Private and Public Investment Linkages: Some Evidence Using Sectoral Level Data

This study empirically investigates the relationship between public and private investment in Pakistan at the aggregate and sectoral level, including the sectors of Agriculture, Manufacturing, Finance, Construction, Transport & Communication and Mining & Quarrying. For this purpose, annual time series data is utilized from 1971 to 2019 except for the Agriculture sector covering the period of 1981-2019 as data for previous years is not available from any published sources. Multivariate co-integration approach and ECM are employed to empirically analyze the existence of long-run and short-run association among public and private investment. The results indicate a long run complementary type relationship of public investment with private investment at both the aggregate and sectoral level except for the Finance sector. The short-run analysis supports this long-run positive association at an aggregate level and four sectors, excluding Transport & Communication and Agriculture sector where the results were insignificant. Our results and generally declining share of public investment highlight that the government is playing its role as an “enabler” (or facilitator) of private investment in terms of association between public and private investment.

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Infrastructural Investments and Economic Growth: Evidence from Pakistan

Journal of Business and Social Review in Emerging Economies ◽

10.26710/jbsee.v7i3.1845 ◽

2021 ◽

Vol 7 (3) ◽

Author(s):

Muhammad Ayub ◽

Rabia Rasheed ◽

Rashid Ahmad ◽

Furrukh Bashir

Keyword(s):

Economic Growth ◽

Time Series Data ◽

Private Investment ◽

Series Data ◽

Water Projects ◽

Public And Private ◽

The Public ◽

Long Run ◽

Short Run ◽

Adf Test

Purpose: The goal of this study is to make an attempt to find out the relationships between infrastructural investments and economic growth. Design/Methodology/Approach: The study employs time series data over the years from 1972 to 2020. To observe the long-run and short-run impact of infrastructural investments on economic growth, an ARDL modeling approach to co- integration is used that is most suitable technique over some other techniques of integration after inspecting the stationary level of data via ADF test. Findings: The findings of the study indicate that Investments on Railways, Roads, Gas Projects, Telecommunication, Water Projects and Power Projects appear as efficient factors for enhancing economic growth of Pakistan in the long run. Implications/Originality/Value: It is suggested that government should increase the public and private investment for development of Railways, Roads, Telecommunication and Water projects in Pakistan.

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Macroeconomic, Political, And Institutional Determinants of Private Investment In Ethiopia: A Dynamic Analysis

10.21203/rs.3.rs-952451/v1 ◽

2021 ◽

Author(s):

Hulunayen Yizengew Mekonnen ◽

Yohannes Kefale Mogess

Keyword(s):

Time Series Data ◽

Public Investment ◽

Private Investment ◽

Real Effective Exchange Rate ◽

Series Data ◽

Long Run ◽

Institutional Determinants ◽

Short Run ◽

Private Investors ◽

Investment Growth

Abstract This article investigates the macroeconomic, political, and institutional determinants of private investment in Ethiopia based on a time series data from 1985 to 2018. We apply ARDL approach to Co-integration to investigate the long-run and short run outcomes. The result reveals that real GDP has positive significant effect on private investment growth in both long run and short run while public investment has a crowding-out effect in short run but crowding-in effect in the long run. Real interest rate has a significant negative effect on private investment growth in long run unlike its short run effect. Hence, we recommend more effort has to be excreted to increase the market-size and real income of the people to promote private investment. Secondly, public investment in infrastructures is crucial to attract private investors though public investment in sectors that compete directly with the private sector retard private investment growth. Thirdly, given the negative significant effect of real effective exchange rate on private investment, devaluation is not a long-lasting solution to promote private investment unless the marshal-learner condition is satisfied. Fourthly, the government has to ensure consistent management strategies to minimize corruption, violent uprisings, and bureaucratic inefficiencies to build up confidence of private investors.

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ANALISIS PENGARUH REMITANSI, INVESTASI ASING LANGSUNG, IMPOR DAN PERTUMBUHAN EKONOMI DI INDONESIA

Jurnal Kajian Ekonomi dan Pembangunan ◽

10.24036/jkep.v2i4.10383 ◽

2020 ◽

Vol 2 (4) ◽

Author(s):

Regina Septriani Putri ◽

Ariusni Ariusni

Keyword(s):

Economic Growth ◽

Foreign Direct Investment ◽

Direct Investment ◽

Time Series Data ◽

Positive Impact ◽

Series Data ◽

Long Run ◽

Short Run ◽

The Government ◽

Positive Effect

Abstract : This study examined and analysis the effect of remittances, foreigndirect investment, imports, and economic growth in Indonesia in the long run andshort run. This study using Error Correction Model (ECM) method and using theannual time series data from 1989 to 2018. This study found that: (1) remittancehave an insignificant positive effect on economic growth in the long run and shortrun,(2)foreign direct investment have a significant positive impact on economicgrowth in the long run and short run, (3) import have an insignificant positiveimpact on economic growth both in the long run and short run. To increase theeconomic growth in the future, this study suggests the government to decresingimports of consume goods and increasing the inflow of capital goods, rawmaterial goods, remittances and foreign direct investment.Keyword : Remittance, Foreign Direct Investment, Import, Economic Growth andECM

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An Econometric Validation of Malthusian Theory: Evidence in Nigeria

Signifikan Jurnal Ilmu Ekonomi ◽

10.15408/sjie.v7i1.6461 ◽

2018 ◽

Vol 7 (1) ◽

pp. 77-90

Author(s):

Musa Abdullahi Sakanko ◽

Joseph David

Keyword(s):

Population Growth ◽

Food Production ◽

Time Series Data ◽

Control Measure ◽

Series Data ◽

Long Run ◽

Short Run ◽

The Government ◽

Bound Test ◽

Malthusian Theory

Rising population is an asset, provided, the skills of the workforce are used to the maximum extent. If not appropriately channelized, it can be a liability for a nation. A skilled and hardworking population can emerge as a foundation for a country’s development. This study examines the validity of Malthusian Theory in Nigeria using time series data from 1960 to 2016, employs the ARDL bound test techniques. The result shows that in the long-run, population growth and food production move proportionately, while population growth poses a depleting effect on food production in the short-run, thus validating the incidence of Malthusian impact in Nigerian economy in the short-run. The researcher recommended the government should strategize plans, which will further intensify family planning and birth control measure, compulsory western education and revitalization of the agricultural sector.DOI: 10.150408/sjie.v7i1.6461

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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.

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Does public investment crowd-out private investment in India

Journal of Financial Economic Policy ◽

10.1108/jfep-02-2016-0016 ◽

2017 ◽

Vol 9 (1) ◽

pp. 50-69 ◽

Cited By ~ 5

Author(s):

Shanmugam Muthu

Keyword(s):

Public Investment ◽

Private Investment ◽

Infrastructure Investment ◽

Public Infrastructure ◽

Public And Private ◽

Content Type ◽

Macroeconomic Uncertainty ◽

Long Run ◽

Short Run

Purpose The purpose of this paper is to examine the crowding-in or crowding-out relationship between public and private investment in India. Design/methodology/approach The autoregressive distributed lag (ARDL) bounds testing approach is used to estimate the long run relationship between public and private investment using annual data from 1971-1972 to 2009-2010. Findings Based on the empirical findings, it is observed that aggregate public investment has a positive effect on private investment both in the long run and the short run. In contrast to the findings of previous studies, no significant impact of public infrastructure investment on private investments is found in the long run, while non-infrastructure investment has a positive impact on private investment in the short run. Among the various categories of infrastructure sector, a positive and significant impact in the case of electricity, gas and water supply is observed. Similarly, the result indicates that public investment in machinery and equipment and construction have substantially influenced the private sector machinery and equipment in the long run and the short run. In the case of the role of macroeconomic uncertainty, the results find a negative and significant impact on private investment and the impact is higher in the short run than in the long run. Originality/value The present study extends the literature in three important ways: First, the study attempts to capture heterogeneity of public investment as well as disaggregate effects of two different categories of public infrastructure on private investment. The extent to which two different types of public assets impact the private investment in machinery and equipment investment is also examined. Second, ARDL model is used to examine the long-run relationship between public and private investment. Third, the study incorporates macroeconomic uncertainty into the empirical analysis to examine the role of macroeconomic volatility in determining private investment decision.

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Determinants of Private Investment in Pakistan

Journal of Economic Impact ◽

10.52223/jei0301212 ◽

2020 ◽

Vol 2 (3) ◽

pp. 86-92

Author(s):

Muhammad Suleman ◽

Abdur Rehman ◽

Haroon Javaid

Keyword(s):

Growth Rate ◽

Public Sector ◽

Time Series Data ◽

Trade Openness ◽

Private Investment ◽

Series Data ◽

Distributed Lag ◽

Long Run ◽

Domestic Savings ◽

Short Run

Private investment has a significant relation with the economic growth of the country. It plays an important role in reduction of unemployment and poverty by promoting efficiency and competition among the firms. This study is an attempt to investigate the determinants of private investment in Pakistan. For this purpose, time-series data is utilized for the period 1974-2013. The ARDL (Auto Regressive-Distributed Lag) modeling technique of co-integration was employed to estimate the short-run and long-run determinants of private investment in Pakistan. Empirical findings of this study indicated that in the short-run private investment in Pakistan is determined by the growth rate of GDP, public sector investment, and domestic savings. While in the long run it is determined by the official exchange rate, the growth rate of GDP, public sector investment, domestic savings, trade openness, and interest rate. The results also revealed that in the case of Pakistan different political regimes (democratic, non-democratic) have no significance in the determination of private investment. Stability tests of CUSUM and (CUSUMSQ) (Cumulative Sum Control Chart) were performed in this study. These tests indicated a stable, long run as well as short-run structural stability of the model.

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Trade Openness And Inflation: Empirical Explanation Of The Nexus In Nigeria

International Journal of Social Sciences and Economic Review ◽

10.36923/ijsser.v1i2.33 ◽

2019 ◽

Vol 1 (2) ◽

pp. 35-45

Author(s):

Musa Abdullahi Sakanko ◽

David Joseph

Keyword(s):

Inflation Rate ◽

Time Series Data ◽

Trade Openness ◽

Consumer Price Index ◽

Negative Relationship ◽

Series Data ◽

Secondary Sources ◽

Long Run ◽

Short Run ◽

The Government

Purpose of the study: The study aims is to examine the effect of trade openness on inflation rate in Nigeria. Methodology: Time series data were collected from secondary sources. EViews10 (statistical software for data analysis) ware employed to analyze the data collected. Findings: The results revealed a cointegrating and one-way Granger causality between inflation rate, and trade openness. In addition, both the short-run and the long-run results demonstrate a significant and negative relationship between inflation rate and trade openness in Nigeria. Application: The study is paramount to the government and policymakers in dealing and taking a decision regarding consumer price index and trade openness in Nigeria. We conclude that the government should work towards full diversification and diversion of the economy from oil export, control, and management of the degree of trade liberalization and the extent to which goods enter the country, and the control of money supplied. Novelty/Originality: The study accorded to debate on the inflation rate, and trade openness in Nigeria looking, at both short-run and long-run effects, before few accessible studies focused on impact, and trade openness was not measured as the value of net export divided by gross domestic product. Finally, the paper contributed to the scanty of the literature.

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Tractorisation and Agricultural Development in India

Journal of Global Economy ◽

10.1956/jge.v8i4.257 ◽

2013 ◽

Vol 8 (4) ◽

pp. 285-292

Author(s):

Komol Singha

Keyword(s):

Agricultural Development ◽

Agricultural Sector ◽

Time Series Data ◽

Positive Impact ◽

Green Revolution ◽

Series Data ◽

Correction Model ◽

Agriculture Sector ◽

Long Run ◽

Short Run

Technological innovations have had profound effect on agricultural sector in the post-Green Revolution period in India. With the inception of Green Revolution, mechanisation process, especially the application of tractor in agriculture sector had intensified. However, in 2000s, the pattern of mechanization has diversified slightly from the intensive tractorisation to other implements like, irrigation, fertilizer, harvester, energy and others. Using a time series data on tractorisation and agriculture GDP for 43 years, co-integration regression method was employed to understand short run equilibrium between the variables. Further, the Error Correction Model (ECM) result showed that elasticities of mechanization were 10.4 percent and 0.52 percent for the long-run and the short-run respectively. It implies that a positive impact of mechanization on agriculture GDP was found both in the short run and long-run.

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DETERMINAN PERTUMBUHAN EKONOMI

Journal of Management and Business ◽

10.24123/jmb.v6i1.103 ◽

2007 ◽

Vol 6 (1) ◽

Author(s):

Suyanto . ◽

Anika Widiana

Keyword(s):

Economic Growth ◽

Time Series Data ◽

Physical Capital ◽

Series Data ◽

Institutional Factor ◽

Positive Effects ◽

Long Run ◽

Stationary Test ◽

Short Run ◽

The Government

This study examines the determinants of Growth in Indonesia using time series data from the first quarter of 1980 to fourth quarter of 2000. The result of OLS regression model shows that labor, physical capital, human capital, openness, and an institutional factor give positive effects to economic growth in Indonesia. This finding supports the arguments presented by neo-classical economists. The effect of institutional variable (e.g. inflation), in particular, exhibit the intervention of the central bank and the government in inflation and economic growth. Since the estimators consist of autocorrelation, the stationary test is applied to test the integration degrees and co-integration methodology is adopted to examine the linear combination of selected variables. The Granger’s two step error correction model tells us that the short-run disequilibrium is divergent from time to time from the long-run equilibrium, with the moderate speed of divergence. However, at least the long-run OLS estimators are unbiased, consistent, and asymptotically normally distributed.

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