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The Determinants of Private Investment in a Mining Export Economy. Peru: 1997-2017

Author

Listed:
  • Waldo Mendoza Bellido

    (Departamento de Economía de la Pontificia Universidad Católica del Perú)

  • Erika Collantes Goicochea

    (Departamento de Economía de la Pontificia Universidad Católica del Perú)

Abstract

Peru is an economy where about 60 percent of exports are mineral, of which copper, in turn, represents half. What is the weight of international factors and domestic factors in determining private investment in this mining export economy? In this paper, we identify the dominant influence of international conditions on the evolution of private investment in Peru, as well as the enormous individual weight of the price of exports in this evolution. In the period 1997-2017, external factors explained 54, 64 and 44 percent of the variance in the growth rate of total private investment, mining investment, and non-mining investment, respectively; while more than half of the weight of external factors was explained by the price of exports. On the other hand, internal factors explained 46, 36 and 56 percent of the variance in the growth rate of total private investment, mining investment. and non-mining investment; while about 40 percent of the weight of domestic factors was explained by public investment. These findings are important because they show the price of exports to be the main channel connecting private investment in Peru with the world economy, and public investment as the most effective policy variable affecting it. JEL Classification-JEL: C32 , E22 , E32 , H54 , L72 , L74 Keywords: Decomposition of Variance, Historical Decomposition, Fluctuaciones, Impulse-response, Private Mining Investment, non-mining private investment, Total private investment, Public investment , Export price

Suggested Citation

  • Waldo Mendoza Bellido & Erika Collantes Goicochea, 2018. "The Determinants of Private Investment in a Mining Export Economy. Peru: 1997-2017," Documentos de Trabajo / Working Papers 2018-463, Departamento de Economía - Pontificia Universidad Católica del Perú.
    • Handle: RePEc:pcp:pucwps:wp00463
    DOI: 10.18800/2079-8474.0463
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    References listed on IDEAS

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    1. Waldo Mendoza, 2018. "Macroeconomía intermedia para América Latina," Libros PUCP / PUCP Books, Fondo Editorial - Pontificia Universidad Católica del Perú, edition 3, number lde-2018-04.
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    7. Waldo Mendoza Bellido & Erika Collantes Goicochea, 2017. "La economía de PPK. Promesas y resultados: la distancia que los separa," Documentos de Trabajo / Working Papers 2017-440, Departamento de Economía - Pontificia Universidad Católica del Perú.
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    12. Waldo Mendoza Bellido & Erika Collantes Goicochea, 2018. "Private Investment in a Mining Export Economy: a Model for Peru," Documentos de Trabajo / Working Papers 2018-460, Departamento de Economía - Pontificia Universidad Católica del Perú.
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    Cited by:

    1. Mauricio Alvarado & Gabriel Rodríguez, 2024. "Time-Varying Effects of Financial Uncertainty Shocks on Macroeconomic Fluctuations in Peru," Documentos de Trabajo / Working Papers 2024-531, Departamento de Economía - Pontificia Universidad Católica del Perú.
    2. Alexander Meléndez Holguín & Gabriel Rodríguez, 2023. "Evolution over time of the effects of fiscal shocks in the peruvian economy: empirical application using TVP-VAR-SV models," Documentos de Trabajo / Working Papers 2023-516, Departamento de Economía - Pontificia Universidad Católica del Perú.
    3. Waldo Mendoza Bellido, 2020. "La dinámica de la inversión privada. El modelo del acelerador flexible en una economía abierta," Documentos de Trabajo / Working Papers 2020-490, Departamento de Economía - Pontificia Universidad Católica del Perú.

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    More about this item

    Keywords

    decomposition of variance; historical decomposition; fluctuaciones; impulse-response; private mining investment; non-mining private investment; total private investment; public investment ; export price;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • L72 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Other Nonrenewable Resources
    • L74 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Construction

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