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Role of Public Expenditures and Macroeconomic Uncertainty in Determining Private Investment in Large Scale Manufacturing Sector of Pakistan

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  • Ahmad, Imtiaz
  • Qayyum, Abdul

Abstract

Considering the importance of large scale manufacturing sector in Pakistan economy we analysed investment behavior of private sector in large scale manufacturing. The main emphasis in this paper has been to explore the role of public expenditures development and non development) and macroeconomic uncertainty in determining private sector’s fixed investment in large scale manufacturing. It is found that most of the series are non-stationary and there is one cointegrating relationship between the private investment, public consumption expenditures, public development expenditures and size of market. The dynamic ECM model of private investment indicates public development expenditures enhance the private investment whereas non-development expenditures and macroeconomic uncertainty negatively affect private investment.

Suggested Citation

  • Ahmad, Imtiaz & Qayyum, Abdul, 2009. "Role of Public Expenditures and Macroeconomic Uncertainty in Determining Private Investment in Large Scale Manufacturing Sector of Pakistan," MPRA Paper 29268, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:29268
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    References listed on IDEAS

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    Cited by:

    1. Amber Fatima & Abdul Waheed, 2014. "Economic uncertainty and growth performance: a macroeconomic modeling analysis for Pakistan," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(3), pages 1361-1387, May.
    2. Hafsa Hina, 2021. "Why Do We Have Less Investment Than China and India?," PIDE Knowledge Brief 2021:36, Pakistan Institute of Development Economics.
    3. Jun Wen & Samia Khalid & Hamid Mahmood & Xiuyun Yang, 2022. "Economic policy uncertainty and growth nexus in Pakistan: a new evidence using NARDL model," Economic Change and Restructuring, Springer, vol. 55(3), pages 1701-1715, August.
    4. Hafsa Hina, 2021. "Why do We Have Less Investment than China and India?," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 60(2), pages 213-224.
    5. Ahsan Abbas & Eatzaz Ahmed & Fazal Husain, 2019. "Political and Economic Uncertainty and Investment Behaviour in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 58(3), pages 307-331.

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    More about this item

    Keywords

    Private Investment; Public Expenditures; Macroeconomic-uncertainty; Largescale; Cointegration; ecrror correction; pakistan Manufacturing; Cointegration; Pakistan.;
    All these keywords.

    JEL classification:

    • N65 - Economic History - - Manufacturing and Construction - - - Asia including Middle East
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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