Determinants Of Private Investment Research Articles

Determinants of Private Investment in the Informal Sector of Urban Areas in Nigeria

The increasing importance of informal economy in entrepreneurship development, job creation and improvement in the overall social welfare of the people has been widely acknowledged in literature. This article presents various enterprise compositions and private investment in the informal economy in an urban center of a developing country. Ilorin metropolis in Nigeria was chosen as the study area due to the high concentration, high growth rate and economic significance of these activities. The level of business capitals, which form part of the private investment volume, play vital roles in the survival and growth rate of any business venture, hence the output and income earnings from business. The cross sectional data were collected from a field survey through a structured questionnaire administered to 500 informal entrepreneurs. Out of these, 482 questionnaires were retrieved and analyzed. The data was presented and explained using tables, percentages, mean scores, and median and standard deviations using the EViews 9 statistical package. The coding structure of the questionnaire and spreadsheet of the raw data collected have been made accessible in order to ensure more comprehensive investigation for further studies.

Determinants of Private Investment in Pakistan

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.

The Crowding-in/ out Debate in Investments in India: Fresh Evidence from NARDL Application

The purpose of the study is to re-examine the issue of the crowding-in/out effect of public investment on private investment by adopting an improved methodology of the ‘nonlinear autoregressive distributive lag’ (NARDL) model. Taking data from 1970 to 2016, the study finds that public investment crowds-in private investment both in the long-run as well as the short-run. However, the short-run elasticity is statistically more significant and larger in magnitude than the long-run elasticity. It has also been found that macroeconomic uncertainty significantly affects private investment both in the long-run and the short-run. Among other determinants of private investment, we observe foreign direct investment (FDI) inflow, credit flow to the private sector, household savings, real rate of interest and expected output affect private investment significantly. The policy implication of the study calls for the designing of public sector policies that enthuse more private investments. More credit flow to private sectors and FDI in different sectors of the economy should be prioritized. JEL Codes: E22, H54, C32

Determinants of private investments in Turkey: Examining the role of democracy

Abstract This study investigates the determinants of private sector investments in Turkey with a focus on democracy. Using the Autoregressive Distributed Lag (ARDL) bounds testing approach and two different democracy indices along with the other determinants of private investment, we estimated a private investment function for the 1975-2014 period. Our main finding is that democracy has a profound positive impact on private investment. Moreover, the results show that: (i) public investment is a substitute to private investment; (ii) macroeconomic instability dissuades private investment; (iii) real interest is a serious impediment to private investment; (iv) financial development and GDP growth rate stimulate private investment.

Public Sector Finances as Determinants of Private Investment in PPP Projects – Experiences from Select Countries

Public-Private Partnership (PPP) projects have been gaining in popularity in many developing countries along with developed countries. While there has been sufficient research on private sector capacity to make the partnership successful, not much research exists on the importance of the financial health of the public sector in PPP projects. The premise of the current research is that strong public sector finances instil confidence in the private sector of governments’ ability to honour PPP commitments and that, in turn, increases the attractiveness of PPP projects. Through a number of case studies relating to government finances of Indian states and other countries, it is seen that governments which have checks and balances to issuance of guarantees and other forms of indirect support for PPP projects are actually able to attract higher levels of PPP investment.

An Empirical Examination of the Determinants of Private Investment in Nigeria.

The study investigates the determinants of private investment in Nigeria, employing the Autoregressive Distributed Lag framework on data from 1980 to 2016. In all, the study provides evidence that real gross domestic product, public investment, real interest rate, real exchange rate, credit to private sector and external debt both in a short run and long run significantly affect the level of private investment, except for inflation which was insignificant. Our study revealed that real gross domestic product play an increasingly important role in supporting the nation’s growth in private investment. The study recommends that government should give more priorities to expenditures that compliment (crowd in) private investment: such as capital expenditure. Also since previous exchange rate policies are most likely to spur and speedup the growth and development of the domestic industries and also it has the likelihood to increase investment in this sector. Therefore, necessary adjustments need to be effected for the proper positioning of present exchange rate policies to encourage the investors and investment in the domestic economy. Keywords: Private investment, Real Gross Domestic Product, Real Interest Rate, Real Exchange Rate, Credit to Private Sector DOI : 10.7176/JESD/10-2-11

Детерминанты частных инвестиций в России: роль налога на прибыль

Детерминанты частных инвестиций в России: роль налога на прибыль

Effect of Budget Defict on Private Investment in East African Community for the Period 1981-2015: A Panel Data Analysis

Over the period of thirty four years, between 1981 and 2015, the East African Community economies have witnessed inconsistent and downward trend on the level of private investments as percentage of GDP. Several studies have been done regarding the determinants of private investment at country level while others have focused on budget/fiscal deficit, regional integration and economic growth but the findings are inconsistent. However, from the empirical literature review, most of the studies ignore effect of budget deficit on private investment. It is against this background that this study was carried out to investigate the effect of budget deficit on private investment in EAC using panel data over the period 1981-2015. The study adopted the Modified Flexible Accelerator model. Using Levin et al. (2002) to test the unit root, the study found the variable to be non-stationary at level. Co-integration test error correction model were carried to analyze the long-term and short-term dynamic of the selected macroeconomic variables on budget deficit account. The study results showed that fiscal deficit had a negative effect on private investment in the region. Debt reduction and government expenditure scaling down strategies should also be adopted in the region so as to improve the fiscal deficit hence boosting private investment and faster real GDP growth in the long run.

An OLS Approach to Modelling the Determinants of Private Investment in Ghana

After independence, most developing countries embraced the development paradigm of import substitution. Nevertheless, in the 1980s, there was a shift in development paradigm from import substitution to the private sector-led development strategy to boost growth in developing countries. The study analyses the determinants of private investment in Ghana using a time series data from 1980 to 2010 with the aid of multiple linear regression model. It was revealed that factors that have a significant impact on private investment in Ghana were public investment, credit supply to the private sector, external debt, openness of the economy, corporate tax and democracy. Nevertheless, variables like: GDP growth, real interest rate, inflation and real exchange rate were not statistically significant. The study therefore recommends a tighter fiscal policy to reduce the crowding out effect on private investment. Foreign trade and trade liberalization must be encouraged to ameliorate private investment in Ghana.

Determinants of Private Investment: A Systematic Review

Investment is considered as a crucial element of economic growth and post 2015 development agendas. The main aim of this study is to assess the determinants of private investment. For this purpose, concentrated and careful literature review was done on 11 papers conducted in nine African countries. Eight variables were considered for analysis. The result shows that output/national income, public investment and exchange rate are the critical variables affecting the performance of private investment. The others variables: interest rate, credit, inflation rate, international trade, and money supply are also slightly important in explaining the performance of private investment. The study finally recommends that countries should seriously work in creating enabling environment for private investment.

Determinants of Private Investment in Tanzania: 1970-2015

This study provides an empirical analysis of the macroeconomic factors that affect private investment decisions in Tanzania. Theory and empirical literature is reviewed in an effort to identify a private investment function for the period 1970 to 2015. The results suggest that private investment is determined by aggregate demand as measured by output. In addition, there is evidence that the crowding in effect of public investment and credit flow to the private sector has positive impact on capital accumulation, while external debt and inflation have had negative effects. Since time series data can bring spurious regression results, we avoid this by testing for stationarity and co-integration prior to estimation of the model. The results of the ECM model suggest that private investment is co-integrated with the suggested variables. In terms of policy, the results suggest the importance of inflation control, development of credit markets and public investment as economic policy instruments for private investment growth in Tanzania.

Determinant of Private Investment in Nigeria’s Manufacturing Sub-sector

Determinant of Private Investment in Nigeria’s Manufacturing Sub-sector

Bundling Governance: Finance Versus Institutions in Private Investment Promotion

Purpose – The study extends the debate on finance versus institutions in the promotion of investment documented by Acemoglu and Johnson (2005), Ali (2013) and Asongu (2014). We assess the effects of various components of governance on private investment, notably: political, economic and institutional governances. Financial indicators of depth, allocation efficiency, activity and size are used.Design/methodology/approach – An endogeneity robust dynamic system GMM estimation technique is employed. Principal component analysis is also employed to reduce the dimensions of governance variables. The empirical evidence is based on 53 African countries for the period 1996-2010. Findings – The findings provide support for the quality of governance as a better determinant of private investment than financial intermediary development. Moreover, the evidence of finance and governance as substitutes in their impact on investment implies that good governance fuels private investment and this positive impact is stronger in nations with less developed financial systems. This finding is consistent with Ali (2013) and contrary to the results of Asongu (2014c).Practical implication – Policy measures for fighting involuntary and voluntary surplus liquidities are discussed. The paper provides additional support for the need of strengthening governance institutions to promote investment on the one hand and fighting financial allocation inefficiency by mitigating surplus liquidity issues on the other hand. Originality/value – The paper extends the debate on the substitution of finance and institutions in the promotion of private investment.

The Effect of Monetary Policy on the Private Sector Investment in Ethiopia: ARDL Co-Integration Approach

Even though there is a belief that monetary policy can influence private sector investment, research works have not yet been conducted on the dynamic impact of monetary policy on private investment in Ethiopia. Rather, literatures are substantially deal with the determinants of private investment and the effectiveness of monetary policy in Ethiopia separately. Consequently, a times series analysis technique using annual data for the period 1975-2011 is utilized to investigate the power of policy makers in enhancing the performance of private investment through monetary policy changes. Moreover, the ambiguous results in relation with the power of monetary policy in affecting private sector investment in elsewhere including sub-Saharan countries become an initiation to undertake this particular study. Accordingly, this study seeks to present an empirical assessment of monetary policy that has either stimulated or dampened private sector investment for the past several decades. Employing time series econometric techniques such as, co-integration and error correction techniques within an ARDL framework the study reveals intriguing results. Results suggest that private investment is positively and significantly influenced in the short-run by public investment, money supply, and a real output but negatively and significantly by real exchange rate while, real interest rate is found to have insignificant and has a negative sign in line with macro-economic theory. Moreover, in the long run, the result shows a positive and significant effect of public investment, real GDP and broad money supply while real exchange rate negatively and significantly influenced private investment. However, real interest rate is found to have a positive but insignificant effect in the long run as well. The conclusion is that monetary policy measures are more influential than fiscal policy in promoting private investment in Ethiopia via improving financial resource availability for investment.

Determinants of Private Investment in Iran based on Bayesian Model Averaging

Due to the importance of investment as one of the determinants of the economic growth, in this study, the effects of 19 explanatory variables on private investment and their ranking in Iran’s economy will be examines by Bayesian Model Averaging (BMA) approach. The results show that the growth of capital imports (by probability of 1) and the growth of GDP (by probability of 0.68) are the most important factors variables in investment equation. The variable of the ratio of companies’ taxes (by probability of 0.50) comes the second- ranked. Nominal variables such as inflation rate, money growth and the ratio of bank credits to the private sector to Non-oil GDP don’t have much of importance in private sector investment. Moreover, interest rates and tax rate doesn’t have important effect on investment developments during the sample period.

Determinants of Private Investment and The Effects on Economic Growth in Indonesia

AbstractInvestment is important part of development economic, especially on increase of economic growth. Through investment, various of production facilities will be provide, thus will give optimally production output and value added, as a result can improve the economic growth. Investment activities can be done by two main sectors, government and private. Majority of government investment commonly to finance physical and non-physical development that could not be conducted by society. Lack of capital in government sector influence low of encourage on physical infrastructure as driving of business and economic activities. That condition will impact on private investment. This study will explain the effect of government investment and another economic variables, such as economic growth, investment credit, interest rate, inflation and exchange rate, and the influence of private investment on economic growth in Indonesia

The Determinants of the Long Term Private Investment in Brazil: An Empyrical Analysis Using Cross-section and a Monte Carlo Simulation

Empirical studies regarding the determinants of private investment in developing countries, including Brazil, have demonstrated the high inflation's rates negative impact on investment. However, the recent Brazilian's experience clearly shows that stabilization is not capable of recovering investment's rates. Therefore, the objectives of this study are: a) to analyze the long term private investment's determinants in Bra zil; b) analyze if the Brazilian economy has been impacted by the crowding-in or crowding-out effetcs; and c) analyze the macronomic variables’ behavior during the 2012 to 2017 period. In order to do this, we used a cross section econometric analysis and a Monte Carlo Simulation for the data analysis. The paper presents the main investment theories, and recent developments of these theories, as well as how they can be applied to the Brazilian data. The results show evidences of a public investment crowding-in effect in infrastructure over the private investment. All the analyzed variables’ signs are consistent with the theory, with the exception of the real interest's rates, where the coefficient is positive and insignificant in the estimated equation. The reduction in the credit's volume and the existence of political and economic instabilities showed that they are harmful to private investment in the analyzed period. The implementation of public policies in order to guarantee economic stability and improve the government's credibility, along with the increase of credit offer, could boost private investment in Brazil.

Comparative Analysis of the Determinants and Behaviour of Investment Demand between South Africa and Zimbabwe

The study investigates the determinants of private investment in South Africa and Zimbabwe employing annual data over the 1980-2010 periods. The influence of gross domestic product (GDP), government debt, inflation, and interest rate policies are considered. Applied vector autoregressive and error correction models are used to estimate long- and short-run relationships among variables. The results suggest that GDP has a positive effect on private investment. Government debt has a crowding out effect on private investment, and inflation is shown to negatively affect investment. Increases in interest rates discourage private investment in South Africa

FOREIGN AID, AID UNCERTAINTY AND PRIVATE INVESTMENT IN WEST AFRICA: AN UNOBSERVED COUNTRY EFFECTS MODEL

This paper examines whether foreign aid has any impact on private investment in West Africa, taking other determinants of private investment into account. Following from this, the paper investigates whether multilateral aid and bilateral aid affect private investment differently. In a related analysis, the paper examines the impact of aid uncertainty (aid volatility) on private investment. The results show that multilateral aid affects private investment positively, but not bilateral aid, and uncertainty measured as the coefficient of variation has a negative impact on private investment and therefore reduces the impact of aid on private investment.

Determinants of Private Investment in Brazil: An Empirical Analysis of the Period 1996-2011

Empirical studies regarding the determinants of private and RD and (ii) what are the keyfactors to be considered when investments are made, particularly in R&D and innovation? To answer the first question we evaluated the impacts of macroeconomic variables on private investments, using a strategic bias and a long term vision plan. The estimates demonstrate empirical crowding-in evidence of public investments in infrastructure over private investments a s a real impact to innovation. As for public investments (non-infrastructural) we suggest that the crowding-in impact dislocates private investments. All these indicators were obtained as presented in the theory, with the exception of the real interest rates variable (r), in which we observed that the coefficient is positive and insignificant in the estimated equation.