Investment and Growth Dynamics: An Empirical Assessment Applied to Benin

Samaké, Issouf

doi:10.5089/9781451869804.001

Cited by 7 publications

(6 citation statements)

References 30 publications

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“…In particular, Munnell (1990) reported that for every 10% increase in public investment in economic infrastructure, GDP increased by 1.4% for the USA economy. Similar evidence of the crowding in effect of infrastructure public investment on private investment was supported in studies such as Cullison (1993), Ramirez (1996), Pereira (2001), Erden & Holcombe (2005), Samake (2008) and Sahoo et al (2010), Xiaoming Xu & Yanyang Yan (2014), among others. Empirical evidence of the crowding out effect of public investment on private investment growth is extensive (Evans & Karras, 1994;Nazmi & Ramirez, 1997;Odedokun, 1997;Ghali, 1998;Zou, 2003;Eduardo & Christian, 2011;Xiaoming Xu & Yanyang Yan, 2014).…”

Section: Literature Reviewsupporting

confidence: 59%

Public and private investment and economic growth in Zimbabwe: An empirical test

Makuyana¹,

Odhiambo²

2017

BEH

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This study performs an examination on the impact of public and private investment on economic growth and the crowding effect of public investment on private investment in Zimbabwe from 1970 to 2014. The study utilised the newly developed autoregressive distributed lag-bounds testing approach with better small sample properties than the traditional cointegration techniques. The results show that public investment has a higher short-run growth impact, but in the long run the private investment-led growth is more important. In addition, while gross public investment crowds out private investment, infrastructural public investment has a long-run crowding in effect. A non-infrastructural public investment was also reported to have a short-run crowding out effect on private investment. The results suggest that the productivity of public and private investment in Zimbabwe can be improved by cutting back on non-infrastructural public investment to basic minimum level while stimulating the growth in infrastructural public investment.

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Section: Literature Reviewsupporting

confidence: 59%

Public and private investment and economic growth in Zimbabwe: An empirical test

Makuyana¹,

Odhiambo²

2017

BEH

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“…The extant growth literature related to this research topic deals with the relation between investment and economic growth. Empirical evidence has shown that investment has a strong and positive impact on economic growth (Mohsin and Reinhart, 1990; De Long and Summers, 1991; Summers and Heston, 1991; Blomström et al ., 1996; McGrattan, 1998; Bernanke and Gürkaynak, 2001; Farmer and Lahiri, 2006; Samake, 2008). Coupled with a documented close relation between investment and savings across countries, this further implies an association between saving and economic growth (Farmer and Lahiri, 2006).…”

Section: Literature Reviewmentioning

confidence: 99%

Corporate Thrift and Economic Growth: A Comparative Study of Developing and Developed Countries

Chen

2012

J of Intl Development

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This study aims to investigate the relation between corporate saving and economic growth during the period from 1995 to 2006 in 7 developing countries and 16 developed countries. The results show that corporate savings generally add to the economic growth of developing countries regardless of legal origins. On the contrary, corporate savings generally do not contribute to the economic growth of developed countries. Developed countries with common law and Scandinavian civil law legal origins particularly see the negative relation between corporate saving and economic growth, while countries with other legal origins observe no such relation.

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“…In other words, public and private investments are complementary. Samake (2008) found that public investment crowds in private investment, and that both types of investment have a significant impact on growth in Benin. Similar evidence has also been provided for Cameroon (Ghura, 1997).…”

Section: Empirical Reviewmentioning

confidence: 99%

The Relationship Between Public Investment To GDP Ratio And External Debt Stocks In Kenya

Mweni¹

2016

IJMEI

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Debt is a two-edged sword. External borrowing for productive investment is associated with macroeconomics stability, increased domestic savings, improved welfare and enhanced debt repayment ability; while over accumulation of debt is associated with increased repayment and debt-service costs, depressed domestic investment, crowding out of private investment and increased vulnerability to debt crisis. The paper sought to establish the relationship between public investment to GDP ratio and external debt in Kenya over the period of 1972-2012. The study used time-series data for public investment, GDP, and external debt from IMF International Financial Statistics database. All data was evaluated, cross-checked, compared and critically analyzed. To ensure that the data does not violate the assumptions of classical linear regression model (CLRM) and test for stationarity, the study tested for unit tests using Augmented Dickey-Fuller (ADF). To test for the verifiability of the estimated long run model, additional diagnostic tests, notably: heteroskedasticity, autoregressive conditional heteroskedasticity (ARCH), autocorrelation and normality, were carried out before regression was used to determine the relationship between external debt and inflation. The gauge the relationship between the external debt and growth in Kenya, a simple open macroeconomic debt growth model will be applied. Regression analysis of Ordinary Least Squares (OLS) will be used to determine the relationship between public investment to GDP ratio and external debt over the 1972 and 2012 period in Kenya. The correlation findings indicated a Spearman's correlation coefficient of -0.5618 with a P value of 0.0001, implying a negative and significant correlation. The regression results show an R square of 0.0067 indicating that 0.7 percent of variations in external debt are explained by variations in total investment/GDP ratio, F statistic of 0.26 and a p value of 0.1828. The study recommends sustaining lower inflation rates through tight fiscal and monetary policies, financing of budget deficit from noninflationary sources, implementation of price stabilization program by subsiding basic food items, and effectively managing external debt.

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Investment and Growth Dynamics: An Empirical Assessment Applied to Benin

Cited by 7 publications

References 30 publications

Public and private investment and economic growth in Zimbabwe: An empirical test

Public and private investment and economic growth in Zimbabwe: An empirical test

Corporate Thrift and Economic Growth: A Comparative Study of Developing and Developed Countries

The Relationship Between Public Investment To GDP Ratio And External Debt Stocks In Kenya

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