PUBLIC AND PRIVATE CAPITAL FORMATION AND ECONOMIC GROWTH IN MALAYSIA, 1961-1995

Mansor Ibrahim

IIUM Journal of Economics and Management, 2000, vol. 8, issue 1, 21-40

Abstract: This paper analyzes the productivity of public and private capital formation in a developing economy, Malaysia, using annual data from 1961 to 1995. The analysis is based on neoclassical growth regression, where the transition to the steady-state level of income per capita is modeled using an error correction framework. The results suggest that the public investment has been unproductive over the periods under consideration. Consistent with existing empirical studies, the private investment rate and the export performance of the country are positively related to economic growth. Our results call for a reduction in the public capital formation. However, for this recommendation to be more convincing, we believe that further analyses are much needed to examine which types of public capital are unproductive.

Keywords: Cointegration; Economic growth; Public capital (search for similar items in EconPapers)
JEL-codes: C22 E22 E69 O49 O53 (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ije:journl:v:8:y:2000:i:1:p:21-40

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