The Determinants of Private Investment in a Mining Export Economy. Peru: 1997-2017

Waldo Mendoza and Erika Collantes ()

No 2018-463, Documentos de Trabajo / Working Papers from Departamento de Economía - Pontificia Universidad Católica del Perú

Abstract: Peru is an economy where about 60 percent of exports are mineral, of which copper, in turn, represents half. What is the weight of international factors and domestic factors in determining private investment in this mining export economy? In this paper, we identify the dominant influence of international conditions on the evolution of private investment in Peru, as well as the enormous individual weight of the price of exports in this evolution. In the period 1997-2017, external factors explained 54, 64 and 44 percent of the variance in the growth rate of total private investment, mining investment, and non-mining investment, respectively; while more than half of the weight of external factors was explained by the price of exports. On the other hand, internal factors explained 46, 36 and 56 percent of the variance in the growth rate of total private investment, mining investment. and non-mining investment; while about 40 percent of the weight of domestic factors was explained by public investment. These findings are important because they show the price of exports to be the main channel connecting private investment in Peru with the world economy, and public investment as the most effective policy variable affecting it. JEL Classification-JEL: C32 , E22 , E32 , H54 , L72 , L74 Keywords: Decomposition of Variance, Historical Decomposition, Fluctuaciones, Impulse-response, Private Mining Investment, non-mining private investment, Total private investment, Public investment , Export price

Pages: 47
Date: 2018
New Economics Papers: this item is included in nep-mac
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