Foreign aid and economic growth: New evidence from a panel data approach for five South Asian countries

This paper investigates the long-run relationship between foreign aid and economic growth using a panel data set comprising of five South Asian economies. Using the recently developed panel unit root tests, mean group and pooled mean group estimation techniques on cross-country panel data, the paper finds support of the theoretical hypothesis of a positive relationship between aid and GDP growth. [Copyright &y& Elsevier]