Public and private investment and economic growth in Zimbabwe: An empirical test

Garikai Makuyana and Nicholas Odhiambo

Business and Economic Horizons (BEH), 2017, vol. 13, issue 01

Abstract: This study performs an examination on the impact of public and private investment on economic growth and the crowding effect of public investment on private investment in Zimbabwe from 1970 to 2014. The study utilised the newly developed autoregressive distributed lag-bounds testing approach with better small sample properties than the traditional cointegration techniques. The results show that public investment has a higher short-run growth impact, but in the long run the private investment-led growth is more important. In addition, while gross public investment crowds out private investment, infrastructural public investment has a long-run crowding in effect. A non-infrastructural public investment was also reported to have a short-run crowding out effect on private investment. The results suggest that the productivity of public and private investment in Zimbabwe can be improved by cutting back on non-infrastructural public investment to basic minimum level while stimulating the growth in infrastructural public investment.

Keywords: Financial; Economics (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Public and private investment and economic growth in Zimbabwe: An empirical test (2017)
Working Paper: Public and private investment and economic growth in Zimbabwe: An empirical test (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pdcbeh:264626

DOI: 10.22004/ag.econ.264626

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