What Determines Private Investment? The Case of Pakistan

Sajawal Khan (lodhiphd@yahoo.com) and Muhammad Khan

Finance Working Papers from East Asian Bureau of Economic Research

Abstract: This study is an attempt to analyse the determinants of private investment in Pakistan over the period 1972-2005. The ARDL co-integration approach is employed to check the existence of a long-run relationship as well as short-run dynamics of investment. The results show that most traditional factors have little or no impact on private investment. These results may support the idea that nontraditional factors such as quality of institutions, governance, entrepreneurial skill, etc., are prerequisites for private investment to flourish. We find partial support for the accelerator principle and the crowding-out hypothesis in the case of Pakistan. However, the hypothesis that the volume of the funds is as important as the cost of the funds used in financing private investment and the McKinnon-Shaw hypothesis are not verified in the case of Pakistan.

Keywords: Private Investment; Growth; Crowding Out; co-integration (search for similar items in EconPapers)
JEL-codes: C20 E22 O40 Z10 (search for similar items in EconPapers)
Date: 2007-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://www.eaber.org/node/22202 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 301 [REDIRECT LOOP] Moved Permanently (http://www.eaber.org/node/22202 [301 Moved Permanently]--> https://www.eaber.org/node/22202 [301 Moved Permanently]--> https://www.eaber.org/node/22202 [301 Moved Permanently]--> https://www.eaber.org/node/22202 [301 Moved Permanently]--> https://www.eaber.org/node/22202 [301 Moved Permanently]--> https://www.eaber.org/node/22202 [301 Moved Permanently]--> https://www.eaber.org/node/22202 [301 Moved Permanently]--> https://www.eaber.org/node/22202)

Related works:
Working Paper: What Determines Private Investment? The Case of Pakistan (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eab:financ:22202

Access Statistics for this paper

More papers in Finance Working Papers from East Asian Bureau of Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Shiro Armstrong (shiro.armstrong@anu.edu.au).