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Private capital formation: Short- and long-run crowding-in (out) effects in ASEAN, 1971-99

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Listed:
  • Anthony Bende-Nabende

    (The Business School, The University of Birmingham)

  • Jim Slater

    (The Business School, The University of Birmingham)

Abstract

This study presents an empirical assessment of the factors that have stimulated (deterred) private investment in the Association of Southeast Asian Nations (ASEAN) economies during the past three decades. The results for the short-run suggest that output growth and public investment were the dominant determinants of private investment, while those for the long-run suggest FDI as an additional dominant determinant. The monetary policy variables were on the other hand less effective determinants. Furthermore, whereas output growth and FDI were implicit crowding-in factors, public investment was an effective crowding-out factor. The other determinants imparted both crowding-in and crowding-out effects. While external indebtedness generated long-run crowding-out effects, there is limited evidence to suggest that it did so in the short-run.

Suggested Citation

  • Anthony Bende-Nabende & Jim Slater, 2003. "Private capital formation: Short- and long-run crowding-in (out) effects in ASEAN, 1971-99," Economics Bulletin, AccessEcon, vol. 3(28), pages 1-16.
    • Handle: RePEc:ebl:ecbull:eb-03c50006
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    3. Mr. Shaun K. Roache, 2006. "Domestic Investment and the Cost of Capital in the Caribbean," IMF Working Papers 2006/152, International Monetary Fund.

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    JEL classification:

    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models

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