IDEAS home Printed from https://ideas.repec.org/a/taf/irapec/v26y2012i5p597-622.html
   My bibliography  Save this article

Interaction of public and private investment in Southern Africa: a dynamic panel analysis

Author

Listed:
  • Thomas Chataghalala Munthali

Abstract

While the debate on the crowding-in-out effects of public investment on private investment largely seems to point towards a crowding-in effect in developing economies and the opposite in advanced economies, considerable evidence exists on the inconclusiveness of such findings across countries and regions. This study uses two investment models, Koyck’s flexible accelerator and Jorgenson’s neoclassical with error correction modified to empirically capture the structural and institutional characteristics of the Southern African region, to investigate crowding-in effects in one of the world’s most underdeveloped regions, Southern Africa. The study’s models reject the existence of crowding-in effects even when the public investment component of transport and communication is used. However, the study unveils macroeconomic uncertainty, market size, and capital availability as binding constraints on private investment in Southern Africa.

Suggested Citation

  • Thomas Chataghalala Munthali, 2012. "Interaction of public and private investment in Southern Africa: a dynamic panel analysis," International Review of Applied Economics, Taylor & Francis Journals, vol. 26(5), pages 597-622, September.
    • Handle: RePEc:taf:irapec:v:26:y:2012:i:5:p:597-622
    DOI: 10.1080/02692171.2011.624500
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/02692171.2011.624500
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/02692171.2011.624500?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Engelbert Stockhammer, 2004. "Financialisation and the slowdown of accumulation," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 28(5), pages 719-741, September.
    2. Stephen S. Everhart & Mariusz A. Sumlinski, 2001. "Trends in Private Investment in Developing Countries : Statistics for 1970-2000 and the Impact on Private Investment of Corruption and the Quality of Public Investment," World Bank Publications - Books, The World Bank Group, number 13989.
    3. World Bank, 2006. "World Development Indicators 2006," World Bank Publications - Books, The World Bank Group, number 8151.
    4. Rocha, Carlos Henrique & Teixeira, Joanílio Rodolpho, 1996. "Complementaridade versus substituição entre investimento público e privado na economia brasileira: 1965-90," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 50(3), July.
    5. Marianna Belloc & Pietro Vertova, 2004. "How Does Public Investment Affect Economic Growth in HIPC? An Empirical Assessment," Department of Economics University of Siena 416, Department of Economics, University of Siena.
    6. Sinha, D., 1999. "Export Instability, Investment and Economic Growth in Asian Countries: A Time Series Analysis," Papers 799, Yale - Economic Growth Center.
    7. James Gwartney, 2004. "What Have We Learned from the Economic Freedom of the World Index?," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 20(Fall 2004), pages 1-8.
    8. Sinha, Dipendra, 1999. "Export Instability, Investment and Economic Growth in Asian Countries: A Time Series Analysis," Center Discussion Papers 28466, Yale University, Economic Growth Center.
    9. Khan, Mohsin S. & Reinhart, Carmen M., 1990. "Private investment and economic growth in developing countries," World Development, Elsevier, vol. 18(1), pages 19-27, January.
    10. Marc Lavoie, 1992. "Foundations of Post-Keynesian Economic Analysis," Books, Edward Elgar Publishing, number 275.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Samuel Kwaku Agyei, 2017. "Explaining public investment dynamics in Sub-Saharan Africa: The role of country governance structures," Cogent Economics & Finance, Taylor & Francis Journals, vol. 5(1), pages 1323987-132, January.
    2. Akçay Selçuk & Karasoy Alper, 2020. "Determinants of private investments in Turkey: Examining the role of democracy," Review of Economic Perspectives, Sciendo, vol. 20(1), pages 23-49, March.
    3. Samuel Kwabena Obeng & Linda Akoto & Felicia Acquah, 2018. "Democracy, Globalization and Private Investment in Ghana," Global Business Review, International Management Institute, vol. 19(1), pages 1-20, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Hein, Eckhard, 2011. "Distribution, ‘Financialisation’ and the Financial and Economic Crisis – Implications for Post-crisis Economic Policies," MPRA Paper 31180, University Library of Munich, Germany.
    2. Dierk Herzer & Michael Grimm, 2012. "Does foreign aid increase private investment? Evidence from panel cointegration," Applied Economics, Taylor & Francis Journals, vol. 44(20), pages 2537-2550, July.
    3. Georgios Argitis & Stella Michopoulou, 2011. "Are Full Employment and Social Cohesion Possible Under Financialization?," Forum for Social Economics, Taylor & Francis Journals, vol. 40(2), pages 139-155, January.
    4. Parui, Pintu, 2021. "Financialization and endogenous technological change: A post-Kaleckian perspective," Structural Change and Economic Dynamics, Elsevier, vol. 58(C), pages 221-244.
    5. MAKUYANA, Garikai & ODHIAMBO, Nicholas M., 2018. "Public and Private Investment and Economic Growth in Zambia: A Dynamic Approach," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 71(4), pages 503-526.
    6. Eckhard Hein, 2010. "Shareholder Value Orientation, Distribution And Growth—Short‐ And Medium‐Run Effects In A Kaleckian Model," Metroeconomica, Wiley Blackwell, vol. 61(2), pages 302-332, May.
    7. Majeed, Muhammad Tariq & Khan, Saniya, 2008. "The Determinants of Private Investment and the Relationship between Public and Private Investment in Pakistan," MPRA Paper 49301, University Library of Munich, Germany.
    8. Eckhard Hein & Lena Vogel, 2009. "Distribution and Growth in France and Germany: Single Equation Estimations and Model Simulations Based on the Bhaduri/Marglin Model," Review of Political Economy, Taylor & Francis Journals, vol. 21(2), pages 245-272.
    9. Miguel Ramirez, 2007. "A Panel Unit Root and Panel Cointegration Test of the Complementarity Hypothesis in the Mexican Case: 1960–2001," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 35(3), pages 343-356, September.
    10. Zamanian Gholamreza & Pourshahabi Farshid & Shirazi Ali, 2010. "Interaction of Export Instability and Openness-Growth Nexus In East Asia and Pacific Countries (1990-2006)," American Journal of Economics and Business Administration, Science Publications, vol. 2(1), pages 39-44, March.
    11. Hein, Eckhard, 2018. "Inequality and growth: Marxian and post-Keynesian/Kaleckian perspectives on distribution and growth regimes before and after the Great Recession," IPE Working Papers 96/2018, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    12. Eckhard Hein, 2012. "Finance-dominated capitalism, re-distribution, household debt and financial fragility in a Kaleckian distribution and growth model," PSL Quarterly Review, Economia civile, vol. 65(260), pages 11-51.
    13. Giampaolo Gabbi & Elisa Ticci, 2014. "Implications of financialisation for sustainability," Working papers wpaper47, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    14. Cavallo, Eduardo & Daude, Christian, 2011. "Public investment in developing countries: A blessing or a curse?," Journal of Comparative Economics, Elsevier, vol. 39(1), pages 65-81, March.
    15. Erdal Atukeren, 2005. "Interactions Between Public and Private Investment: Evidence from Developing Countries," Kyklos, Wiley Blackwell, vol. 58(3), pages 307-330, July.
    16. Makuyana, Garikai & Odhiambo, Nicholas Mbaya, 2017. "Public and private investment and economic growth in South Africa:An empirical investigation," Working Papers 22005, University of South Africa, Department of Economics.
    17. Till van Treeck, 2008. "The political economy debate on ‘financialisation’ – a macroeconomic perspective," IMK Working Paper 01-2008, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    18. Garikai Makuyana & Nicholas M. Odhiambo, 2017. "Public and private investment and economic growth in Zimbabwe: An empirical test," Business and Economic Horizons (BEH), Prague Development Center, vol. 13(1), pages 60-76, March.
    19. Eckhard Hein, 2012. ""Financialization," distribution, capital accumulation, and productivity growth in a post-Kaleckian model," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 34(3), pages 475-496.
    20. repec:aer:wpaper:322 is not listed on IDEAS
    21. Eckhard Hein, 2012. "The Macroeconomics of Finance-Dominated Capitalism – and its Crisis," Books, Edward Elgar Publishing, number 14931.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:irapec:v:26:y:2012:i:5:p:597-622. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CIRA20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.