The Impact of Foreign Aid on Economic Growth of Ethiopia (Through Transmission Channels)

Fentaye setargie Ejigu

doi:doi:10.11648/j.ijber.20150403.15

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The Impact of Foreign Aid on Economic Growth of Ethiopia (Through Transmission Channels)

Fentaye setargie Ejigu

Published in International Journal of Business and Economics Research (Volume 4, Issue 3)

Received: 28 April 2015 Accepted: 11 May 2015 Published: 21 May 2015

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Abstract

The study has examined the impact of foreign aid on economic growth in Ethiopia through transmission channel (i.e through financing investment) over the period 1980/01 to 2013/14 using multivariate co integration analysis. The empirical result from the growth model shows that aid has a significant positive impact on growth in the long run. The empirical result from investment model also indicated that the positive and significant contribution of aid on investment in the long run. In other words the theoretical view of the gap models which is Aid can enhance growth by financing the saving gap is proven in this study. The growth equation further revealed that rainfall variability has a significant negative impact on economic growth. This study indicated also that the country has no problem of capacity constraint as to the flow of foreign aid.

Published in	International Journal of Business and Economics Research (Volume 4, Issue 3)
DOI	10.11648/j.ijber.20150403.15
Page(s)	121-132
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2015. Published by Science Publishing Group

Keywords

Foreign Aid, Economic Growth, Cointegration, VECM, Ethiopia

References

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APA Style

Fentaye setargie Ejigu. (2015). The Impact of Foreign Aid on Economic Growth of Ethiopia (Through Transmission Channels). International Journal of Business and Economics Research, 4(3), 121-132. https://doi.org/10.11648/j.ijber.20150403.15

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ACS Style

Fentaye setargie Ejigu. The Impact of Foreign Aid on Economic Growth of Ethiopia (Through Transmission Channels). Int. J. Bus. Econ. Res. 2015, 4(3), 121-132. doi: 10.11648/j.ijber.20150403.15

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AMA Style

Fentaye setargie Ejigu. The Impact of Foreign Aid on Economic Growth of Ethiopia (Through Transmission Channels). Int J Bus Econ Res. 2015;4(3):121-132. doi: 10.11648/j.ijber.20150403.15

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@article{10.11648/j.ijber.20150403.15,
  author = {Fentaye setargie Ejigu},
  title = {The Impact of Foreign Aid on Economic Growth of Ethiopia (Through Transmission Channels)},
  journal = {International Journal of Business and Economics Research},
  volume = {4},
  number = {3},
  pages = {121-132},
  doi = {10.11648/j.ijber.20150403.15},
  url = {https://doi.org/10.11648/j.ijber.20150403.15},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20150403.15},
  abstract = {The study has examined the impact of foreign aid on economic growth in Ethiopia through transmission channel (i.e through financing investment) over the period 1980/01 to 2013/14 using multivariate co integration analysis. The empirical result from the growth model shows that aid has a significant positive impact on growth in the long run. The empirical result from investment model also indicated that the positive and significant contribution of aid on investment in the long run. In other words the theoretical view of the gap models which is Aid can enhance growth by financing the saving gap is proven in this study. The growth equation further revealed that rainfall variability has a significant negative impact on economic growth. This study indicated also that the country has no problem of capacity constraint as to the flow of foreign aid.},
 year = {2015}
}

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TY  - JOUR
T1  - The Impact of Foreign Aid on Economic Growth of Ethiopia (Through Transmission Channels)
AU  - Fentaye setargie Ejigu
Y1  - 2015/05/21
PY  - 2015
N1  - https://doi.org/10.11648/j.ijber.20150403.15
DO  - 10.11648/j.ijber.20150403.15
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 121
EP  - 132
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20150403.15
AB  - The study has examined the impact of foreign aid on economic growth in Ethiopia through transmission channel (i.e through financing investment) over the period 1980/01 to 2013/14 using multivariate co integration analysis. The empirical result from the growth model shows that aid has a significant positive impact on growth in the long run. The empirical result from investment model also indicated that the positive and significant contribution of aid on investment in the long run. In other words the theoretical view of the gap models which is Aid can enhance growth by financing the saving gap is proven in this study. The growth equation further revealed that rainfall variability has a significant negative impact on economic growth. This study indicated also that the country has no problem of capacity constraint as to the flow of foreign aid.
VL  - 4
IS  - 3
ER  -

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Author Information

Fentaye setargie Ejigu

Department of Economics, Adigrat University, Adigrat, Ethiopia

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APA Style

Fentaye setargie Ejigu. (2015). The Impact of Foreign Aid on Economic Growth of Ethiopia (Through Transmission Channels). International Journal of Business and Economics Research, 4(3), 121-132. https://doi.org/10.11648/j.ijber.20150403.15

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ACS Style

Fentaye setargie Ejigu. The Impact of Foreign Aid on Economic Growth of Ethiopia (Through Transmission Channels). Int. J. Bus. Econ. Res. 2015, 4(3), 121-132. doi: 10.11648/j.ijber.20150403.15

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AMA Style

Fentaye setargie Ejigu. The Impact of Foreign Aid on Economic Growth of Ethiopia (Through Transmission Channels). Int J Bus Econ Res. 2015;4(3):121-132. doi: 10.11648/j.ijber.20150403.15

Copy | Download

@article{10.11648/j.ijber.20150403.15,
  author = {Fentaye setargie Ejigu},
  title = {The Impact of Foreign Aid on Economic Growth of Ethiopia (Through Transmission Channels)},
  journal = {International Journal of Business and Economics Research},
  volume = {4},
  number = {3},
  pages = {121-132},
  doi = {10.11648/j.ijber.20150403.15},
  url = {https://doi.org/10.11648/j.ijber.20150403.15},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20150403.15},
  abstract = {The study has examined the impact of foreign aid on economic growth in Ethiopia through transmission channel (i.e through financing investment) over the period 1980/01 to 2013/14 using multivariate co integration analysis. The empirical result from the growth model shows that aid has a significant positive impact on growth in the long run. The empirical result from investment model also indicated that the positive and significant contribution of aid on investment in the long run. In other words the theoretical view of the gap models which is Aid can enhance growth by financing the saving gap is proven in this study. The growth equation further revealed that rainfall variability has a significant negative impact on economic growth. This study indicated also that the country has no problem of capacity constraint as to the flow of foreign aid.},
 year = {2015}
}

Copy | Download

TY  - JOUR
T1  - The Impact of Foreign Aid on Economic Growth of Ethiopia (Through Transmission Channels)
AU  - Fentaye setargie Ejigu
Y1  - 2015/05/21
PY  - 2015
N1  - https://doi.org/10.11648/j.ijber.20150403.15
DO  - 10.11648/j.ijber.20150403.15
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 121
EP  - 132
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20150403.15
AB  - The study has examined the impact of foreign aid on economic growth in Ethiopia through transmission channel (i.e through financing investment) over the period 1980/01 to 2013/14 using multivariate co integration analysis. The empirical result from the growth model shows that aid has a significant positive impact on growth in the long run. The empirical result from investment model also indicated that the positive and significant contribution of aid on investment in the long run. In other words the theoretical view of the gap models which is Aid can enhance growth by financing the saving gap is proven in this study. The growth equation further revealed that rainfall variability has a significant negative impact on economic growth. This study indicated also that the country has no problem of capacity constraint as to the flow of foreign aid.
VL  - 4
IS  - 3
ER  -

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