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Public and Private Investment and Economic Growth in Zambia: A Dynamic Approach

Garikai Makuyana and Nicholas Odhiambo ()
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Garikai Makuyana: Department of Economics, University of South Africa, Pretoria, South Africa

Economia Internazionale / International Economics, 2018, vol. 71, issue 4, 503-526

Abstract: This paper investigated the dynamic contributions of public and private investment to economic growth in Zambia during the 1970 to 2014 period. In the analysis, the paper also estimated the important indirect contribution of public investment to economic growth through its crowding effect on private investment. The study employed the autoregressive distributed lag (ARDL) model in estimating the economic growth and private investment models. The empirical evidence from the study shows that private investment contributes more to economic growth than public investment in Zambia in the short run and long run. In addition, gross public investment, infrastructural and non-infrastructural public investment are found to crowd out private investment in the short run; while non-infrastructural public investment had a long run crowding out effect on private investment. The results imply that the long-run contributions of both private and public investment to economic growth in Zambia can be improved by raising the infrastructural public investment. Investimenti pubblici e privati e crescita economica nello Zambia: un approccio dinamico Questo studio analizza il contributo dinamico degli investimenti pubblici e privati alla crescita economica nello Zambia dal 1970 al 2014. In questa analisi è incluso anche l’importante contributo che gli investimenti pubblici portano alla crescita attraendo gli investimenti privati. Lo studio utilizza il modello ARDL (autoregressive distributed lag) per la valutazione della crescita economica e degli investimenti privati. Vi sono evidenze empiriche che gli investimenti privati contribuiscono più di quelli pubblici alla crescita economica nello Zambia, sia nel breve che nel lungo periodo. Inoltre importanti investimenti pubblici, infrastrutturali e non, risultano avere un effetto spiazzamento sugli investimenti privati nel lungo periodo. I risultati della ricerca implicano che i contributi degli investimenti sia privati che pubblici alla crescita economica nello Zambia possono essere migliorati aumentando gli investimenti pubblici nelle infrastrutture.

Keywords: Zambia; Public Investment; Private Investment; Economic Growth; Crowding in Effect; Crowding out Effect; ARDL Model (search for similar items in EconPapers)
JEL-codes: E22 O47 P12 (search for similar items in EconPapers)
Date: 2018
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Working Paper: Public and private investment and economic growth in Zambia: A dynamic approach (2016) Downloads
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