The Behaviour of Private and Public Investment in Malawi

Mataya, Charles; Veeman, Michele M.

doi:10.2307/136083

Cited by 8 publications

(7 citation statements)

References 2 publications

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“…4 Nevertheless, there have been some contributions over the years (see World Bank, 2005;Caseroa and Varoudakis, 2004;Devarajan, Easterly, and Pack. 1999;Gunning and Mengistae, 1999;Mataya and Veeman, 1996;Oshikoya, 1994;and Khan and Reinhart, 1990).…”

mentioning

confidence: 99%

Investment and Growth Dynamics: An Empirical Assessment Applied to Benin

Samaké

2008

IMF Working Papers

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This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author and are published to elicit comments and to further debate. We investigate the nexus of public and private investment and assess the impact of both types of investment on growth. Using annual data for 1965-2005, we employ a coherent set of structural VAR outputs to model investment and growth in Benin. We find that in addition to institutional and regulatory developments, public investment and private capital formation facilitated by access to financial services have a significant impact on growth. The analysis supports the crowding-in effect of public investment. It also confirms that the slow pace of improvement in Benin's economic freedom index, which reflects its relatively weak institutions and slow pace of reform, deters private investment. From the cointegration regressions, the speed-of-adjustment analysis suggests that 27 percent of the deviation of GDP from its long-run equilibrium is corrected every year, which implies that it takes two to three years to cut the gap in half.

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confidence: 99%

Investment and Growth Dynamics: An Empirical Assessment Applied to Benin

Samaké

2008

IMF Working Papers

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“…In a nearly similar study to Ndovorwi's for Turkey, Chhibber and van Wijnbergen (1992) 1 , found out that, with a three year lag, an increase in the share of infrastructure investment in public investment has a positive impact on private investment. Mataya and Veeman (1996) However, their results suggest that public investment is not influenced by expected output.…”

Section: Introductionmentioning

confidence: 93%

“…Furthermore, the level of depreciation for both private and public investment will be arbitrarily set as 10 percent. Heller (1975) as quoted in Mataya and Veeman (1996) takes the approach to understanding the public investment as assuming that the behaviour of the public sector reflects the actions of a set of public decision makers giving the example of a Council of Ministers. Taking the stance that the public decision maker arrives at his decision taking the same steps as taken by the private investor(as above) with the exception of an allowance for autonomous investment we get the following model:…”

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confidence: 99%

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The Causal Relationship between Private and Public Investment in Zimbabwe

Muyambiri

2012

BJEMT

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The study examines the relationship between private and public investment in Zimbabwe utilizing yearly time series data for the period 1970 to 2007. Emphasis is placed on the direction of causality and the effect of the two types of investment on each other. The paper constructs empirical models for both private and public investment, based on the flexible accelerator theory. Private investment is found to be cointegrated with public investment. A cointergration approach and VEC model are employed to assess the short run relationship existing between public and private investment. The relationship between private and public investment is found to be insignificant and the direction of causality found to be unidirectional. The results support the notion that private investment precedes public investment.

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“…5;2014 growth. The authors who have contributed to investment analysis in Africa are: Oshikoya (1994), Mlambo and Oshikoya (1999), Devarajan et al (1999), Mataya and Veeman (1996), Khan and Reinhart (1990), and Gunning and Mengistae (1999). Writing on the macroeconomic determinants of domestic private investment in Africa, Oshikoya (1994) found a positive relationship between public investment and private investment.…”

Section: Review Of the Literaturementioning

confidence: 99%

Private and Public Investment in Africa: A Time-Series Cross-Country Analysis

Tchouassi¹,

Ngwen²

2014

IJEF

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Times-series cross-country approach is used to empirically investigate the relationship between private investment and public investment. We use panel data for the period 1980-2010. Independent variables like public investment, gross domestic product, trade openness, external debt stocks, domestic credit to private sector are integrated in the model. This helps to take into account the impact of gross domestic product, external debts stocks and domestic credit policy on how public investment affects private investment. Empirical results of this paper demonstrate that these independent variables (except, credit to private sector) are significant at 1% level and that the associate parameter η is equal to -66.972 means that public investment negatively affect private investment. Public investment crowds out private investment. There is a substitution effect between private investment and public investment. Improvements in public expenditures may not directly increase private investment.

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The Behaviour of Private and Public Investment in Malawi

Cited by 8 publications

References 2 publications

Investment and Growth Dynamics: An Empirical Assessment Applied to Benin

Investment and Growth Dynamics: An Empirical Assessment Applied to Benin

The Causal Relationship between Private and Public Investment in Zimbabwe

Private and Public Investment in Africa: A Time-Series Cross-Country Analysis

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