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The Determinants of Domestic Private Investment in Malawi: An Empirical Investigation

Author

Listed:
  • MALULEKE, GLENDA

    (Department of Economics, University of South Africa, Pretoria, South Africa)

  • ODHIAMBO, NICHOLAS M.

    (Department of Economics, University of South Africa, Pretoria, South Africa)

  • NYASHA, SHEILLA

    (Department of Economics, University of South Africa, Pretoria, South Africa)

Abstract

The study investigated the determinants of domestic private investment in Malawi using the autoregressive distributed-lag (ARDL) bounds testing approach for the period from 1980 to 2018. The findings show that in the long run, inflation and interest rate are the negative determinants of private investment. In the short run, private and public investment from the previous period and trade openness are found to be the positive determinants. Inflation and interest rate are found to be the negative determinants in the short run. The study also found that economic growth and domestic credit to the private sector are insignificant in determining private investment. The study recommends that the government develop and adopt policies that will create a conducive environment for the private sector to invest. Le determinanti degli investimenti privati in Malawi: un’indagine empirica Questo articolo esamina le determinanti degli investimenti privati interni in Malawi utilizzando l’approccio ARDL per il periodo 1980-2018. I risultati dimostrano che nel lungo periodo l’inflazione e il tasso d’interesse influiscono negativamente sugli investimenti privati. Nel breve periodo, i risultati mostrano che gli investimenti privati sono influenzati positivamente dagli investimenti privati e pubblici del periodo precedente e dall’apertura commerciale, e negativamente dall’inflazione e dal tasso d’interesse. Lo studio riscontra anche che la crescita economica e il credito interno al settore privato sono insignificanti nel determinare gli investimenti privati. Lo studio raccomanda ai governi di sviluppare e adottare politiche che possano creare le condizioni adatte a stimolare gli investimenti del settore privato.

Suggested Citation

  • Maluleke, Glenda & Odhiambo, Nicholas M. & Nyasha, Sheilla, 2024. "The Determinants of Domestic Private Investment in Malawi: An Empirical Investigation," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 77(3), pages 445-462.
    • Handle: RePEc:ris:ecoint:0978
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    References listed on IDEAS

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    More about this item

    Keywords

    Private Investment; Determinants; ARDL Approach; Malawi;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures

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