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Public Spending and Private Investment: Evidence From Greece

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  • E. C. Mamatzakis

Abstract

The aim of this paper is to investigate whether there is a link between disaggregated measures of government expenditures and private investment in Greece. A cointegration analysis of a multivariate system of equations is applied in order to empirically estimate the long run relationships between private investment and different measure of government expenditures. Subsequently IRF and VDC are estimated. Government investment is found to assert a positive effect on private investment, supporting in this way the capital accumulation process. On the other hand, government consumption appears to compete for the same resources with government investment, while it negatively affects private investment. [E62]

Suggested Citation

  • E. C. Mamatzakis, 2001. "Public Spending and Private Investment: Evidence From Greece," International Economic Journal, Taylor & Francis Journals, vol. 15(4), pages 33-46.
    • Handle: RePEc:taf:intecj:v:15:y:2001:i:4:p:33-46
    DOI: 10.1080/10168730100000051
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    References listed on IDEAS

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    7. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-1580, November.
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    9. B. Kolluri & D. Giannaros & M. Panik & Mark Anderson, 1997. "Empirical analysis of the effects of government spending on private investment," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 3(1), pages 124-124, February.
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    1. Cevik, Serhan, 2020. "You are suffocating me: Firm-level analysis of state-owned enterprises and private investment," Journal of Comparative Economics, Elsevier, vol. 48(2), pages 292-301.
    2. Zhang, Zuomin & Dai, Ling, 2023. "The bank loan distribution effect of government spending expansion: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 89(C).
    3. Pearl Kemunto Evans & Dr. Peter Kariuki & Dr. Fredrick Wafula, 2022. "Effect Of Fiscal Policy On Foreign Direct Investment Inflows In Kenya," International Journal of Finance and Accounting, IPRJB, vol. 7(1), pages 33-59.
    4. Ghassan, Hassan B. & Alhajhoj, Hassan R., 2008. "ما هي طبيعة العلاقة بين الإنفاق الحكومي والإستثمار الخاص في الإقتصاد السعودي؟ [What is the Nature of the Relationship between Government Spending and Private Investment in Saudi Arabia?]," MPRA Paper 56377, University Library of Munich, Germany, revised 11 Jan 2009.

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