Macroeconomic Determinants of Economic Growth in Developing-8 Countries: Panel Cross-Sectionally Augmented ARDL
DOI:
https://doi.org/10.15408/sjie.v15i2.50607Keywords:
gross domestic product growth, external debt, exchange rates, inflation, balance of tradeAbstract
Research Originality: This research is original in its examination of the impact of macroeconomic determinants on economic growth in Developing-8 countries, which accounts for cross-sectional dependence and country heterogeneity.
Research Objectives: The study aims to analyze the short-run and long-run effects of external debt, exchange rates, foreign direct investment, inflation, and balance of trade on economic growth in selected Developing-8 countries over the period 1997–2024.
Research Methods: The study employs a Cross-Sectionally Augmented ARDL model combined with the Error Correction Model by using secondary panel data from six members of the Developing-8 countries to capture dynamic relationships and long-run equilibrium, supported by unit root, cross-sectional dependence, and robustness tests.
Empirical Results: The findings indicate that external debt and exchange rates have positive short-run effects on growth, while inflation and the trade balance have negative immediate effects. Foreign domestic investment shows no significant short-run effect but becomes positive in the long run, and the error correction term confirms a stable long-run relationship.
Implications: The results suggest that policymakers should ensure sustainable external debt management, maintain exchange rate stability, enhance the effectiveness of foreign domestic investment, and control inflation to support long-term economic growth in Developing-8 countries.
JEL Classification: E31, F31, F34, O47
How to Cite:
Nehe, R. L., & Suhartoko, Y. B. (2024). Macroeconomic Determinants of Economic Growth in Developing-8 Countries: Panel Cross-Sectionally Augmented ARDL. Signifikan: Jurnal Ilmu Ekonomi, 15(2), 339-354. https://doi.org/10.15408/sjie.v15i2.50607.
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