Selected Macroeconomic Variables Affecting Private Investment in Malawi

Maganga Assa and Abdi-Khalil Edriss

MPRA Paper from University Library of Munich, Germany

Abstract: This study provides an empirical test of the macroeconomic variables that can potentially affect private investment decisions in Malawi in a short and long run perspective using time series data. Both the theory and the empirical literature are reviewed in order to identify a private investment function for the last three decades (1979-2009). The results reveal that investment decisions seem to be determined by public investment, bank credit to the private sector and the real interest rate in the short run. Besides, there is evidence of a crowding-out effect of public investment. In the long run, the capital accumulation path seems to be closely dependent on both GDP growth and real exchange rates.

Keywords: Co-integration; Crowding-out; Error Correction Model; Malawi; Private investment (search for similar items in EconPapers)
JEL-codes: E62 (search for similar items in EconPapers)
Date: 2012-03-19
New Economics Papers: this item is included in nep-afr and nep-mac
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:40698

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