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Public-Private Investment and Macroeconomic Determinants: Evidence from MENA Countries

Nader Alber and Vivian Bushra Kheir

International Journal of Economics and Finance, 2019, vol. 11, issue 1, 15-27

Abstract: This paper attempts to demonstrate the relationship between macroeconomic factors and each of Private Investment in Energy (PIE) and Private Investment in Telecoms (PIT) from 1990 to 2016 in 21 MENA countries (Algeria, Bahrain, Djibouti, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Malta, Morocco, Oman, Qatar, Saudi Arabia, Syria, Tunisia, United Arab Emirates, Palestine and Yemen). Results reveal that both PIE and PIT are Granger caused by GDP, Real Interest Rate, Gross fixed capital formation, private sector, stocks traded are Granger causing PIE. Also, Inflation, Exports of goods and services and Commercial bank branches are Granger causing PIT. All of the ten macroeconomic variables taken up in study are cointegrated with Investment in energy and telecoms with private participation in the long run. Besides, shocks to all of GDP, gross fixed capital formation, private sector to GDP, general government final consumption expenditure, stocks traded and commercial bank branches (as a proxy of financial inclusion) have a positive and statistically significant effect on the private investment in energy and telecoms.

Keywords: financial inclusion; Granger causality test; impulse response analysis; Johansen¡¯s cointegration test; macroeconomic factors; private participation investment; unit root; vector auto regression (search for similar items in EconPapers)
JEL-codes: R00 Z0 (search for similar items in EconPapers)
Date: 2019
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Handle: RePEc:ibn:ijefaa:v:11:y:2019:i:1:p:15-27