Mr. Matin Karimi, Mr. Shahzad Anwar and Mr. Usman Ali
Volume 4 Issue 2 | Jun 2021
DOI: 10.31841/KJEMS.2021.5
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Abstract
This research reviewed the determinants of economic growth in Afghanistan on the basis of endogenous and exogenous growth theories and empirical studies. The main objective of this research was to address the impact of domestic investment, export, official development assistance and import (independent variables) on the economic growth (dependent variable) in Afghanistan. This study adopted a quantitative method of Ordinary Least Square regression and Co-integration analysis to address the impact and long-run association among variables. The findings from OLS regression depicted that domestic investment, export, and imports are significantly correlated to economic growth, while foreign aid/official development assistance are insignificant. In addition to OLS regression, researcher also did Johansen Co-integration test to determine the long-run association of variables. It was found that long run relationship exists among the variables, which reaffirm that domestic investment and foreign aid are significant variables in bringing alteration in economic growth. This means that the Afghan government should emphasize on attraction of domestic capital to boost investment and achieve high economic growth as accordingly. Keywords: Economic Growth, Foreign aid, Domestic Investment, Imports, Exports and Afghanistan