Foreign Borrowing Research Articles

How Much Government Debt Is Now Acceptable for Russia?

The period of near-zero interest rates is over, and the recent noticeable growth in the debt burden, as well as in the cost of interest payments to service that debt, has made it more challenging for national and global financial regulators to strike a balance between keeping budgetary parameters stable and spurring economic development. This article proposes a “safe” threshold for the debt burden such that the ac-cumulated debt would not diminish prospects for growth and degrade fiscal sustainability. A significant negative linear effect of government debt on GDP growth rates from 1980 to 2021 has been observed for a total sample of 57 countries. According to the Hansen test, there are relatively safe thresholds for high- and middle-income countries at 56% and 24% of GDP, respectively. An assessment of the impact of government debt on the dynamics of interest expense indicates that there is a stable positive relationship between them. The conclusion drawn is that the thresholds beyond which an acceleration in the growth of interest payments would produce an increase in the debt burden stand at 51% and 29% of GDP, respectively, for the same groups of countries. However, the current conditions of unprecedented sanctions that restrict access to foreign borrowing together with a double-digit key interest rate were not taken into account for calculations based on the retrospective data. When those factors are included, the authors’ projections indicate that Russia’s safe level of debt should not exceed 20% of GDP.

Capital Control Taxes in an Emerging Market Economy

Historically, Emerging Markets (EMs) that own foreign debt and exhibit a high degree of dollarization have demonstrated vulnerability to a range of both real and financial shocks. Governments often use a range of capital control measures, particularly in nations burdened with external debt, with the aim of mitigating sudden swings in both inflows and outflows of capital. These policies are implemented to lessen exchange rate volatility and prevent dollarization. This study employs second moments analysis, impulse response functions and the welfare analysis to investigate the impact of a tax policy that restricts international capital flows on several macroeconomic variables in an emerging economy. A dynamic stochastic general equilibrium (DSGE) model is employed to examine the impact of the tax imposed on foreign borrowing on the economy, including both real shocks such as technology and growth, as well as financial shocks such as country risk premium. The findings of the study indicate that capital control taxes have a diminishing effect on the variability of significant macroeconomic variables, such as investment and consumption, when imposed at lower levels. Conversely, these taxes exhibit a stabilizing impact on the volatility of the trade balance-to-output ratio when implemented at higher levels. Moreover, quantitative evidence reveals that country risk premium shocks exert a substantial influence on variations in both the trade balance-to-output ratio and the level of investment, accounting for around 25% and 50% of the fluctuations, respectively. Finally, the existence of such a taxation enhances the intertemporal utility function at the steady state and reduces its volatility in the case of technology and growth shocks.

National Identity and Foreign Borrowing in the Legal Forms of Personnel Management: History and Modernity

Relevance. The introduction of special rules for the use of foreign vocabulary in the texts of public acts, improving the form of a business letter, modifying the structure of documents in accordance with the powers of public authorities are trends in the current and past Russian administration experience. Both in the modern and historical and legal context of scientific research, it is relevant to consider state approaches in the field of regulating official paperwork, which are aimed at forming a stable management model in accordance with domestic national interests and values. The purpose of the study is to establish the relationship between elements of national identity and foreign models in the state personnel practice of document flow in Russia in the 18th century, which is useful for taking into account this experience in modern transformations of the foundations of legal and business writing.Objective: are to consider legislative innovations in terms of regulating the field of record keeping and personnel management; to identify forms of record keeping in the XVIII century and socio-political factors influencing their application; a retrospective assessment of the methodology for drafting texts of government acts.Methodology. The methodology is based on comparative legal, comparative historical, historical legal and systemic research methods.The results of the study indicate the improvement of grammatical, stylistic, translation and other business skills and competencies of personnel of public authorities. A historical and legal analysis of the directions of development of personnel management revealed an active borrowing of foreign vocabulary in the execution of administrative acts. The clerical mechanism of interdepartmental communication gradually became more complicated, and the procedure for receiving and responding to petitions from private individuals was regulated. Conclusion. The experience of forming the Russian management and personnel practice of paperwork, developing in conditions of value crises and political contradictions, is important for taking into account the political and legal measures carried out in the modern state.

Loanwords and polysemy: An investigation of specialized domain lexis in Middle English

This study investigates the polysemy of French loanwords in Middle English, analysing the attested senses of loan lexis in three occupational domains. Senses recorded in the Dictionnaire du moyen français and the Anglo-Norman dictionary were compared with corresponding lexical entries in the Middle English dictionary. Out of over 100 Middle English items borrowed from French, it is found that the great majority were polysemous in ways reflecting the source language semantics. This outcome contrasts with the usual finding that foreign borrowing in modern contexts produces monosemous loanwords. The conclusion is therefore drawn that the process of borrowing from French was of a different nature in the English medieval period. It is argued that bilingual users of French were agents of borrowing who replicated source word polysemy in their English. The likelihood that senses matching those of the French etymon arose in Middle English independently of source language polysemy is considered, but rejected.

Nexus Between Fiscal Policy Mechanism and Stock Market Output in a Growing Economy

Abstract Fiscal policy methods are critical to a country’s economic stability. However, when fiscal policy changes occur, all economic sectors react either favorably or adversely. The stock market is not spared from this reaction because it is likewise an important aspect of the economy. From 1998 through 2020, the inquiry looks at the link between fiscal policy mechanisms and stock market performance. The Levin, Lin, and Chu test is used to determine data stationarity. At zero latency, all factors remain constant. Other screening tools employed indicate that all datasets and models utilized in this work are of satisfactory quality. Pearson Product Moment Correlation (PPMC) is a statistical method used to investigate the link between fiscal policy plans and stock market results. Correlation coefficients quantify the strength of a link between two variables. The study’s findings indicate that fiscal measures such as tax income, domestic borrowing, government capital, and regular expenditure have a substantial and extremely strong positive relationship with Nigerian stock market returns. The study also indicates that foreign borrowing is harmful to Nigeria’s stock market advancement. Other data indicate that foreign borrowing has a modest to very weak link with other fiscal policy methods when compared to the outcomes of the other instruments. As a result, the report recommends increased tax income collection and a significant reduction in the country’s foreign debt.

La diplomacia económica y la deuda externa argentina durante la última dictadura militar 1976–1983

This article focuses on the evolution of Argentine debt in the light of economic policy conducted during the last military dictatorship (1976–1983). The text uses a framework of structural functionalism to analyze the decision problem faced by the Argentine generals – the need to choose measures to ensure the financial stability of the regime. The means chosen to achieve this goal was to apply for international credits. The article analyzes the factors that contributed to the dictatorship’s foreign borrowing policy, discusses the activities of Argentine economic diplomacy under the leadership of Minister Martínez de Hoz, presents the challenges in obtaining foreign credits during the presidency of Jimmy Carter in the U.S., and discusses the consequences of excessive foreign borrowings.

Domestic verses foreign borrowing: Does the mode of fiscal deficit financing matter for inflation in Sub-Saharan African countries?

The aim of this study was to analyze the relationship between fiscal deficit financing and inflation in sub-Saharan African countries and determine whether the mode of fiscal deficit financing selected in the economy matters for inflation. The panel data sourced from 45 sub-Saharan African countries from 2005 to 2020 was used for analysis with domestic and foreign borrowing as the main independent variables and the consumer price index as the dependent variable. The study used two-step GMM econometric analysis as the main econometric model with a scaling quantity analysis model to test for the relative effect of the deficit financing tools on inflation. The results show that deficit financing through foreign and domestic borrowing positively influences inflation among sub-Saharan African countries and the severity of the effect on inflation differs between the two modes of deficit financing. This is shown by the domestic borrowing's scaling quantity analysis value of 0.12 against 0.08 for the foreign borrowing. The practical implication of this study is that fiscal deficit financing is inflationary and domestic borrowing causes more inflation than foreign borrowing. Sub-Saharan African governments must therefore make efforts to reduce the fiscal deficit because of the increasing impact of the budget deficit on inflation whenever it is funded. However, foreign borrowing should be preferred to domestic borrowing because it achieves the macroeconomic goal of financing the budget deficit with a lower inflationary effect in cases where deficit financing is unavoidable.

Burden of Government Debt on Economic Development and Debt Overhang Proposition: Analysis of Empirical Evidences

The study examined empirical works on burden of government debt on economic development and debt overhang proposition: analyses of empirical evidences. It was discovered that many studies predominantly found out significant negative relationship (Ajayi & Edewusi, 2020; Matandare &Tito, 2018; Ehikioya et al., 2020; Rafindadi & Musa, 2019; Amaefule, 2018; Ay'unku & Markjackson , 2020; Yusuf & Said, 2018; Elom-Obed, 2017; Pegkas, 2018; Moussa & Shawawreh, 2017; Obisesan et al., 2019; Marafa, 2017; Idris &Ahmad, 2017; Charles & Abimbola, 2018; Akhanolu, 2018) between government debt burden and economic development while very scanty and few studies revealed a positive significant relationship (Lucky & Godday, 2017; Eke & Akujuobi, 2021;Akhanolu, 2018; Iacobo & Ialile, 2017) and non-significant relationship (Ofurum & Fubara, 2022); Mensah, 2018; Ay'unku & Markjackson, 2020) between the public debt and economic development. Several of the empirical study are not premised on debt overhang theory that goes to a great extent to explain the consequences of external debt on countries exceeding certain threshold of external debt stock with attendant consequences associated with external debt as discouraging private investors due to high tax rates in order to raise fund to compensate for the debt (Cohen, 1993). The study discovered other factors namely government expenditure, in?ation rate, interest rate, and exchange rate that have effect on economic development. The empirical studies examined recommended as follows: that borrowed funds, particularly foreign debt, should be reduced. That corruption, especially on borrowed monies, be avoided at all costs and that the government should limit foreign borrowing since it has a detrimental in?uence on the economy. That public debt not tied to investment does not contribute to economic growth of the studied country; that the government should increase efforts to increase domestic revenue sources to ?nance its growth

Capital flows to developing countries: Implications for monetary policy across the globe

AbstractThe public sectors in many developing countries receive capital inflows from advanced countries. Notably, we show that higher levels of foreign borrowing play an important role in promoting economic activity in developing countries by relieving crowding out problems from local sovereign debt. Moreover, in comparison to previous contributions, we also show how participation affects economic activity in advanced countries. Using a micro‐founded two‐country model of money and banking, we show that there are crowding‐out effects in high income economies when the advanced country funds official foreign debt. Moreover, we find that there are significant implications for the effects of monetary policy when banks in the developed world hold more official foreign debt. In addition, the typical destructive effects of money growth in developing countries are weaker in the presence of higher levels of international borrowing. By comparison, the effects of monetary stimulus in the advanced country become more pronounced as banks hold more foreign bonds. Our analysis concludes by looking at optimal debt policy. Interestingly, the results suggest that developing countries should limit their reliance on foreign capital inflows.

External Borrowing, Government Expenditure and Road Construction in Nigeria

External borrowing is a significant source of government revenue, and the increase in the levels of foreign borrowing is taken as evidence of progress toward meeting economic and infrastructure goals. Despite the massive incidence of foreign borrowings, developing nations continue to lag behind established economies in terms of quality, quantity, and accessibility to the benefits of infrastructural development. Therefore, this study analyses the effect of external borrowing on government expenditure on road construction in Nigeria. The study is anchored on the debt crowding theory. In analyzing the effect of external borrowing on macroeconomic performance in Nigeria, an Autoregressive Distributed Lag (ARDL) model framework was employed. The data for the study is a time series trend from the 1991-2022 periods. The ARDL result in the long run, external borrowing and interest rate exhibit significantly negative influence on government expenditure on road construction, as a percentage increase in both variables is seen to reduce expenditure on road construction by 0.26 and 12.3 percent respectively. Conversely, exchange rate and inflation have a significantly positive relationship with expenditure on road construction. A percentage increase in the exchange rate will increase expenditure on road construction by 1.66 percent. Similarly, a percentage increase in inflation will increase expenditure on road construction by 1.3 percent. The study indicates that the Federal Government of Nigeria must be methodical in its funding sources to provide infrastructure development facilities. While external borrowing is necessary, looking inward to create more revenue ways should be considered because it is less expensive. It was stated that foreign borrowing had a negative yet significant impact on Nigerian road construction.

ПОРІВНЯЛЬНИЙ АНАЛІЗ ЕФЕКТИВНОСТІ ОКРЕМИХ АСПЕКТІВ ЕКОНОМІЧНОЇ ТА СОЦІАЛЬНОЇ ПОЛІТИКИ У 2014–2019 РР. ТА 2019–2022 РР.

Introduction. In the periods from 2014 to 2019 and from 2019 to 2022, Ukraine implemented various economic and social policies that resulted in diverse socio-economic consequences. This article aims to conduct a comparative analysis of specific aspects of social and economic policy during these periods. Analysis of scientific research. Research on specific theoretical and practical aspects of state economic and social policy implementation in Ukraine during the periods from 2014 to 2019 and from 2019 to 2022 has been conducted by prominent scientists including S. V. Mocherny, Yu. S. Shemchushenko, O. P. Orlyuk, and others. The examination of the socio-economic consequences resulting from the implementation of economic and social policies in Ukraine during the periods from 2014 to 2019 and from 2019 to 2022 remains insufficiently explored, necessitating comprehensive scientific research in this field. The purpose of this scientific article is to investigate specific aspects of economic and social policy implemented in Ukraine during the periods from 2014 to 2019 and from 2019 to 2022. The main tasks of the article are to provide a theoretical and mathematical description of specific aspects of economic and social policy during the periods from 2014 to 2019 and from 2019 to 2022, as well as to analyze their consequences in Ukraine. Research methodology and methods. During the writing of the article, several special research methods were employed. These methods include direct observation, which involved gathering information on various indicators such as the number of points in the Corruption Perception Index (CPI) in Ukraine from 2013 to 2022, changes in real gross domestic product (GDP) from 2016 to 2020, the amount of state and state-guaranteed debt from January 2016 to January 2022, and Ukraine's position in the democracy rating from 2014 to 2022. Information processing methods were used to develop tables for calculating the growth and changes in the number of points in the CPI in Ukraine from 2013 to 2022, as well as the amount of state and state-guaranteed debt from January 2016 to January 2022. Graphical analysis was conducted to examine the dynamics of the CPI in Ukraine from 2013 to 2022, changes in GDP from 2016 to 2021, the size of the state and state-guaranteed debt from January 2016 to January 2022, and Ukraine's position in the democracy rating from 2014 to 2021. The time range for analyzing changes in GDP and the national debt was chosen by the author to minimize the impact of the acute phases of the conventional Russian-Ukrainian war during 2014-2015 and after February 24, 2022. Similarly, the time range for the CPI from 2013 to 2022 was selected to demonstrate that the conventional war does not have a decisive influence on the fight against corruption. Additionally, the time range for Ukraine's position in the Democracy Rating from 2014 to 2021 was chosen to mitigate the impact of the large-scale conventional Russian-Ukrainian war that began on February 24, 2022. Research results. According to the data from the Corruption Perception Index, it was found that effective measures were taken by the Ukrainian authorities to combat corruption during the period of 2014-2018. However, from 2019 to 2023, the progress in the fight against corruption slowed down. The analysis also demonstrates that following the cessation of active hostilities that took place between 2014 and 2015, the economic policies implemented by the state authorities facilitated consistent economic growth for sixteen quarters, spanning from 2016 to 2019. However, after a change in power occurred in 2019, economic growth shifted from positive to negative starting from 2020. During the period of 2016-2019, the government's economic policies not only focused on fostering economic growth but also aimed at reducing the external debt burden on the economy. Conversely, following the change in power in 2019, the new leadership pursued an active policy of foreign borrowing, resulting in an increase in the debt burden on the Ukrainian economy. Scientific novelty of the research results. A comparative mathematical analysis was conducted to examine specific aspects of state economic and social policies in Ukraine during the periods from 2014 to 2019 and from 2019 to 2022. Practical significance of the obtained research results. The author believes that conducting a qualitative comparative mathematical analysis of specific aspects of state economic and social policy in Ukraine during the periods from 2014 to 2019 and from 2019 to 2022 will facilitate the identification of more effective methods for implementing economic and social policies. This, in turn, will contribute to the establishment of an independent and efficient state. The article contains: formulas: 3, fig. 8, tab. 5, bibl. 24.

Bank risk-taking in emerging economies: Empirical evidence and theory

This article empirically studies the impact of foreign shocks on bank risk-taking in emerging economies. We use a country panel model for the 2001–2017 period. Using several measures of bank risk-taking, financial openness and foreign debt participation, we find if anything that the lower the financial openness in an economy, the higher the likelihood that the foreign monetary policy rate increases bank risk-taking and that the foreign debt participation reduces bank risk-taking. To provide an intuition of these results, we develop a simple small open economy model with banks facing foreign borrowing limits and taking excessive risk. The novel result is that, when the foreign borrowing limit binds, a lower foreign interest rate reduces excessive bank risk-taking. Since the foreign borrowing limit binds, the lower foreign rate does not boost bank credit but reduces bank default probability, which diminishes bank incentives to take excessive risk. Similarly, greater access to the international credit markets reduces excessive bank risk-taking.

The highs and the lows: bank failures in Sweden through inflation and deflation, 1914–1926

Abstract This paper revisits the Swedish banking crisis (1919–1926) that materialized as post-war deflation replaced wartime inflation (1914–1918). Inspired by Fisher’s “debt deflation theory,” we employ survival analysis to “predict” which banks would fail, given certain ex-ante bank characteristics. Our tests support the theory; maturity structures mattered most in a regime of falling prices, with vulnerable shorter-term customer loans and bank liabilities representing the most consistent cause of bank distress in the crisis. Similarly, stronger growth in (1) leverage, (2) weaker collateral loans, and (3) foreign borrowing during the boom were all associated with bank failure.

Effects of Government Expenditure on Foreign Exchange Reserves: Evidence for Namibia

The study empirically investigated the effects of government expenditure on FX reserves in Namibia. Using quarterly data, the study applied the Autoregressive Distributed Lag (ARDL) cointegration technique to examine the relationship between FX reserves and government expenditure, the exchange rate, external borrowing, current account balance and M2 over the period ranging from 2002 to 2020. The results show that an increase in government expenditure reduces FX reserves. Furthermore, increase in foreign debt, current account balance and M2 increases the level of FX reserves, while an appreciation of the effective exchange rate reduces FX reserves. The study, therefore, concludes that high government expenditure and increase in foreign borrowing impacts FX reserves. These findings suggest that developments in government expenditure may hinder monetary policy effectiveness. Based on these findings, the study recommends the continuation of fiscal consolidation to reduce fiscal deficits and government debt. Similarly, it is important to ensure macroeconomic balance and appropriate coordination between fiscal and monetary policies.

Modern Scientific, Technological, and Innovation Policy of Japan: An International Vector on the Example of Russia and ASEAN Countries

The article is devoted to the study of the formation and development of Japan's technological policy since the second half of the 20th century. The article shows that initially, the factor of international relations played an important role in Japanese technological policy, since for several decades it was entirely based on the strategy of foreign borrowing. At the same time, Japan carefully studied and often improved technologies borrowed from the USA and Western European countries, developing its own R&D base. Gradually, the country was able to build its own progressive scientific and technical potential and begin technological exports. International cooperation, but no longer in the form of imports but in the form of technology exports, continues to play a crucial role in Japan's innovation policy and diplomacy. As an example, some parameters of Japan's modern technological cooperation with the ASEAN states and Russia are considered. The study shows that, unlike some ASEAN countries, Russia has not been and is not a recipient of technical assistance from Japan within the framework of state official development assistance programs. In addition, the volume of Japanese technological exports to Russia is small and does not meet the interests of the Russian Federation in this aspect. The most successfully developing ASEAN countries receive significant volumes of technological exports from Japan in value terms, but they themselves, except Singapore, do not occupy a niche as technology suppliers to Japan.

Towards a New Typology of Korean Lexical Blends

The present research is devoted to neological trends in Korean and focuses especially on the new lexical blends. Languages are constantly creating new words; this is an inevitable process caused by the changes in the world we live. Blending has been considered as a minor word formation process in Korean, but nowadays blending in Korean can be viewed as a separate word formation process due to its increasing productivity and semantic change in resulting blends. This paper first discusses the status of blends in the word formation system, then the theoretical framework and the results of the analysis of Korean blends are presented. The paper analyzes from the quantitative and qualitative perspective 301 blends collected from the National Institute of the Korean Language Dictionaries of Neologisms. Our analysis of the dictionaries showed that blending has become a highly productive and common way of word formation for various lexical layers in Korean. An increasing speed of foreign borrowing, high productivity of clipping and compounding in Korean can be viewed as the factors related to this process to a certain extent. This paper proposes a classification of blends from a semantic and cognitive viewpoint (coordinative, determinative, and derived blends are based on the mirror, single-scope, double-scope, and double blending models).

External Debt Sustainability and Economic Growth in Sri Lanka

Researchers have shown an increased interest in the nexus between economic growth and foreign borrowing. This study explores the effect of external debt sustainability on Sri Lanka’s economic growth by applying a non-linear auto regressive distributed lag (NARDL) model, which allows us to decompose the effect of the debt variables into positive and negative effects, based on the annual data covering the period 1980 – 2021. The estimated NARDL model shows that external debt stock and foreign debt service payments had a robust short term and long-term effect on economic growth in Sri Lanka. The asymmetric cointegration results provide strong evidence for a long-run integration that exists between economic growth and external debt sustainability. The study discovered a strong and negative relationship between the decline in the external debt stock and economic growth, suggesting that lowering the stock of debt may boost economic growth. The study further discovered an asymmetric relationship between economic growth and debt service payments. Accordingly, an increase in debt service payments would lead to a decrease in growth, while a downward change in that would lead to an increase in growth. Concerning control variables, trade openness has a negative relationship with growth, whilst the real exchange rate indicates a positive nexus. The study also found that short-run findings are almost likely to be those in the long-run. In light of these findings, the low level of economic wellbeing in Sri Lanka can be attributed to debt overhang and the crowding out effect which discourages investment. As per the results, the real exchange rate is positive and not a significant determinant of trade balance in the short run, indicating the J-curve effect as not being valid for the case of Sri Lanka. In this context, a proper debt management mechanism should be implemented to maintain a sustainable external debt level in Sri Lanka.

Does it matter how central banks accumulate reserves? Evidence from sovereign spreads

There has been substantial research on the benefits of accumulating foreign reserves, but less on the relative merits of how these reserves are accumulated. In this paper we explore whether the form of accumulation affects country risk. We first present a model of endogenous sovereign debt defaults, where we show that reserve accumulation through the issuance of debt contingent on local output reduces spreads in a way that reserve accumulation with foreign borrowing does not. We confirm this model prediction when taking the theory to the data. These results suggest that attention should be placed on the way reserves are accumulated, a distinction that has important practical implications. In particular, our results call into question the benefits of programs of reserves strengthening through external debt such as those typically implemented by multilateral organizations.

The impact of the development of the world monetary fund on international financial and economic relations

This article raises the issue of the development of the world currency market, as well as its influence on the development of international economic relations. For a deeper understanding of this problem, the author first of all considers the concept of a monetary and financial organization, the direction of its activities and lists the leading international monetary and stock organizations, namely: the IMF, WTO, World Bank. Further, the author proceeds to a more detailed consideration of these currency and stock organizations: their functions, goals and objectives are analyzed, the structure of organizations is indicated, and historical information is given. The author also draws attention to the fact that there are special currency and stock organizations whose activities are aimed at regulating the debts of foreign borrowers (for example, the London and Paris Club of creditor banks). The author comes to the conclusion that it is thanks to the functioning of currency and stock organizations that the regulation of credit activities, trade relations between countries, their debts and financial flows between them is carried out. The author then proceeds to consider the International Monetary Fund. The article provides the history of the emergence of this organization, the share of the authorized capital. In addition, the author examines the current structure of the IMF, its functions. Particular attention is paid to the role of the IMF in currency regulation. Within the framework of this aspect, the concept of SDR (special drawing rights), its course and purpose is revealed. The role of the IMF in providing short-term and medium-term loans in case of a deficit in the state's balance of payments is considered in more detail. Such aspects as the reserve share and its size, credit shares and its framework, stand-by stand-by loans are analyzed. In the final part, the author summarizes the importance of the world currency market in the global economy and international relations.

Relationship between external debt and economic growth: panel data analysis for BRIC countries

The BRIC countries are the four largest emerging economies, accounting for a quarter of the world’stotal GDP. The external debt stock of the BRIC countries (3938 billion USD) corresponds to 46.22% ofthe total foreign debt stock of the developing countries (8520 billion USD). The role of foreign debt inthe economic development of a country is one of the most discussed and interesting topics in macroeconomicsamong researchers and politicians. Therefore, in this study, the relationship between foreign borrowingand economic growth in BRIC countries was examined. The data set used in the study belongsto the years 1990-2021 and panel cointegration method was used. As a result of the Westerlund (2007)panel cointegration test applied, a long-term relationship was found between foreign borrowing andeconomic growth variables in BRIC countries. The long-run cointegration vector was estimated with thepanel FMOLS estimator. According to our results; The long-run regression coefficient between externaldebt and economic growth in BRIC countries is -0.1108. This means that when the external debt stockin these countries increases by 1%, economic growth decreases by 0.11%. When evaluated on the basisof countries, the relationship between foreign debt and economic growth is positive for China, while therelationship is negative for Brazil, Russia and India.Key words: BRIC, External debt, economic growth, panel data analysis