The impacts of public investment on private investment and economic growth

Purpose The purpose of this paper is to assess both short and long-term influences of public investment on economic growth and test the hypothesis that whether public investment promotes or demotes private investment in Vietnam. Design/methodology/approach The authors use the approach of autoregressive distributed lag model and Vietnam’s macro data in the period of 1990-2016, to evaluate the short and long-term effects of public investment on economic growth and private investment. The model evaluates the impact of public investment on economic growth and private investment based on the neoclassical theories. The public investment which strongly affects economic growth is also reflected by aggregate supply and demand. Public investment directly impacts aggregate demand as a government expenditure and aggregate supply as a production function (capital factor). Findings The results from this research indicate that public investment in Vietnam in the past period does affect economic growth in the pattern of an inverted-U shape as of Barro (1990), with positive effects mostly occurring from the second year and negative effects of constraining long-term growth. Meanwhile, investment from the private sector, state-owned enterprises, and FDI has positive effects on short-term economic growth and state-owned capital stock has positive impacts on economic growth in both the short and long run. The estimated influence of public investment on private investment also shows a similar inverted-U shape in which public investment have crowding-in private investment short-term but crowding-out in the long run. Practical implications The empirical findings in this study can be used for conducting a more efficient policy in restructuring the state sector investment in Vietnam. Originality/value The main contributions in this study are: to evaluate the impacts of public investment on economic growth and private investment, the authors extracted public investment in infrastructure from aggregate investment of state sector (as previous studies used); the authors also uses state-owned capital stock variable including cumulative public investment and state-owned enterprises investment suggesting that this could control for the different orders of integration between the stock and flow variable and improve the experimental characteristics of the equation to a higher degree.

Download Full-text

Effect of Public Investment on Private Investment and Economic Growth: Evidence From Vietnam by Economic Industries

Applied Economics and Finance ◽

10.11114/aef.v5i2.2998 ◽

2018 ◽

Vol 5 (2) ◽

pp. 95 ◽

Cited By ~ 1

Author(s):

Nguyen Thi Canh ◽

Nguyen Anh Phong

Keyword(s):

Economic Growth ◽

Capital Stock ◽

Positive Impact ◽

Public Investment ◽

Private Investment ◽

Private Capital ◽

Short Term ◽

State Sector ◽

The Impact

This study is to assess the impact of public investment on private investment and economic growth in Vietnam based on data from 22 economic industries over a 27-year period (1990-2016) by applying PVAR model combined with GMM. The results show that public investment and state sector investment (including public investment and state-owned enterprise investment for production and business activities) has the same positive impact economic growth in most economic industries in the long term, but state sector investment also creates more growth effects in the short term. Public investment has a cyclical impact on private capital stock (domestic private + FDI capital stock) and FDI investment; it has the effect of boosting domestic private investment, FDI investment in the short and long term. Meanwhile, state-sector investment has decreased the private capital stock in the short term, crowds out domestic private and FDI investments in the short term, and in the long term. Both public investment and state sector investment has the effect of increasing public debt in the long term. Based on these results we have some policy recommendations to increase efficiency of public investment and state sector investment.

Download Full-text

Long-term effects of population growth on aggregate investment dynamics

African Journal of Economic and Management Studies ◽

10.1108/ajems-12-2012-0083 ◽

2015 ◽

Vol 6 (3) ◽

pp. 225-250 ◽

Cited By ~ 7

Author(s):

Simplice A. Asongu

Keyword(s):

Population Growth ◽

Public Investment ◽

Private Investment ◽

Domestic Investment ◽

Long Term Effects ◽

Content Type ◽

Vector Autoregressive ◽

Long Run ◽

Investment Dynamics

Purpose – The generation is witnessing the greatest demographic transition and Africa is at the heart of it. There is mounting concern over corresponding rising unemployment and depleting per capita income. The purpose of this paper is to examine the issues from a long-run perspective by assessing the relationships between population growth and a plethora of investment dynamics: public, private, foreign and domestic investments. Design/methodology/approach – Vector autoregressive models in the perspectives of vector error correction and short-run Granger causality are used. Findings – In the long-run population growth will: first, decrease foreign and public investments in Ivory Coast; second, increase public and private investments in Swaziland; three, deplete public investment but augment domestic investment in Zambia; fourth diminish private investment and improve domestic investment in the Congo Republic and Sudan, respectively. Practical implications – Mainstream positive linkage of population growth to investment growth in the long-term should be treated with extreme caution. Policy orientation should not be blanket, but contingent on country-specific trends and tailored differently across countries. The findings stress the need for the creation of a conducive investment climate (and ease of doing business) for private and foreign investments. Family planning and birth control policies could also be considered in countries with little future investment avenues. Originality/value – The objective of this study is to provide policy makers with some insights on how future investment opportunities could help manage rising population growth and corresponding unemployment.

Download Full-text

Analysis of Ziswaf, Production Index and Sharia Stock Index on Economic Growth

Jurnal Pasar Modal dan Bisnis ◽

10.37194/jpmb.v1i2.32 ◽

2019 ◽

Vol 1 (2) ◽

pp. 221-242

Author(s):

Purbawati Setyaningsih ◽

Roikhan Mochamad Aziz ◽

Puji Hadiyati

Keyword(s):

Economic Growth ◽

Stock Index ◽

Economic Activities ◽

Negative Effects ◽

Short Term ◽

Production Index ◽

Positive Effects ◽

Term Model ◽

Long Run

This study analyzes the influence ZISWAF, Gini ratio, the total export value, the index of industrial production, sharia stock index investment to GDP growth, in the short and long term. Qualitative data were taken from BPS, Baznas, ACT Global Waqf, the FSA from March 2006 until December 2017 using the methodology of The Error Correction Model (ECM). The results of this study indicate that the variable Gini Ratio, Ziswaf, Total exports, Production Index and Sharia Stock Index on GDP economic growth have significant and positive effects in the long term and the short term. Meaning that these variables have a relationship with GDP economic growth. If the variable decreases or slows down-then GDP economic growth also. While total exports have insignificant effects and negative effects on GDP economic growth. The R-square regression value of the long-term model produces a proportion of 96 percent, the short-term model produces a proportion of 97 percent. Both in the long-run and short-run models, the highest coefficient value is the value of the Gini ratio with 4.941522 and 0.348043. All positive coefficients, Gini ratio variables, ziswaf and production index have a significant effect on gdp, total exports and sharia stock indexes do not have a significant effect on gdp both in the long and short-term models. It implies in the future, fiscal economic policy makers to economic growth that opened a lot of employment, by encouraging resource based economic activities of Indonesia's largest export-oriented agriculture and mining. Good Corporate goverment should do so gini ratio of the areas surrounding the economy improved and people kesejahtaeraan increase.

Download Full-text

HUBUNGAN KAUSALITAS KEMISKINAN, TINGKAT PENGANGGURAN, DAN PERTUMBUHAN EKONOMI DI PROVINSI SULAWESI SELATAN

Jurnal Ekonomi Balance ◽

10.26618/jeb.v16i1.3505 ◽

2020 ◽

Vol 16 (1) ◽

pp. 13-23

Author(s):

Akhmad Akhmad

Keyword(s):

Economic Growth ◽

Economic Development ◽

Panel Data ◽

Causal Relationship ◽

Vector Autoregression ◽

Short Term ◽

South Sulawesi ◽

Long Run ◽

Short And Long Term

Economic development basically aims to increase economic growth, reduce poverty and unemployment. Therefore the research aims to find out the causal relationship between economic growth, unemployment and poverty in the Southern Province. This research used panel data of 24 districts / cities in South Sulawesi Province during 2007 to 2018, which was obtained from the Central Statistics Agency. Data were then analyzed using Vector Autoregression analysis. The results showed that shocks to economic growth have an impact on reducing unemployment and poverty rates both short and long term. Meanwhile shocks to unemployment, have an impact on increasing poverty rates in the short and long term, and have an impact on declining economic growth in the short term, but slowly economic growth returns to the balance point. Furthermore, the shock to poverty also has an impact on increasing unemployment in the short term, but slowly leads to a point of convergence in the long run. It is better to make economic growth decrease in the short term, but slowly towards the point of balance in the long run.

Download Full-text

INTERAKSI ASPEK PERMODALAN, RISIKO PEMBIAYAAN, DAN INDIKATOR MAKROEKONOMI DALAM MEMPENGARUHI PROFITABILITAS BPRS DI INDONESIA PERIODE 2014-2018

Jurnal Benefita ◽

10.22216/jbe.v5i3.5623 ◽

2020 ◽

Vol 5 (3) ◽

pp. 401

Author(s):

Feri Irawan

Keyword(s):

Economic Growth ◽

Time Series ◽

Error Correction ◽

Error Correction Model ◽

Series Data ◽

Short Term ◽

Correction Model ◽

Long Run ◽

Short And Long Term

ABSTRACTThis study aims to analyze the effect of capital aspects (CAR), financing risk (NPF) and macroeconomic variables including economic growth, inflation and the BI Rate on profitability (ROE) in the short and long term. By using time series data for the monthly period from 2013-2018 and the Error-Correction Model (ECM) and cointegration approach, it is found that CAR and NPF do not have a significant effect on ROE in the short and long term. Economic growth, inflation and the BI Rate in the short term do not have a significant effect on ROE, in the long run economic growth, inflation and the BI Rate have a significant effect on ROE. In the short term, economic growth, inflation and the BI Rate disturb the balance of profitability, but in the long run it returns to its equilibrium level. It is necessary to integrate the BPRS policy strategy in managing capital and risk with government policies related to economic growth and inflation. ABSTRACTPenelitian bertujuan menganalisis pengaruh aspek permodalan (CAR), risiko pembiayaan (NPF) dan variabel makroekonomi yang meliputi pertumbuhan ekonomi, inflasi dam BI Rate terhadap profitabilitas (ROE) dalam jangka pendek dan jangka panjang. Dengan menggunakan data time series periode bulanan dari tahun 2013-2018 dan pendekatan Error-Correction Model (ECM) dan kointegrasi, ditemukan bahwa CAR dan NPF tidak berpengaruh secara signifikan terhadap ROE dalam jangka pendek dan jangka panjang. Pertumbuhan ekonomi, inflasi dan BI Rate dalam jangka pendek tidak berpengaruh signifikan terhadap ROE, dalam jangka panjang pertumbuhan ekonomi, inflasi dan BI Rate berpengaruh signfikan terhadap ROE. Pada jangka pendek, pertumbuhan ekonomi, inflasi dan BI Rate menggangu keseimbangan profitabilitas namun dalam jangka panjang kembali pada tingkat keseimbangannya. Diperlukan pengintegrasi strategi kebijakan BPRS dalam mengelola permodalan dan risiko dengan kebijakan pemerintah terkait dengan pertumbuhan ekonomi dan inflasi.

Download Full-text

ANALISIS PERTUMBUHAN EKONOMI, KEMISIKINAN, DAN KORUPSI DI NEGARA ASEAN LOWER MIDDLE INCOME

Jurnal Kajian Ekonomi dan Pembangunan ◽

10.24036/jkep.v2i2.8969 ◽

2020 ◽

Vol 2 (2) ◽

Author(s):

Riska Dewi Putri ◽

Hasdi Aimon

Keyword(s):

Economic Growth ◽

Panel Data ◽

Variance Decomposition ◽

Var Model ◽

Short Term ◽

Middle Income ◽

Middle Income Countries ◽

Long Run ◽

Short And Long Term

This study aim to indentify and analyze responses economic growth, poverty and corruption in ASEAN lower middle income countries. Type of this research is descriptive and associative, used a secondary panel data from 2010 to 2017. This research was conducted using the Vector Autoregression (VAR) model through the analysis of Impulse Response Funtion (IRF) and Variance Decomposition (VD) to determine the variability response of a particular variable due to the shock of other variables. The results of this study indicate that: (1) Variability of economic growth is not contributed by the shock of poverty and corruption in the short term, but in the long run the variability of economic growth is contributed by the shock of poverty and corruption. (2) In the short variability of poverty is not contributed by the shock of economic growth and corruption term, but in the long run economic growth and corruption contribute to influencing poverty variability. (3) The variability of corruption is contributed by the shock of economic growth and poverty in the short and long term.

Download Full-text

Paleolithic Diet—Effect on the Health Status and Performance of Athletes?

Nutrients ◽

10.3390/nu13031019 ◽

2021 ◽

Vol 13 (3) ◽

pp. 1019

Author(s):

Barbara Frączek ◽

Aleksandra Pięta ◽

Adrian Burda ◽

Paulina Mazur-Kurach ◽

Florentyna Tyrała

Keyword(s):

Blood Pressure ◽

Body Mass ◽

Positive Impact ◽

Model Assessment ◽

Paleolithic Diet ◽

Short Term ◽

Positive Effects ◽

Short And Long Term ◽

The Impact

The aim of this meta-analysis was to review the impact of a Paleolithic diet (PD) on selected health indicators (body composition, lipid profile, blood pressure, and carbohydrate metabolism) in the short and long term of nutrition intervention in healthy and unhealthy adults. A systematic review of randomized controlled trials of 21 full-text original human studies was conducted. Both the PD and a variety of healthy diets (control diets (CDs)) caused reduction in anthropometric parameters, both in the short and long term. For many indicators, such as weight (body mass (BM)), body mass index (BMI), and waist circumference (WC), impact was stronger and especially found in the short term. All diets caused a decrease in total cholesterol (TC), low-density lipoprotein cholesterol (LDL-C), and triglycerides (TG), albeit the impact of PD was stronger. Among long-term studies, only PD cased a decline in TC and LDL-C. Impact on blood pressure was observed mainly in the short term. PD caused a decrease in fasting plasma (fP) glucose, fP insulin, and homeostasis model assessment of insulin resistance (HOMA-IR) and glycated hemoglobin (HbA1c) in the short run, contrary to CD. In the long term, only PD caused a decrease in fP glucose and fP insulin. Lower positive impact of PD on performance was observed in the group without exercise. Positive effects of the PD on health and the lack of experiments among professional athletes require longer-term interventions to determine the effect of the Paleo diet on athletic performance.

Download Full-text

Short-term and long-term international scientific mobility of Italian PhDs: An analysis by gender

Proceedings e report - ASA 2021 Statistics and Information Systems for Policy Evaluation ◽

10.36253/978-88-5518-304-8.08 ◽

2021 ◽

pp. 35-40

Author(s):

Valentina Tocchioni ◽

Alessandra Petrucci ◽

Alessandra Minello

Keyword(s):

Multinomial Logistic Regression ◽

Early Career ◽

International Mobility ◽

Short Term ◽

Host Countries ◽

Academic Mobility ◽

Positive Effects ◽

Long Run ◽

The Brain

In the last years, there has been a large increase in high-educated and high-skilled people’s mobility as a consequence of the internationalization and globalization, the weakening of research and university systems of sending countries (the “brain drain” process), the increase in skilled demand and improvements in higher education of host countries (the “brain gain” process). At the micro-level, academic mobility has positive consequences on occupational prospects and careers of researchers, both in the short- and long- run. Nevertheless, numerous research studies have demonstrated the challenges of engaging in international academic mobility for people with caring responsibilities, particularly women. Using Italian data on occupational conditions of PhDs collected in 2018 by Istat and modelling multinomial logistic regression analyses, we intend to verify if female researchers are associated with a lower international mobility irrespective their field of study, and the extent to which gender interacts differently in the various fields of study in affecting the probability of moving abroad after PhD qualification. Also, the distinction between long-term and short-term mobility, which has been mainly neglected in the literature concentrating on longer stays, has taken into account. In this respect, short-term mobility is a potentially high-value investment that may be pursued also by those researchers and scientists who cannot move for longer periods, such as women with caring responsibilities. In the literature, it is acknowledged that an experience abroad during early career may have positive effects on future occupational prospects. With our work, we intend to shed light on potential disparities on moving abroad that may exist among researchers in their early career by gender, and which could contribute to leave behind women in academia.

Download Full-text

Public and Private Investment and Economic Growth: An Empirical Investigation

Studia Universitatis Babe-Bolyai Oeconomica ◽

10.2478/subboec-2018-0010 ◽

2018 ◽

Vol 63 (2) ◽

pp. 87-106 ◽

Cited By ~ 2

Author(s):

Garikai Makuyana ◽

Nicholas M. Odhiambo

Keyword(s):

Economic Growth ◽

Positive Impact ◽

Public Investment ◽

Private Investment ◽

Current Debate ◽

Annual Data ◽

Public And Private ◽

Long Run ◽

Short Run ◽

Crowd Out

Abstract This paper provides new evidence to contribute to the current debate on the relative impact of public and private investment on economic growth and the crowding effect between the two components of investment in South Africa. Using annual data from 1970 to 2017, the study applies the recently developed Autoregressive Distributed Lag (ARDL)-bounds testing approach to cointegration. The study finds that private investment has a positive impact on economic growth both in the long run and short run, while public investment has a negative effect on economic growth in the long run. Further, in the long run, gross public investment is found to crowd out private investment, while its infrastructural component is found to crowd in private investment. The results of the study also reveal that both gross public investment and non-infrastructural public investment crowd out private investment in the short run. Overall, the study finds private investment to be more important than public investment in the South African economic growth process and that the importance of infrastructural public investment in stimulating private investment in the long run cannot be over-emphasized.

Download Full-text

Substitute or complement? The use of trade credit as a financing source among SMEs

Management Research Review ◽

10.1108/mrr-06-2015-0153 ◽

2017 ◽

Vol 40 (1) ◽

pp. 10-27 ◽

Cited By ~ 8

Author(s):

Darush Yazdanfar ◽

Peter Öhman

Keyword(s):

Fixed Effects ◽

Trade Credit ◽

Generalized Method Of Moments ◽

Short Term ◽

Content Type ◽

System Models ◽

Accounts Payable ◽

Short And Long Term ◽

Retained Earnings

Purpose This study aims to investigate trade credit as a financing source among small- and medium-sized enterprises (SMEs), particularly the influence of short-term debt, long-term debt and profitability on the use of such credit. Design/methodology/approach Ordinary least squares (OLS), fixed-effects and generalized method of moments (GMM) system models were used to analyze a large cross-sectional panel data set of 15,897 Swedish SMEs in five industry sectors for the 2009-2012 period. Findings The study provides empirical evidence that long-term debt and profitability each significantly and negatively influence trade credit (i.e. accounts payable) and that short-term debt positively influences trade credit. Notably, while trade credit seems to complement other short-term debt, it replaces long-term debt. Moreover, firm size in terms of sales is positively related and firm age is negatively related to accounts payable. Industry affiliation is another significant explanatory variable. Practical implications The results provide debt holders, potential investors, policymakers and academic researchers with insights into the relationship between trade credit demand, on the one hand, and external financing (i.e. short- and long-term debt) and internal retained earnings (i.e. profit), on the other. From a manager’s perspective, the findings may be important for decision-making regarding trade credit use. Originality/value When investigating trade credit determinants, the literature has seldom distinguished between short- and long-term debt and considered that they may influence the use of trade credit in different ways. The present study adds to the literature by using OLS, fixed-effects and GMM system models to analyze a large cross-sectoral sample in a high-tax country where both bank loans and trade credit are considered important financing instruments.

Download Full-text