Private Domestic Investment Research Articles

Educational Sector Financing and Economic Wellbeing

This study examines the relationship between educational Sector financing and economic wellbeing in Nigeria, focusing on government funding, private domestic investment, and foreign expenditure in education. The study employs econometric techniques to analyze the long-term dynamics of educational financing on the Human Development Index (HDI). The findings reveal a significant increase in educational financing activities over time, particularly in domestic funding. However, despite the growth in funding, there is evidence of underemployment among educated individuals, suggesting a disconnect between educational investments and economic outcomes. Co-integration analysis indicates a long-term relationship between government educational financing and human development. The reliance on government funding for education underscores the need for effective resource management and targeted interventions to address gaps in the education system. Keywords: Educational financing, economic development, Nigeria, government funding, private investment.

Determinants of private investment in selected ECOWAS countries in Africa

The main focus of this study is the evaluation and / or examination of the determinants of private investment among the selected ECOWAS countries. The selected countries include Cote d' Ivoire, Ghana, Gambia and Nigeria. In the context of ECOWAS, these countries are emerging economies. Panel data for these selected countries covered the period 1986 to 2022.The study adopted the fixed effects and random effects panel estimation techniques in the analysis of our econometric models. The selection between the fixed effects and random effects was done using the Hausman test. The results indicated preference for the fixed effects over random effects. Over all, the results of the fixed effects indicated that all the determinants except inflation, money supply and credit to the private sector in the ECOWAS region were significant in explaining the performance of domestic private investment. But in the context of the random effects, all the determinants except credit to the private sector were significant in explaining the nature of the behaviour of domestic private investment in the ECOWAS region. Keywords: Determinants, Domestic Private Investment, Panel Data, ECOWAS, Africa. JEL Classification Code: E22

Optimization of human capital in the agrarian sphere: goals, principles and methods

Sufficient provision of agricultural enterprises with labor resources, their territorial and structural balance, rational use, high level of labor productivity are the key directions of effective functioning of agro-industrial complex, growth of production volumes and increase of its efficiency. Purpose - to analyze the criteria of human capital optimization in the agrarian sphere, to identify existing problems and to determine promising directions. Methods - the study used quantitative and qualitative analysis methods, including the collection and processing of statistical data, questionnaire survey of employees of the agrarian sector, as well as interviews with farm managers. Using the correlation and regression method, the influence of the studied factors on the optimization of labor activity was substantiated. Results - the article identifies the main issues of agricultural staffing, which consist in the decline in the professional qualification level of specialists, low staffing levels, outflow of able-bodied population from rural areas, loss of prestige of agricultural professions. Conclusions - this study emphasizes the need for a comprehensive approach to the management of labor potential in agro-industrial production of the republic. The introduction of advanced training programs, improvement of working conditions and social infrastructure is the basis for sustainable development of the industry. It is also recommended to strengthen state support and stimulate the attraction of capital of domestic and foreign private investors and investment funds in rural regions to ensure stable activity of agricultural enterprises. It shows further prospects for increasing human resources to ensure the competitiveness of domestic agricultural producers and as the main driving element in the establishment of innovation economy and the expansion of globalization processes.

Domestic Private Investment and Selected Macroeconomic Indicators in Nigeria:An Econometric Analysis

Domestic private investment (DPI) plays significant role in economic growth of any economy. It helps in mobilizing domestic resources for socio-economic advancement. Domestic Investment and its determining factors remains one recalling issues in the field of economics and international finance. This is based on the fact that aggregate investment plays a dominant role in stimulating economic growth and development of every nation. However, most of the developing and underdeveloped economies have witnessed low domestic investment and consequently slow economic growth. Therefore, this study investigates the relationship, trends, and impact of domestic private investment and selected macroeconomic indicators in Nigeria, a developing economy. The study analyzed data gotten from the CBN Statistical Bulletin for the duration of 1991-2020. The statistical package used for the study is Econometric Views (E-Views 9.0). Multiple regression techniques via OLS, Augmented Dickey Fuller (ADF) test and Granger causality procedure was applied to determine causalities while Johansen Co-integration test was administered to verify sustainability of the long-run relationships. The result revealed that there exist short and long-run relationships between domestic private investment and key macroeconomic variables- Inflation, Lending rates, gross domestic savings, real gross domestic product, money supply in Nigeria. Vector error correction model was also adopted to determine the speed of adjustment between the independent variables and the dependent variables. The OLS result revealed that there exist a positive and significant relationship among GDSA, BMOS, RGDP and PDIV, negative and significant relationship among PLER, INFR, and PDIV. Therefore, the study recommends among others that Nigerian government must be resolute in their resolve to drive private domestic investment in the country by implementing appropriate monetary and fiscal policies that address inflation, interest rate, domestic savings and money supply. This will no doubt fast track inclusive growth.

PROBLEMS OF VERTICAL INTEGRATION AMONG FISH FARMERS AND WAY FORWARD IN RIVERS STATE, NIGERIA

This study examines the impact of private investment on economic performance in Nigeria using time series data from 1980 -2018. Multiple regression and co-integration methods are employed to analyze the data. The objectives of this study is to, among other things, examine the casual relationship between private investment and economic growth in Nigeria and to investigate the impact of private domestic investment on economic performance in Nigeria. Being a time series data, the first step is to test for the stationarity of the data by using Phillips Perron-Fuller unit root test. Ordinary least square (OLS) and Auto regressive distributed lag (ARDL) technique is used to estimate the models. The results of the unit root test show that some variables; Labour Force Participation rate (LPR), Private Domestic This study assessed problems of vertical integration among fish farmers in Rivers State, Nigeria. The paper looked at distribution of respondents’ socio-economic characteristics and problems of vertical integration among fish farmers in the study area. Data for the study was collected from 37 vertically integrated fish farmers that exist in the State. To analyze the data, collected descriptive statistics and Likert-type rating scale was used. The study revealed that the vertically integrated fish farmers were mostly within the range of 41-45 years, married having household size of 6-10 persons. The study revealed that the vertically integrated fish farmers were experienced, learned, and majored only as fish culture farmers. However, farmers complained of large capital required for starting, irregular electricity, sinking of local feed produced, poor drying of fish, and stressful activities of feed production, fingerling hatching and processing of fish. It was suggested that fish culture farmers should be provided with credit at low interest rate, up-to date knowledge in fish culture and extension services to enhance productivity.

Do fiscal rules shape private-sector investment decisions?

We investigate whether fiscal rules impact private domestic investment. Using data spanning 100 advanced and developing countries over the period 1990–2019 and applying the entropy balancing method, we reveal that implementing fiscal rules significantly improves private-sector investment. This finding is robust to a wide set of economic and econometric tests. Moreover, we perform a range of heterogeneity tests and find that the effect of fiscal rules only applies in developing countries and is amplified in good times and in countries with a strong fiscal stance. However, the benefits of fiscal rules are mitigated in resource-rich countries and during economic crises. Finally, we explore the underlying mechanisms and show that fiscal discipline, a composition effect fostering public investment, and macroeconomic stability are three driving forces that produce the stimulative effect of fiscal rules.

Effect of Infrastructure Development on Domestic Private Investment and Foreign Direct Investment in Kenya

Effect of Infrastructure Development on Domestic Private Investment and Foreign Direct Investment in Kenya

Effect of Macroeconomic Factors on Economic Growth: A Case Study of Bangladesh

Macroeconomic factors strongly influence the economy. It affects countries and businesses equally. The relationship between different macroeconomic factors is an area of widespread study for policymakers and economists. The ultimate purpose of this study is to assess the impact of macroeconomic factors on the economic growth. This research has taken GDP as a substitute variable for the development of the economy as well as endogenous (dependent) variable and FDI, inflation (INF), money supply (M2), public and private domestic investment (DINVEST), and foreign exchange reserve (FExR) as independent variables. Moreover, this study used time series secondary data starting from 2005-06 to 2022-23 for all econometric analysis. On the other side, we utilized the ADF (Augmented Dickey-Fuller) test to study the unit root (stationary property) of data, the Durbin Watson (DW) statistic technique to verify the autocorrelation of variables, the VIF test technique to examine the multicollinearity among independent variables and multiple linear regression to scrutinize the overall effect of macroeconomic factors on growth of the economy. Study findings show that DINVEST and FDI positively affect the growth of the economy. i.e., if macroeconomic variables- DINVEST and FDI are increased by 1 unit, they increase economic growth by 2.96 units and 0.62 units, respectively. However, inflation, money supply, and foreign exchange reserves have a positive effect on economic growth, but it is statistically insignificant. The study implies that economists, researchers, academicians, and policymakers can use the findings of the study for future research and decision-making regarding the effect of macroeconomic factors on economic growth.

Foreign Direct Investment and Domestic Private Investment in WAEMU Countries: Crowding-in or Crowding-out?

Foreign direct investment (FDI) is a particularly attractive prospect for WAEMU countries, which are constantly integrating it into their development policies. However, studies on the relationship between FDI and private domestic investment (PDI) come to contradictory conclusions. This article focused on the effect of FDI on private domestic investment over the period 1996 to 2018. The results validated the presence of cross-country dependence. The article uses Common Correlated Effect-Mean Group (CCE-MG) as the analytical technique for this purpose. The results are consistent with the “crowding-out” hypothesis of FDI on PDI.

Threshold Analysis of Fiscal Policy Variables and Private Investment in Nigeria

This paper investigates the relationship between fiscal policy variables and private investment in Nigeria for the period 1970 – 2019 with a view to establishing the threshold level of each of the key fiscal policy variables in relation to private investment. The study employed annual and quarterly time series data covering the period 1970:1 to 2019:4 which were sourced in part from the Central Bank of Nigeria’s Statistical Bulletin and National Bureau of Statistics (NBS). Data collected were analyzed using econometric techniques. The variables used were private domestic investment, budget deficit, recurrent and capital government expenditure, oil and non-oil government revenue and public debt. The main findings are: First, there is an evidence of a double threshold effects of the fiscal balance. When exceeding a budget deficit level of 3.98 per cent of GDP or a fiscal surplus level of 3.2 per cent of GDP, private investment is negatively affected. Also, increase in government total expenditure beyond the third regime made private investment to become less productive. As regards public debt, the results revealed that private investment had the most positive impact on economic growth in the first regime of public debt. A resort to public debt beyond this level will make private investment less productive thereby inhibiting growth. The study therefore, concludes that government should be cautious in resulting to debt instruments to finance its deficit. It should also make a concerted effort to increase its expenditure especially in the provision of infrastructural facilities as this directly influence private investment decision positively.

The impact of political parties on foreign direct investment within Mexico

Today we can identify a variety of political and economic systems in the world. A free market economic system is more likely to work if it is based on a democratic political system. According to the Democracy Index 2021, Mexico went from being an imperfect democracy to a hybrid regime, with the risk of becoming an authoritarian regime. The transition from a political system of imperfect democracy to a hybrid regime represents a great risk for domestic and foreign private investment. There is a latent political risk for investors in this type of countries, which scares away foreign direct investment. This research presents an analysis of the behavior of foreign direct investment in Mexico from 2000 to 2021 by state and political party. The results from a point biserial correlation test prove the existence of a dependence between the attraction of foreign investment and the political party in government. Mexico attracted lower capital inflows since the presence of MORENA, actual political party that is in both, the federal and some state governments. Descriptive statistics show that in most of the matches there is a dependence and also a correlation, however it is prudent to study the direction of this relationship and the strength. The findings are based on an analysis of three years of government of the MORENA political party; therefore, a longer period could be considered for future research.

Neophodan nivo investicija za ubrzani privredni rast - stilizovane činjenice i politike

To close the gap in economic development relative to the EU average, Serbian economy has to achieve significantly higher growth rates in comparison to other European countries over the longer period. Theoretical and empirical literature indicates that the level of investment in physical capital is one of the key determinants of the dynamics of economic growth. In this paper, based on data on investments and savings in Serbia and in 37 countries that in the previous three decades achieved an average GDP growth rate of over 5% per year (so-called fast-growing economies - FGE), we present and analyze relevant stylized facts. In the observed period, FGE had average total investments of 25.6% of GDP, of which 69% was private and 31% public investments, whereby private investments were predominantly domestic, which is associated with a high rate of gross domestic savings (of 27.4% of GDP). On the other hand, total investments in Serbia were 9.7% of GDP lower than the FGE average, which was a consequence of significantly lower public and domestic private investments, which was, among other things, a consequence of significantly lower domestic savings (by over 20% of GDP). As in the recent period there has been a noticeable increase in public investments in Serbia, in order to accelerate economic growth, it is necessary, in addition to maintaining them at a high level, to encourage a considerable increase in domestic private investments through economic measures policy and wider reforms of the general institutional environment, with the aim of having the total level of investments of over 25% of GDP over the next few decades.

Inflation and Macroeconomic Performance in Nigeria

In Nigeria, high inflation has been one of the major challenges facing the nation’s economy. This has necessitated the re-evaluation of the impact of inflation on the nation’s macroeconomic performance between 1981 and 2022. The data utilized were sourced from the secondary sources like Central Bank of Nigeria Statistical Bulletin 2022 and United Nations Conference on Trade and Development Report. The inflation rate, exchange rate, and interest rate served as independent variables, while per capita income and gross fixed capital formation (proxy for private investment) served as the dependent variables. The outcome of the unit root tests showed that all the variables were not stationarity at level, but became stationary after first difference which informed the use of Error Correction Model (ECM) test approach. The results from the per capita income model, revealed that an increase in inflation rate, exchange rate and interest rate erodes the value of the per capita income of the citizens. The result from the private investment model, showed that an increase in inflation rate, exchange rate, and interest rate reduces the level of private domestic investment. The policy implication of these results is that negative impact of inflation on these key macroeconomic indicators suggests that high or volatile inflation rates can hinder economic growth and development. The paper therefore recommends amongst others, that the central bank should adopt appropriate monetary policies aimed at controlling inflation rates within acceptable levels. This may involve adjusting interest rates, managing money supply, and employing other monetary tools to stabilize prices. Furthermore, government should prioritize fiscal discipline and prudent spending to avoid excessive budget deficits that can fuel inflationary pressures and allocate funds towards productive investments and infrastructure projects that stimulates economic growth without exacerbating inflation.

The Effects of Domestic Private Investment on Ethiopian Economic Growth: Time Series Analysis

The Effects of Domestic Private Investment on Ethiopian Economic Growth: Time Series Analysis

Trends and determinants of domestic private investment in Ethiopia: Time series analysis

Trends and determinants of domestic private investment in Ethiopia: Time series analysis

The Effects of Tax Incentives on Private Domestic Investment in Addis Ababa, Ethiopia

The Effects of Tax Incentives on Private Domestic Investment in Addis Ababa, Ethiopia

Fiscal policy, public investment and structural change: a P-SVAR analysis on Italian regions

ABSTRACT This study analyses the regional impact of public expenditures focusing on three domains central to the Italian National Recovery and Resilience Plan (NRRP): green, digital and knowledge. Relying on a regional public expenditures sectoral dataset for the period 2000–19, we perform a panel structural vector autoregressive (P-SVAR) model showing that fiscal policy has positive and long-lasting effects on gross domestic product (GDP) and private investments. A relevant heterogeneity is detected, relative to: (1) the effects of sectoral spending in crowding-in investment; (2) the impact on regions’ ‘structural upgrading’; and (3) a discrepancy in fiscal multipliers across macro-areas. Nevertheless, the results suggest that the NRRP may help in reducing the Italian divide.

Effecsts of Uncertainty on Domestic Private Inevestments in Kenya

Domestic private investment serves as a prerequisite for the development and modernization of any economy. In Kenya, macroeconomic and political uncertainties play a significant role in influencing private domestic investments. This is informed by the fact that these investments allow investors to fund ventures, which creates jobs and increase government revenues through taxation. Hence, it boosts the growth of the economy and improves the living standards of the people. However, private domestic investments are severely affected by both macroeconomic and political uncertainties about how the government formulates political, economic, and regulatory policies that affect the business climate. Investors are risk-averse; hence they base investment decisions on prevailing and future conditions of the business environment. This paper focuses on analyzing the effects of uncertainty on Kenya’s domestic private investments. The study estimated the Autoregressive-Distributed Lag (ARDL) bounds technique which captures both short and long-run dynamics of this relationship among the variables. Time series data from UNCTAD, the World Bank, and the Central Bank of Kenya for the period spanning 1980 to the year 2019 was used. The study results suggest that real GDP (RGDP) and real effective exchange rates (REER) have a significant and positive effect on private domestic investment (PDI). In contrast, inflation (INFL), Real interest rates (RINR), Political uncertainty (PRI), and WUIKEN (economic policy uncertainty and volatility in the stock markets) have a negative and significant effect on private domestic investments. Based on these results, the most significant factors affecting private domestic investments were found to be political uncertainty (PRI), real gross domestic product (RGDP), and WUIKEN (economic policy uncertainty and volatility in the stock markets). Effectively, the study recommends that the government should enact policies that increase the ease of doing business and reduce economic and political uncertainty, such as a reduction in the tax rate, stabilization of the exchange rate, and stable political environment to reduce investor uncertainty and skepticism and also to enhance their confidence.

Inflation targeting and private domestic investment in developing countries

Does inflation targeting foster private domestic investment in developing countries? A few studies have attempted to examine this issue, with mixed results. Here we argue that by anchoring public expectations firmly, the inflation targeting framework should enhance monetary policy credibility and macroeconomic stability, thereby promoting investment incentives. Using data from 62 countries over the period 1990–2019 and applying propensity score matching methods, we find that inflation targeting significantly increases domestic investment. However, inflation deviations from the target reduce the favorable effect of inflation targeting on investment. Furthermore, the positive effect of inflation targeting on investment is amplified in emerging economies and in countries with sound fiscal discipline. Finally, we explore the underlying mechanisms and show that macroeconomic stability, i.e., the reduction in inflation and its volatility, interest rate, exchange rate, and output volatility, is the main channel through which the monetary framework promotes domestic investment.

Private Investment and Economic Performance in Nigeria

This study examines the impact of private investment on economic performance in Nigeria using time series data from 1980 -2018. Multiple regression and co-integration methods are employed to analyze the data. The objectives of this study is to, among other things, examine the casual relationship between private investment and economic growth in Nigeria and to investigate the impact of private domestic investment on economic performance in Nigeria. Being a time series data, the first step is to test for the stationarity of the data by using Phillips Perron-Fuller unit root test. Ordinary least square (OLS) and Auto regressive distributed lag (ARDL) technique is used to estimate the models. The results of the unit root test show that some variables; Labour Force Participation rate (LPR), Private Domestic Investment (PDI),Foreign Direct investment (FDI), Misery Rate (MR), Private Investment (PI), Exchange Rate (EXR), Unemployment Rate (UNEM) and Trade Openness (TOP) are integrated of order one (1) while two variables; Real Gross Domestic Product Growth Rate (RGDPR) and Real Interest Rate ( RINTR) are integrated of order zero (0). The findings from the analysis using the Ordinary Least Square (OLS) and Auto Regressive Distributed Lag (ARDL) methods show the following: that there is no causal relationship between private investment and economic performance in Nigeria. Private Domestic Investment (PDI) recorded a positive but insignificant impact on economic performance (RGDPR) both in the short run and long run; unemployment rate reveal a negative but insignificant impact on economic performance (RGDPR) in the short run but the impact is statistically significant in the long run. There is no long run significant impact of Foreign Direct Investment (FDI) on economic performance in Nigeria, Trade Openness showed a significant inverse relationship with Misery Rate which was proxy for economic performance. The co-integration tests also confirm the existence of long run relationship between the variables and results gotten from stationarity and normality test reveal that the model is fairly well specified and could be used for policy analysis. Based on these findings, the study recommends that the AKSU Journal of Social Sciences (AJSS) Vol. 3, No. 1 (April) 2023 – G. M. Ekpo, E. B. Iwatt & A. A. Uduimoh, pp. 55-85 58 Nigerian government should promote and encourage both domestic and foreign direct investment. The investment policy should be more transparent, attractive and competitive.