Abstract
This paper observes that the effect of foreign aid on private entrepreneurship is controversial. To this end, it assesses the effect of foreign aid on private entrepreneurship development in Cameroon amongst other factors. Data was obtained from the World Bank Development Indicators (WDI) for the period 1980 to 2014.The error correction technique was used to estimate the parameters of private entrepreneurship development in Cameroon. The result showed that there is a positive and significant effect of foreign aid on private entrepreneurship in Cameroon in the long run. In addition, private entrepreneurship was found to increase with increase in real gross domestic product both in the short and long run. Government investment impacted negatively private entrepreneurship in the short and in the long run in Cameroon. From a policy perspective, an important conclusion is that government authorities should improve on the efficiency of foreign aid in order to reduce the lag time this aid takes to exert a significant effect on entrepreneurship development in Cameroon. Key words: Foreign aid, Private entrepreneurship, Error correction model, Cameroon . DOI: 10.7176/DCS/10-5-06 Publication date: May 31 st 2020
Highlights
The origins of foreign aid as an institutionalized activity dates back to the political and economic ambitions of the United States at the end of World War II
Results above show that economic growth has a positive effect on private entrepreneurship as the coefficient of LRGDP is positive
IMPLICATION This study paper set out to analyse the effect of foreign aid on private entrepreneurship amongst other variables in Cameroon
Summary
Between 1965 and 1980, the gross domestic product grew at an average annual rate of 5.1%, and at a rate of 2.3% between 1980 and 1990 To this end, Cameroon seems a good test case for determining the effects of foreign aid on private entrepreneurship and economic growth in developing countries (Mbaku, 2013). According to them good governance and institutional quality ensuresan effective use of aid and promotes investment and growth via filling development gaps of low income countries. Based on the objectives of this study, it is clear that it is a multivariate and causal research It seeks to investigate the relationship between a set of independent variables (foreign aid, government investment, interest rate, credit availability and trade openness) and a dependent variable (private entrepreneurship). The study covers the period running from 1980 to 2014 making it a 35 years study
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
