Relative Effectiveness of Various Development Finance Flows: A Comparative Study
Kye Woo Lee and
KDI Journal of Economic Policy, 2018, vol. 40, issue 3, 91-115
This paper aims to identify the most effective mode of development finance flows for the economic growth of middle-income developing and least developed countries, separately. It also attempts to confirm whether governance has any significant role in the causal relationship between development finance flows and economic growth. Policymakers in each developing country should select the most effective modality of development finance inflows among the different modalities (such as Official Development Assistance (ODA) grants, Official Development Assistance (ODA) loans, FDI, and international personal remittances) and expand it for their economic growth. Dynamic panel regression models were used on 48 least developed countries and 89 middle-income developing countries, respectively, during the Millennium Development Era: 2000-2015. The empirical analysis results show that ODA grants and remittances were most effective in promoting economic growth for least developed countries, while FDI was most effective for middle-income developing countries. These findings were not affected by the status of governance of the individual country.
Keywords: ODA Grants; ODA Loans; FDI; Remittances; Economic Growth; Least Developed Countries; Effectiveness; Middle-income Developing Countries (search for similar items in EconPapers)
JEL-codes: C36 F24 G15 O11 P45 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:zbw:kdijep:200828
Access Statistics for this article
KDI Journal of Economic Policy is currently edited by Dongseok Kim
More articles in KDI Journal of Economic Policy from Korea Development Institute (KDI) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().