Foreign Capital Flow in Niger: An Assessment of Impact Using System Equation Method
Affiliation(s)
1 School of Economics and Trade, Hunan University, Changsha, China. 2 School of Economics and Management, China University of Geosciences, Wuhan, China.
1 School of Economics and Trade, Hunan University, Changsha, China. 2 School of Economics and Management, China University of Geosciences, Wuhan, China.
ABSTRACT
Capital inflow is an important factor for a country’s economy. In this paper our main purpose is to investigate or to assess if the capital from abroad has a significant impact on economic growth in Niger. Our analysis takes data from 1980 to 2012 into consideration by using system equation method or the concept of cointegration and the vector error correction Model of GDP Growth Rate (GDPGR), Development Assistance (DASSIS), Foreign Direct Investment (FDI), Migrants’ Remittance (MIGREMIT), Real Exchange Rate (REEXR) and Domestic Investment (DOMINV). We pay a particular attention on the impact of Development Assistance, Foreign Direct Investment, and Migrants’ Remittance. The result of analysis shows an insignificant impact of Development Assistance (DASSIS), Foreign Direct Investment (FDI), on the growth in contrast with our expectation. Migrants’ Remittance on his side has a significant relation on GDP performance.
Capital inflow is an important factor for a country’s economy. In this paper our main purpose is to investigate or to assess if the capital from abroad has a significant impact on economic growth in Niger. Our analysis takes data from 1980 to 2012 into consideration by using system equation method or the concept of cointegration and the vector error correction Model of GDP Growth Rate (GDPGR), Development Assistance (DASSIS), Foreign Direct Investment (FDI), Migrants’ Remittance (MIGREMIT), Real Exchange Rate (REEXR) and Domestic Investment (DOMINV). We pay a particular attention on the impact of Development Assistance, Foreign Direct Investment, and Migrants’ Remittance. The result of analysis shows an insignificant impact of Development Assistance (DASSIS), Foreign Direct Investment (FDI), on the growth in contrast with our expectation. Migrants’ Remittance on his side has a significant relation on GDP performance.
Cite this paper
Ousseini, A. , Hu, X. and Aboubacar, B. (2015) Foreign Capital Flow in Niger: An Assessment of Impact Using System Equation Method. Theoretical Economics Letters, 5, 509-521. doi: 10.4236/tel.2015.54060.
Ousseini, A. , Hu, X. and Aboubacar, B. (2015) Foreign Capital Flow in Niger: An Assessment of Impact Using System Equation Method. Theoretical Economics Letters, 5, 509-521. doi: 10.4236/tel.2015.54060.
References
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http://dx.doi.org/10.1080/00220380412331293707 [30] Aboubacar, B., Xu, D. and Ousseini, A. (2014) Does Trade Openness Matter for Economic Growth in Niger? Theoretical Economics Letters, 4, 916-927. http://dx.doi.org/10.4236/tel.2014.49115 [31] Hendry, D.F. and Juselius, K. (2000) Explaining Cointegration Analysis: Part I. Energy Journal, 21, 1-42. http://dx.doi.org/10.5547/ISSN0195-6574-EJ-Vol21-No1-1 [32] Granger, C.J.W. and Swanson, N.R. (1996) An Introduction to Stochastic Unit Root Processes. Journal of Econometrics, 80, 35-62.
[1] Riddell, R.C. (2008) Does Foreign Aid Work. Oxford University Press, Oxford. [2] Sen, A. (1999) Development as Freedom. Oxford University Press, Oxford. [3] Veiderpass, A and Andersson, P. (2007) Foreign Aid, Economic Growth and Efficiency Development. Swedish Agency for Development Evaluation (SADEV) Reports 1. [4] Reddy, S.G. and Camelia, M. (2006) Development Aid and Economic Growth: A Positive Long-Run Relation. DESA Working Paper No. 29, JEL-Codes: O1, O2, O4 [5] Easterly, W., Levine, R. and Roodman, D. (2004) Aid, Policies, and Growth: Comment. American Economic Review, 94, 774-780. http://dx.doi.org/10.1257/0002828041464560 [6] Burnside, C. and Dollar, D. (2000) Aid, Policies, and Growth. American Economic Review, 90, 847-868. http://dx.doi.org/10.1257/aer.90.4.847 [7] Alesina, A. and Weder, B. (2002) Do Corrupt Governments Receive Less Foreign Aid? American Economic Review, 92, 1126-1137. http://dx.doi.org/10.1257/00028280260344669 [8] Brautigam, D. and Knack, S. (2004) Foreign Aid, Institutions, and Governance in Sub-Saharan Africa. Economic Development and Cultural Change, 52, 255-285. http://dx.doi.org/10.1086/380592 [9] Moyo, D. (2009) Dead Aid: Why Aid Is Not Working and How There is Another Way for Africa. Farrar, Straus and Giroux, New York. [10] Bauer, P.T. (1972) Dissent on Development. Harvard University Press, Cambridge. [11] Driffield, N. and Jones, C. (2013) Impact of FDI, ODA and Migrant Remittances on Economic Growth in Developing Countries: A Systems Approach. European Journal of Development Research, 25, 173-196. http://dx.doi.org/10.1057/ejdr.2013.1 [12] Pia, M.O., Madeline, Z., Jesus, C. and Roberto, C. (2010) Do Remittances Boost Economic Development? Evidence from Mexican States. Federal Reserve Bank of Dallas, Working Paper 1007 (1), 2. [13] Skeldon, R. (2002) Migration and Poverty. Asia-Pacific Population Journal, 17, 67-82. [14] Lucas, R.E.B. (2005) International Migration and Economic Development, Stockholm: Expert Group on Development Issues. Swedish Ministry for Foreign Affairs. [15] Balde, Y. (2009) Migrants’ Remittances and Economic Growth in Sub-Saharan Africa. http://www.umdcipe.org/conferences/Maastricht/conf_papers/Papers/Remittances %20and%20Growth%20in%20SSA [16] Roberts, W.B. and Banaian, K. (2004) Remittances in Armenia: Size, Impacts, and Measures to Enhance Their Contribution to Development. (Mimeo) [17] Leon-Ledesma, M., Piracha, M. and Quillin, B. (2006) Remittances, Institutions and Economic Growth. IZA Discussion Paper, Paper 2139. [18] Faini, R. (2002) Migration, Remittances, and Growth. http://www.wider.unu.edu/conference/ conference-2002-3/conference%20papers/faini.pdf [19] Faini, R. (2007) Migration, Remittances and Growth. AFD/EUDN Conference, Paris, France. [20] Ratha, D. (2003) Workers’ Remittances: An Important and Stable Source of External Development Finance. Global Development Finance, World Bank, Washington DC. [21] Bettin, G. and Zazzaro, A. (2008) Remittances and Financial Development: Substitutes or Complements in Economic Growth? Hamburg Institute of International Economics, Hamburg. [22] Miguel, L.-L. and Piracha, M. (2004) International Migration and the Role of Remittances in Eastern Europe. International Migration, 42, 65-84. http://dx.doi.org/10.1111/j.0020-7985.2004.00295.x [23] Chami, R., Fullenkamp, C. and Jahjah, S. (2005) Are Immigrant Remittance Flows a Source of Capital for Development? IMF Staff Papers, 52, 55-81. [24] Azam, J. and Gubert, F. (2006) Migrant Remittances and the Household in Africa: A Review of Evidence. Journal of African Economies, 15, 426-462. http://dx.doi.org/10.1093/jae/ejl030 [25] Ajayi, S.I. (2006) FDI and Economic Development in Africa. ADB/AERC International Conference on Accelerating Africas Development Five Years into the Twenty-First Century, Tunis, 22-24 November 2006. [26] Calvo, M.B. and Sanchez, B. (2002) Foreign Direct Investment, Economic Freedom, and Economic Growth: New Evidence from Latin America. Economics Working Paper No. 4/03, Universidad de Cartabria. [27] Akinlo, A. (2004) Foreign Direct Investment and Growth in Nigeria: An Empirical Investigation. Journal of Policy Modeling, 26, 627-639. http://dx.doi.org/10.1016/j.jpolmod.2004.04.011 [28] Ayanwale, A.B. (2007) FDI and Economic Growth: Evidence from Nigeria. African Economic Research Consortium Paper 165, Nairobi. [29] Hermes, N. and Lensink, R. (2003) Foreign Direct Investment, Financial Development and Economic Growth. Journal of Development Studies, 40, 142-153.
http://dx.doi.org/10.1080/00220380412331293707 [30] Aboubacar, B., Xu, D. and Ousseini, A. (2014) Does Trade Openness Matter for Economic Growth in Niger? Theoretical Economics Letters, 4, 916-927. http://dx.doi.org/10.4236/tel.2014.49115 [31] Hendry, D.F. and Juselius, K. (2000) Explaining Cointegration Analysis: Part I. Energy Journal, 21, 1-42. http://dx.doi.org/10.5547/ISSN0195-6574-EJ-Vol21-No1-1 [32] Granger, C.J.W. and Swanson, N.R. (1996) An Introduction to Stochastic Unit Root Processes. Journal of Econometrics, 80, 35-62.