Browsing by Author "Masika, Kighana Espérance"

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    Empirical Investigation of the Impact of External Debt on Economic Growth in the Democratic Republic of the Congo (DRC)
    (September, 2016) Masika, Kighana Espérance
    This study investigated the long and short-run impact of external debt on economic growth in the Democratic Republic of the Congo (DRC) from 1972 to 2012. In addition, it investigated the relationship between external debt servicing and economic growth. The theories and different empirical investigations explained that external debt can either be positively related to economic growth or negatively related depending on the economic activity in which the external debt is injected. The variables used were integrated of different order (i.e. I(0) and I(1)) based on this the Autoregressive Distributed Lag bounds test to co-integration was used for the estimation. The result showed that external debt has a negative impact on economic growth in the Democratic Republic of Congo in both the long and the short-run. This outcome was statistically significant. However, the result demonstrated that external debt servicing has a positive impact on economic growth in the long-run. Yet it has a negative impact on economic growth in the short-run. The study recommended to policy makers to use the hedging strategy when contracting the external debt.