| Author: | Savvides, A. |
| Title: | Investment Slowdown in Developing Countries during the l980s: Debt Overhang or Foreign Capital Inflows? |
| Journal: | Kyklos
1992 : VOL.45, p.363-378 |
| Index terms: | DEBT FINANCING ECONOMIC PERFORMANCE FOREIGN INVESTMENT |
| Language: | eng |
| Abstract: | According to the debt overhang hypothesis, the external debt burden provides a strong disincentive to domestic capital formation. A simultaneous limited-dependent variable model is estimated, in which the debt burden and investment rates of LDCs are jointly determined. The results confirm that debt overhang has a strong negative effect on investment rates, while foreign capital inflows exert only slight effect. |
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