Barre, Galad Mohamed (2023) The Relationship Between Foreign Aid and Economic Growth: Empirical Evidence from Somalia. nternational Journal of Sustainable Development and Planning.
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Abstract
The purpose of this research investigation is to determine the effect of Sweden aid, UK aid,
and US aid with control variables including the capital, and labor on economic growth utilizing
Somalia data for the years 1989 to 2017. the study checked unit root problem by using both
Phillips Perron (PP) and Augmented Dickey Fuller (ADF) bounds testing approach were
employed to model the long-run and short-run cointegrations of the scrutinized variables and
also the study uses the J & J cointegrating to regress for the long-run estimation. The study's
empirical findings revealed that the variables had a long cointegration. It was discovered that
while UK aid has no noticeable long-term relationship with economic growth in Somalia,
whereas Swedish aid and US aid contribute the economic growth of Somalia. There are
indications that Swedish assistance will boost long-term economic growth. Similarly, US aid
is indicated to contribute to long-term gross domestic product (GDP), but UK aid has an
insignificant impact on economic growth because UK aid relates mostly to military aid
compared to those two other countries. Capital is also seen to contribute to long-term gross
domestic product (GDP) which is suggesting that capital growth is more responsive to
economic growth than other variables. While labor is also seen to contribute to long-term gross
domestic product. Therefore, policymakers should establish a strategy to growth the economy
by promoting the economy's most important drivers, such as exchange rates, capital, and
inflation, and address drivers that impede the country's economic growth, such as the labor
force.
| Item Type: | Article |
|---|---|
| Subjects: | A General Works > AC Collections. Series. Collected works |
| Divisions: | Faculty of Management Sciences |
| Depositing User: | Unnamed user with email crd@smiad.edu.so |
| Date Deposited: | 20 Sep 2025 11:23 |
| Last Modified: | 20 Sep 2025 11:23 |
| URI: | https://repository.simad.edu.so/id/eprint/334 |
