Determinants of External Debt in Developing Countries

Abstract

This paper investigates the determinants of external debt in developing countries. By analyzing the fixed effect model, with the panel data of 50 countries during 1996-2015, it shows that external debt has been increasing dramatically. This is because of an increase in debt accumulation in the past, public investment and exchange rate. By contrast, the pace of economic growth, inflation and net exports decreases the external debt.

Keywords

External debt, government debt, public debt developing countries

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