Baljeet Singh

The Pacific Speed of Growth: How Fast Can it Be and What Determines it?

This study aims to test within a relatively homogeneous group of small states what differentiates the growth performance of Pacific island countries (PICs) from their peers. We find that PICs are disadvantaged by distance and hampered by lower investment and exports compared with other small island states, but greater political stability, catch-up effects from lower initial incomes, and slower population growth have helped offset some of these disadvantages. On balance, policy-related factors, together with geography-related disadvantages, have led to growth rates in PICs that are much lower than in other small states. We also examine how real exchange rate appreciation, unfavorable developments in the external trade environment, and rising international transport costs may have contributed to PICs’ slower growth over the past decade.

Output impacts of the interaction between foreign direct investment and domestic credit: case study of Pacific Island countries

Purpose This paper aims to examine the link among foreign direct investment (FDI), domestic credit expansion and economic growth for six Pacific Island countries. Design/methodology/approach Using panel data over 1982-2011, the authors relate the interaction between domestic credit to private sector and FDI to its impacts on output. This study makes use of panel cointegration and the generalized method of moments estimators. Findings The empirical results generally show that FDI and domestic credit to private sector serve as substitutes to promote output in these small economies. Such findings are robust to a number of sensitivity tests. Originality/value This study contributes to the literature by examining the interaction between domestic credit to private sector and FDI and its impact on output in small Pacific Island economies.