Micro Level Determinants of Private Investment Performance: Focus in Soro Woreda in Hadiya Zone; Southern Ethiopia

Birhanu Hankamo Kintamo

doi:10.7176/jesd/10-11-07

Abstract

The study set out to make empirical analysis on factors influencing private investment performance in Soro Woreda. In doing that, the study collected primary data from investors Registered Private Investment in Soro Woreda in year 2018 through administering a questionnaire to respondents. The study used both qualitative and quantitative approaches and covered domestic private investment. The study reveals that the variables: political factors, location factors and market factors were significant with positive correlation with private investment in Soro Woreda. Hence, have predictive powers over private investment in Soro Woreda. The results show that investment facilitation services have positive and significant predictive power as a factor to attract more investment to Soro Woreda. For example size of the market, government law and regulation, incentive given from town investment facilities provided in the Soro Woreda. This is portrayed by the probability of 0.034, 0.085, 0.054 and 0.007 which is significant at 5%, 10% and 1 per cent level respectively. The rest of the variables like political factors, government rules and regulations, raw material availability, political stability and however, are not significant and hence have no predictive power as attraction of investment to Soro Woreda. Keywords: Investment, micro-level, private investment, logistic regression. DOI : 10.7176/JESD/10-11-07 Publication date :June 30 th 2019

Highlights

IntroductionBackground of the Study Investment is an instrument which has a great role in development of an economy especially for less developed countries like Ethiopia
The analysis has shown that access to credit, level of education, access to location, access to market, interest rate perception, investment information, tax rate and political instability were among significant variables affecting probability of willingness and intensity of capital
The regression analysis reveals that from the given explanatory variables; access to credit, access to location, education level of investor, investment information and market access are positive and significant determinants of investment decision which increases the intensity of capital

Summary

Introduction

Background of the Study Investment is an instrument which has a great role in development of an economy especially for less developed countries like Ethiopia. This is because of the importance of investment to bring employment opportunities, effectiveness of domestic resource, large production, specialization, which do not fulfill in developing countries (Birhanu and Befekadu, 2003). Every country prefers to have as much private investment as possible in order to enhance economic growth and development. This means that, private investment is one of the most important sources of economic growth and employment. It supplements the government investment efforts in enhancing proper functioning of the economy (Imtiaz, 2008)

Methods

Results

Discussion

Conclusion