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

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  • 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.

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  • 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
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    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.

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