The Effects of Capital Flows on Economic Growth in Senegal

Samuel Adams; Edem Kwame Mensah Klobodu; Richmond Odartey Lamptey

doi:10.1177/0973801016687869

The Effects of Capital Flows on Economic Growth in Senegal

Samuel Adams, Edem Kwame Mensah Klobodu, Richmond Odartey Lamptey

Research output: Contribution to journal › Article › peer-review

10 Citations (Scopus)

Abstract

This article examines the effects of capital flows on economic growth in Senegal using autoregressive distributed lag (ARDL) over the period 1970–2014. Overall, our results show that remittances cause economic growth in Senegal in the long run. In contrast, external debt has a negative impact on economic growth. The ARDL results, however, show no cointegration between aid and growth or between foreign direct investment (FDI) and growth. The Quandt–Andrews breakpoint test selects year 1991 as the most likely breakpoint location for the remittances–growth equation. Finally, time-varying parameter analyses using the year 1991 as a slope dummy reveal that remittances have been growth-enhancing post-1991. Therefore, government and policy makers in Senegal must create a favourable atmosphere for attracting more remittances to promote economic development.

Original language	English
Pages (from-to)	121-142
Number of pages	22
Journal	Margin
Volume	11
Issue number	2
DOIs	https://doi.org/10.1177/0973801016687869
Publication status	Published - 4 Apr 2017
Externally published	Yes

Keywords

Africa
Autoregressive Distributed Lags
Capital Flows
Economic Growth
Granger Causality Test
Senegal

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1177/0973801016687869

Cite this

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title = "The Effects of Capital Flows on Economic Growth in Senegal",

abstract = "This article examines the effects of capital flows on economic growth in Senegal using autoregressive distributed lag (ARDL) over the period 1970–2014. Overall, our results show that remittances cause economic growth in Senegal in the long run. In contrast, external debt has a negative impact on economic growth. The ARDL results, however, show no cointegration between aid and growth or between foreign direct investment (FDI) and growth. The Quandt–Andrews breakpoint test selects year 1991 as the most likely breakpoint location for the remittances–growth equation. Finally, time-varying parameter analyses using the year 1991 as a slope dummy reveal that remittances have been growth-enhancing post-1991. Therefore, government and policy makers in Senegal must create a favourable atmosphere for attracting more remittances to promote economic development.",

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AU - Adams, Samuel

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AU - Lamptey, Richmond Odartey

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N2 - This article examines the effects of capital flows on economic growth in Senegal using autoregressive distributed lag (ARDL) over the period 1970–2014. Overall, our results show that remittances cause economic growth in Senegal in the long run. In contrast, external debt has a negative impact on economic growth. The ARDL results, however, show no cointegration between aid and growth or between foreign direct investment (FDI) and growth. The Quandt–Andrews breakpoint test selects year 1991 as the most likely breakpoint location for the remittances–growth equation. Finally, time-varying parameter analyses using the year 1991 as a slope dummy reveal that remittances have been growth-enhancing post-1991. Therefore, government and policy makers in Senegal must create a favourable atmosphere for attracting more remittances to promote economic development.

AB - This article examines the effects of capital flows on economic growth in Senegal using autoregressive distributed lag (ARDL) over the period 1970–2014. Overall, our results show that remittances cause economic growth in Senegal in the long run. In contrast, external debt has a negative impact on economic growth. The ARDL results, however, show no cointegration between aid and growth or between foreign direct investment (FDI) and growth. The Quandt–Andrews breakpoint test selects year 1991 as the most likely breakpoint location for the remittances–growth equation. Finally, time-varying parameter analyses using the year 1991 as a slope dummy reveal that remittances have been growth-enhancing post-1991. Therefore, government and policy makers in Senegal must create a favourable atmosphere for attracting more remittances to promote economic development.

KW - Africa

KW - Autoregressive Distributed Lags

KW - Capital Flows

KW - Economic Growth

KW - Granger Causality Test

KW - Senegal

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The Effects of Capital Flows on Economic Growth in Senegal

Abstract

Keywords

UN SDGs

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