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The Impact of Business Regulatory Quality on Private Sector Investment in Botswana

Author

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  • Kedibonye Sekakela

    (Botswana Institute for Development Policy Analysis)

Abstract

A market-friendly regulatory environment is key for private sector investment. In this paper, we examine the impact of business regulatory quality on private sector investment in Botswana. The paper finds that the business regulatory environment stimulates private sector investment in the long term and this phenomenon occurs when the quality of bureaucracy improves, among other factors. Other critical factors affecting private sector investment examined in this paper include; corporate credit, output and public infrastructure investment. Private sector investment responds positively to increases in corporate credit in the short term but not responsive in the long term. Economic activities support private sector investment positively but weak. On the other hand, public infrastructure investment crowds in(out) investment in the short and long term respectively. Policy wise, Botswana should further deepen its efforts towards creating a market-friendly regulatory environment and also consider how business regulatory quality interact with other policy variables for better investment and growth outcomes.

Suggested Citation

  • Kedibonye Sekakela, 2019. "The Impact of Business Regulatory Quality on Private Sector Investment in Botswana," Working Papers 67, Botswana Institute for Development Policy Analysis.
    • Handle: RePEc:bid:wpaper:67
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    File URL: http://knowledge.bidpa.bw:8080/xmlui/handle/123456789/79
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    Citations

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    Cited by:

    1. Tshepiso Gaetsewe, 2020. "Characteristics of Firms in Botswana's Informal Economy," Working Papers 74, Botswana Institute for Development Policy Analysis.
    2. Tebogo B. Seleka, 2020. "Targetting Effectiveness of Social Transfer Programs in Botswana:Means-tested versus Categorical and Self-selected instruments," Working Papers 72, Botswana Institute for Development Policy Analysis.

    More about this item

    Keywords

    Botswana; Private sector; Investment; Regulation; structural factors; Vector Autoregressive Model(VECM);
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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