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Comparative Analysis of the Determinants and Behaviour of Investment Demand between South Africa and Zimbabwe

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  • Sambulo Malumisa

Abstract

The study investigates the determinants of private investment in South Africa and Zimbabwe employing annual data over the 1980-2010 periods. The influence of gross domestic product (GDP), government debt, inflation, and interest rate policies are considered. Applied vector autoregressive and error correction models are used to estimate long- and short-run relationships among variables. The results suggest that GDP has a positive effect on private investment. Government debt has a crowding out effect on private investment, and inflation is shown to negatively affect investment. Increases in interest rates discourage private investment in South Africa

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  • Sambulo Malumisa, 2013. "Comparative Analysis of the Determinants and Behaviour of Investment Demand between South Africa and Zimbabwe," Journal of Economics and Behavioral Studies, AMH International, vol. 5(6), pages 385-397.
    • Handle: RePEc:rnd:arjebs:v:5:y:2013:i:6:p:385-397
    DOI: 10.22610/jebs.v5i6.413
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