@article{Ismael_Mahmod_Khorsheed_2024, title={External Debt and Economic Growth: Empirical Evidence from Developing Countries}, volume={8}, url={http://dx.doi.org/10.22161/ijebm.8.3.1}, DOI={10.22161/ijebm.8.3.1}, abstractNote={<jats:p>This study investigates the complex relationship between external debt and economic growth in developing countries. Utilizing a quantitative research methodology, data was collected from three selected developing countries through an online questionnaire distributed to key stakeholders, totaling 189 responses. Various statistical techniques, including t-tests, Chi-square tests, Variance Inflation Factor (VIF) assessment, Partial Least Squares Regression (PLS), and Principal Component Analysis (PCA), were employed to analyze the data. The findings reveal that moderate levels of external debt can positively impact economic growth, while excessive debt levels are detrimental. Effective debt management practices and strong institutional frameworks significantly enhance the positive effects of external debt. The study also highlights the adverse impact of external economic shocks on the debt-growth relationship. Key predictors of economic growth identified include external debt levels, debt management practices, and institutional quality. These factors underscore the importance of maintaining sustainable debt levels, implementing robust debt management strategies, and improving governance to optimize the benefits of external borrowing. The study concludes with recommendations for policymakers to maintain sustainable debt levels, negotiate favorable borrowing terms, and develop risk management strategies to mitigate external shocks. Limitations of the study include the reliance on data from three countries and the cross-sectional design. Future research should consider longitudinal studies, broader samples, sector-specific analyses, qualitative approaches, and the impact of global economic changes. Overall, this study provides valuable insights into the dynamics of external debt and economic growth in developing countries, offering guidance for policy formulation and economic planning to promote sustainable development.</jats:p>}, number={3}, journal={International Journal of Engineering, Business and Management}, publisher={AI Publications}, author={Ismael, Nechirwan Burhan and Mahmod, Shamal Hasan Obaid and Khorsheed, Hariwan Subhi}, year={2024}, pages={01–09} }