This study attempts to investigate the empirical relationship between debt and productivity and debt and investment for the Asian developing countries over the period of 1984 – 2007. Data set used in this study is taken from WDI and IFS. The study uses two methodologies for empirical investigation, first is panel fixed effect using 5 year average data on the basis of Hausman test and second methodology is GMM applied on the annual data for the larger data set and to tackle the issue of endogeniety. The study shows negative relationship between debt and investment and debt and productivity for Asian developing countries which confirms the presence of crowding out hypothesis. Further this study conclude that there is existence of non-linearity, because our coefficient of debt squared term has showed a significant sign in private investment and in productivity models. So it can be said that in case of Developing Asian countries, non-linearity exists between debt and investment and debt and productivity. Supervisor:- Dr. Attiya Yasmin Javid