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Private Investment in Developing Countries: An Empirical Analysis

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  • Joshua Greene

    (International Monetary Fund)

  • Delano Villanueva

    (International Monetary Fund)

Abstract

The effects of several policy and other macroeconomic variables on the ratio of private investment to gross domestic product in developing countries during 1975-87 is analyzed. Econometric evidence indicates that the rate of private investment is positively related to real GDP growth, level of per capita GDP, and the rate of public sector investment, and negatively related to real interest rates, domestic inflation, the debt-service ratio, and the ratio of debt to GDP. The impact of most variables was greatest before the 1982 debt crisis, but the ratio of debt to GDP has since become more important.

Suggested Citation

  • Joshua Greene & Delano Villanueva, 1991. "Private Investment in Developing Countries: An Empirical Analysis," IMF Staff Papers, Palgrave Macmillan, vol. 38(1), pages 33-58, March.
    • Handle: RePEc:pal:imfstp:v:38:y:1991:i:1:p:33-58
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    References listed on IDEAS

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    1. Bischoff, Charles W, 1969. "Hypothesis Testing and the Demand for Capital Goods," The Review of Economics and Statistics, MIT Press, vol. 51(3), pages 354-368, August.
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