relation considering three determinants: debt itself, initial real GDP per capita, and debt to exports ratio. Methods: We used a panel threshold regression model (PTRM) and a dynamic panel threshold model (DPTM) for a sample of 47 developing countries from 1970 to 2019. Findings: We found (a) no evidence of threshold effects applying total debt as a threshold variable; (b) one critical value for external debt of 42.32% (using PTRM) and 67.11% (using DPTM), above which this factor is detrimental to growth; (c) two turning points for initial GDP as a threshold variable, where total and external debt positively affects growth at a very low initial GDP, it becomes non-significant between critical values, and it negatively influences growth above the second threshold; (d) one critical value for external debt to exports using PTRM and DPTM, below which external debt positively affects growth and negatively above it. Conclusions: The outcome suggests that only poorer economies can leverage credits. The level of the threshold for the debt to exports ratio is higher than that found in previous literature, implying that the external restriction could be less relevant in recent periods. However, the threshold for the external debt-to-GDP ratio is lower compared to previous evidence.Fil: Ibañez Martín, María María. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - Bahía Blanca. Instituto de Investigaciones Económicas y Sociales del Sur. Universidad Nacional del Sur. Departamento de Economía. Instituto de Investigaciones Económicas y Sociales del Sur; ArgentinaFil: Rojas, Mara Leticia. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - Bahía Blanca. Instituto de Investigaciones Económicas y Sociales del Sur. Universidad Nacional del Sur. Departamento de Economía. Instituto de Investigaciones Económicas y Sociales del Sur; ArgentinaFil: Dabús, Carlos Darío. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - Bahía Blanca. Instituto de Investigaciones Económicas y Sociales del Sur. Universidad Nacional del Sur. Departamento de Economía. Instituto de Investigaciones Económicas y Sociales del Sur; ArgentinaEmerald Publishing2024-06-21info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionhttp://purl.org/coar/resource_type/c_6501info:ar-repo/semantics/articuloapplication/pdfapplication/pdfapplication/pdfhttp://hdl.handle.net/11336/244944Ibañez Martín, María María; Rojas, Mara Leticia; Dabús, Carlos Darío; Debt, economic growth and threshold effects: Evidence from developing countries; Emerald Publishing; Economia; 25; 1; 21-6-2024; 92-1081517-75802358-2820CONICET DigitalCONICETenginfo:eu-repo/semantics/altIdentifier/doi/10.1108/ECON-08-2023-0131info:eu-repo/semantics/altIdentifier/url/https://www.emerald.com/insight/content/doi/10.1108/ECON-08-2023-0131/full/htmlinfo:eu-repo/semantics/openAccesshttps://creativecommons.org/licenses/by/2.5/ar/reponame:CONICET Digital (CONICET)instname:Consejo Nacional de Investigaciones Científicas y Técnicas2025-09-03T09:59:28Zoai:ri.conicet.gov.ar:11336/244944instacron:CONICETInstitucionalhttp://ri.conicet.gov.ar/Organismo científico-tecnológicoNo correspondehttp://ri.conicet.gov.ar/oai/requestdasensio@conicet.gov.ar; lcarlino@conicet.gov.arArgentinaNo correspondeNo correspondeNo correspondeopendoar:34982025-09-03 09:59:28.572CONICET Digital (CONICET) - Consejo Nacional de Investigaciones Científicas y Técnicasfalse
dc.title.none.fl_str_mv Debt, economic growth and threshold effects: Evidence from developing countries
title Debt, economic growth and threshold effects: Evidence from developing countries
spellingShingle Debt, economic growth and threshold effects: Evidence from developing countries
Ibañez Martín, María María
TOTAL DEBT
EXTERNAL DEBT
ECONOMIC GROWTH
DEVELOPING COUNTRIES
THRESHOLD EFFECTS
title_short Debt, economic growth and threshold effects: Evidence from developing countries
title_full Debt, economic growth and threshold effects: Evidence from developing countries
title_fullStr Debt, economic growth and threshold effects: Evidence from developing countries
title_full_unstemmed Debt, economic growth and threshold effects: Evidence from developing countries
title_sort Debt, economic growth and threshold effects: Evidence from developing countries
dc.creator.none.fl_str_mv Ibañez Martín, María María
Rojas, Mara Leticia
Dabús, Carlos Darío
author Ibañez Martín, María María
author_facet Ibañez Martín, María María
Rojas, Mara Leticia
Dabús, Carlos Darío
author_role author
author2 Rojas, Mara Leticia
Dabús, Carlos Darío
author2_role author
author
dc.subject.none.fl_str_mv TOTAL DEBT
EXTERNAL DEBT
ECONOMIC GROWTH
DEVELOPING COUNTRIES
THRESHOLD EFFECTS
topic TOTAL DEBT
EXTERNAL DEBT
ECONOMIC GROWTH
DEVELOPING COUNTRIES
THRESHOLD EFFECTS
purl_subject.fl_str_mv https://purl.org/becyt/ford/5.2
https://purl.org/becyt/ford/5
dc.description.none.fl_txt_mv Purpose: Most empirical papers on threshold effects between debt and growth focus on developed countries or a mix of developing and developed economies, often using public debt. Evidence for developing economies is inconclusive, as is the analysis of other threshold effects such as those probably caused by the level of relative development or the repayment capacity. The objective of this study was to examine threshold effects for developing economies, including external and total debt, and identify them in the debt-growth relation considering three determinants: debt itself, initial real GDP per capita, and debt to exports ratio. Methods: We used a panel threshold regression model (PTRM) and a dynamic panel threshold model (DPTM) for a sample of 47 developing countries from 1970 to 2019. Findings: We found (a) no evidence of threshold effects applying total debt as a threshold variable; (b) one critical value for external debt of 42.32% (using PTRM) and 67.11% (using DPTM), above which this factor is detrimental to growth; (c) two turning points for initial GDP as a threshold variable, where total and external debt positively affects growth at a very low initial GDP, it becomes non-significant between critical values, and it negatively influences growth above the second threshold; (d) one critical value for external debt to exports using PTRM and DPTM, below which external debt positively affects growth and negatively above it. Conclusions: The outcome suggests that only poorer economies can leverage credits. The level of the threshold for the debt to exports ratio is higher than that found in previous literature, implying that the external restriction could be less relevant in recent periods. However, the threshold for the external debt-to-GDP ratio is lower compared to previous evidence.
Fil: Ibañez Martín, María María. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - Bahía Blanca. Instituto de Investigaciones Económicas y Sociales del Sur. Universidad Nacional del Sur. Departamento de Economía. Instituto de Investigaciones Económicas y Sociales del Sur; Argentina
Fil: Rojas, Mara Leticia. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - Bahía Blanca. Instituto de Investigaciones Económicas y Sociales del Sur. Universidad Nacional del Sur. Departamento de Economía. Instituto de Investigaciones Económicas y Sociales del Sur; Argentina
Fil: Dabús, Carlos Darío. Consejo Nacional de Investigaciones Científicas y Técnicas. Centro Científico Tecnológico Conicet - Bahía Blanca. Instituto de Investigaciones Económicas y Sociales del Sur. Universidad Nacional del Sur. Departamento de Economía. Instituto de Investigaciones Económicas y Sociales del Sur; Argentina
description Purpose: Most empirical papers on threshold effects between debt and growth focus on developed countries or a mix of developing and developed economies, often using public debt. Evidence for developing economies is inconclusive, as is the analysis of other threshold effects such as those probably caused by the level of relative development or the repayment capacity. The objective of this study was to examine threshold effects for developing economies, including external and total debt, and identify them in the debt-growth relation considering three determinants: debt itself, initial real GDP per capita, and debt to exports ratio. Methods: We used a panel threshold regression model (PTRM) and a dynamic panel threshold model (DPTM) for a sample of 47 developing countries from 1970 to 2019. Findings: We found (a) no evidence of threshold effects applying total debt as a threshold variable; (b) one critical value for external debt of 42.32% (using PTRM) and 67.11% (using DPTM), above which this factor is detrimental to growth; (c) two turning points for initial GDP as a threshold variable, where total and external debt positively affects growth at a very low initial GDP, it becomes non-significant between critical values, and it negatively influences growth above the second threshold; (d) one critical value for external debt to exports using PTRM and DPTM, below which external debt positively affects growth and negatively above it. Conclusions: The outcome suggests that only poorer economies can leverage credits. The level of the threshold for the debt to exports ratio is higher than that found in previous literature, implying that the external restriction could be less relevant in recent periods. However, the threshold for the external debt-to-GDP ratio is lower compared to previous evidence.
publishDate 2024
dc.date.none.fl_str_mv 2024-06-21
dc.type.none.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
http://purl.org/coar/resource_type/c_6501
info:ar-repo/semantics/articulo
format article
status_str publishedVersion
dc.identifier.none.fl_str_mv http://hdl.handle.net/11336/244944
Ibañez Martín, María María; Rojas, Mara Leticia; Dabús, Carlos Darío; Debt, economic growth and threshold effects: Evidence from developing countries; Emerald Publishing; Economia; 25; 1; 21-6-2024; 92-108
1517-7580
2358-2820
CONICET Digital
CONICET
url http://hdl.handle.net/11336/244944
identifier_str_mv Ibañez Martín, María María; Rojas, Mara Leticia; Dabús, Carlos Darío; Debt, economic growth and threshold effects: Evidence from developing countries; Emerald Publishing; Economia; 25; 1; 21-6-2024; 92-108
1517-7580
2358-2820
CONICET Digital
CONICET
dc.language.none.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv info:eu-repo/semantics/altIdentifier/doi/10.1108/ECON-08-2023-0131
info:eu-repo/semantics/altIdentifier/url/https://www.emerald.com/insight/content/doi/10.1108/ECON-08-2023-0131/full/html
dc.rights.none.fl_str_mv info:eu-repo/semantics/openAccess
https://creativecommons.org/licenses/by/2.5/ar/
eu_rights_str_mv openAccess
rights_invalid_str_mv https://creativecommons.org/licenses/by/2.5/ar/
dc.format.none.fl_str_mv application/pdf
application/pdf
application/pdf
dc.publisher.none.fl_str_mv Emerald Publishing
publisher.none.fl_str_mv Emerald Publishing
dc.source.none.fl_str_mv reponame:CONICET Digital (CONICET)
instname:Consejo Nacional de Investigaciones Científicas y Técnicas
reponame_str CONICET Digital (CONICET)
collection CONICET Digital (CONICET)
instname_str Consejo Nacional de Investigaciones Científicas y Técnicas
repository.name.fl_str_mv CONICET Digital (CONICET) - Consejo Nacional de Investigaciones Científicas y Técnicas
repository.mail.fl_str_mv dasensio@conicet.gov.ar; lcarlino@conicet.gov.ar
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score 13.13397

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