{"id":6772,"date":"2021-10-06T10:44:15","date_gmt":"2021-10-06T02:44:15","guid":{"rendered":"https:\/\/www.ukm.my\/jem\/?post_type=article&#038;p=6772"},"modified":"2022-07-27T06:37:45","modified_gmt":"2022-07-26T22:37:45","slug":"the-effect-of-foreign-debt-on-the-economic-growth","status":"publish","type":"article","link":"https:\/\/www.ukm.my\/jem\/article\/the-effect-of-foreign-debt-on-the-economic-growth\/","title":{"rendered":"The Effect of Foreign Debt on the Economic Growth"},"content":{"rendered":"<p><em>This study examines the effect of foreign debt on the economic growth. Using a time series Indonesian data over 1981 &#8211; 2017, we employ the Error Correction Model based on the debt overhang theory. Foreign debt was found to produce negative and significant effect on the economic growth both in the short- and long-run. The paper further found that Foreign Direct Investment (FDI) improves the economic growth. Foreign debt that continues to increase drastically in the long-run could slow down the economic growth which may indicate the economy experiencing a debt overhang. It is thus imperative for the government to ensure the debt ratio remain below a certain threshold. Further, foreign debt should be prioritized to develop infrastructure with a broad multiplier effect and the FDI likewise prioritized for labor-intensive sectors.<\/em><\/p>\n","protected":false},"template":"","tags":[186,606,1352,426,387],"jel-code":[1353,1354,1355],"article-type":[1329],"class_list":["entry","author-asriwn","post-6772","article","type-article","status-publish","tag-economic-growth","tag-error-correction-model","tag-foreign-debt","tag-foreign-direct-investment","tag-indonesia","jel-code-e22","jel-code-f34","jel-code-o47","article-type-normal-article"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The Effect of Foreign Debt on the Economic Growth | Jurnal Ekonomi Malaysia<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ukm.my\/jem\/article\/the-effect-of-foreign-debt-on-the-economic-growth\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Effect of Foreign Debt on the Economic Growth | Jurnal Ekonomi Malaysia\" \/>\n<meta property=\"og:description\" content=\"This study examines the effect of foreign debt on the economic growth. Using a time series Indonesian data over 1981 &#8211; 2017, we employ the Error Correction Model based on the debt overhang theory. Foreign debt was found to produce negative and significant effect on the economic growth both inContinue Reading\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.ukm.my\/jem\/article\/the-effect-of-foreign-debt-on-the-economic-growth\/\" \/>\n<meta property=\"og:site_name\" content=\"Jurnal Ekonomi Malaysia\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Jurnal-Ekonomi-Malaysia-JEM-104142808087485\" \/>\n<meta property=\"article:modified_time\" content=\"2022-07-26T22:37:45+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:site\" content=\"@EkonomiJurnal\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/article\\\/the-effect-of-foreign-debt-on-the-economic-growth\\\/\",\"url\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/article\\\/the-effect-of-foreign-debt-on-the-economic-growth\\\/\",\"name\":\"The Effect of Foreign Debt on the Economic Growth | Jurnal Ekonomi Malaysia\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/#website\"},\"datePublished\":\"2021-10-06T02:44:15+00:00\",\"dateModified\":\"2022-07-26T22:37:45+00:00\",\"breadcrumb\":{\"@id\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/article\\\/the-effect-of-foreign-debt-on-the-economic-growth\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/www.ukm.my\\\/jem\\\/article\\\/the-effect-of-foreign-debt-on-the-economic-growth\\\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/article\\\/the-effect-of-foreign-debt-on-the-economic-growth\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Articles\",\"item\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/article\\\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"The Effect of Foreign Debt on the Economic Growth\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/#website\",\"url\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/\",\"name\":\"Jurnal Ekonomi Malaysia\",\"description\":\"Universiti Kebangsaan Malaysia\",\"publisher\":{\"@id\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/#organization\",\"name\":\"Jurnal Ekonomi Malaysia\",\"url\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/#\\\/schema\\\/logo\\\/image\\\/\",\"url\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/wp-content\\\/uploads\\\/2021\\\/05\\\/cropped-browser-icon-letter-1.png\",\"contentUrl\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/wp-content\\\/uploads\\\/2021\\\/05\\\/cropped-browser-icon-letter-1.png\",\"width\":512,\"height\":308,\"caption\":\"Jurnal Ekonomi Malaysia\"},\"image\":{\"@id\":\"https:\\\/\\\/www.ukm.my\\\/jem\\\/#\\\/schema\\\/logo\\\/image\\\/\"},\"sameAs\":[\"https:\\\/\\\/www.facebook.com\\\/Jurnal-Ekonomi-Malaysia-JEM-104142808087485\",\"https:\\\/\\\/x.com\\\/EkonomiJurnal\"]}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"The Effect of Foreign Debt on the Economic Growth | Jurnal Ekonomi Malaysia","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.ukm.my\/jem\/article\/the-effect-of-foreign-debt-on-the-economic-growth\/","og_locale":"en_US","og_type":"article","og_title":"The Effect of Foreign Debt on the Economic Growth | Jurnal Ekonomi Malaysia","og_description":"This study examines the effect of foreign debt on the economic growth. 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