Factors Affecting Investment in Developing Countries: A Panel Data Study

Salahuddin, Mohammad; Islam, Md. Rabiul

doi:10.1353/jda.0.0011

Cited by 19 publications

(5 citation statements)

References 59 publications

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“…They find that national income per capita is positively associated with growth in private sector investment, while real interest rate and inflation rate are negatively associated with growth in private sector investment. However, using panel data for 97 developing countries from 1973 to 2002 to investigate the factors that affect investment in developing countries, Salahuddin and Islam (2008) show that real interest rate is not important for explaining cross-country differences in the level of investment.…”

Section: Literature Reviewmentioning

confidence: 98%

Monetary Policy and Domestic Investment in Nigeria: The Role of the Inflation Rate

Ezeibekwe

2020

Economics and Business

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Economic theory suggests that monetary policy can be used to stabilize an economy. However, the ability of monetary policy targets—interest rates and money supply—to stabilize an economy depends on their ability to achieve price stability. Using data from 1981 to 2018 and applying the vector error correction model, this paper seeks to determine how the changes in the inflation rate affect the ability of monetary policy tools to stabilize the Nigerian economy and stimulate investment. Empirical results suggest that the impact of the interest rates on investment depends on the level of the inflation rate. The size of the effect of interest rates on investment gets weaker as the inflation rate increases suggesting that monetary policy tools, such as the monetary policy rate (MPR), that directly change the interest rates are robust stabilization tools during periods of declining inflation rates but not relevant during periods of rising inflation rates. This is attributable to low bank lending rates. Additionally, the impact of the money supply target on investment does not depend on the level of the inflation rate. This suggests that monetary policy tools, such as open market operations, that directly change the money supply can be relevant stabilization tools during economic booms and recessions. As a result, the Central Bank of Nigeria should work to deepen the scale, capacity, and efficiency of its open market operations by ensuring that most of the people can participate with minimal transaction cost and by making different financial instruments available.

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Section: Literature Reviewmentioning

confidence: 98%

Monetary Policy and Domestic Investment in Nigeria: The Role of the Inflation Rate

Ezeibekwe

2020

Economics and Business

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“…However, the influence of capital accumulation on economic growth depends on the factors determining the accumulation of capital and their intensity [82, p. 2]. Although the literature dealing with the identification of factors that shape the overall level of investments in a country is very scarce (e.g., [74]), combining research that explores the determinants of various types of investments (public and private, domestic, and foreign) leads to a large number of factors that affect the overall level of investments in the country. Some of the most frequently identified factors in the theoretical and empirical literature belong to the group of macroeconomic drivers.…”

Section: Theoretical Framework and Literature Reviewmentioning

confidence: 99%

“…Besides the previous determinants that are commonly emphasized in the literature, investments are also influenced by infrastructure and technological development [14], [48], social factors like labor force, its education and skills, as well as demographic trends [63], international trade determinants like trade openness [35], [74], etc.…”

Section: Theoretical Framework and Literature Reviewmentioning

confidence: 99%

Required level of investment for fast economic growth: Stylized facts and policies

Ranđelović,

Đorđević

2024

Ekonomika preduzeća

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To close the gap in economic development relative to the EU average, Serbian economy has to achieve significantly higher growth rates in comparison to other European countries over the longer period. Theoretical and empirical literature indicates that the level of investment in physical capital is one of the key determinants of the dynamics of economic growth. In this paper, based on data on investments and savings in Serbia and in 37 countries that in the previous three decades achieved an average GDP growth rate of over 5% per year (so-called fast-growing economies - FGE), we present and analyze relevant stylized facts. In the observed period, FGE had average total investments of 25.6% of GDP, of which 69% was private and 31% public investments, whereby private investments were predominantly domestic, which is associated with a high rate of gross domestic savings (of 27.4% of GDP). On the other hand, total investments in Serbia were 9.7% of GDP lower than the FGE average, which was a consequence of significantly lower public and domestic private investments, which was, among other things, a consequence of significantly lower domestic savings (by over 20% of GDP). As in the recent period there has been a noticeable increase in public investments in Serbia, in order to accelerate economic growth, it is necessary, in addition to maintaining them at a high level, to encourage a considerable increase in domestic private investments through economic measures policy and wider reforms of the general institutional environment, with the aim of having the total level of investments of over 25% of GDP over the next few decades.

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“…Jordan has proved its economic openness on the international markets through the multiple trials to attract foreign investment on its land (Salahuddin and Islam, 2008). With the ongoing adoption of technology and internet, Jordan's need of foreign investments increased in order to be able to keep up with the universal changes in terms of politics and economy.…”

Section: Problem Statementmentioning

confidence: 99%

Developing in Investment Environment in Jordan from the Perspective of Jordan Investments Commission

Al-Froukh¹

2019

IJBM

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Globalization; along with its developed technology and wide opened window has facilitated interaction between countries that surpassed import and export. Attracting foreign investments to a country is an added value which helps in developing the workforce within the country and get use from different experiences that other countries employ. From that point, current study seeks to examine the influence of a group of CSF on the investment environment in Jordan from the perspective of Jordan Investment Commission. In order to achieve the aim of study, (412) questionnaire were distributed on senior managers, managers and tram leaders within JIC. Results of study indicated that foreign direct investment is a real means to achieve a number of objectives, including: decrease unemployment, exploitation of natural resources, contribution to the increase of GDP, the abundance of goods for domestic markets, increased exports, and technology transfer. What is important to us in all this is the transfer of technology from developed countries with direct investments to the host countries of this investment, where the transfer of the most efficient and developed means of production, since the foreign investor is always looking for the greatest return through investments in other countries, Create appropriate conditions for this.

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Factors Affecting Investment in Developing Countries: A Panel Data Study

Cited by 19 publications

References 59 publications

Monetary Policy and Domestic Investment in Nigeria: The Role of the Inflation Rate

Monetary Policy and Domestic Investment in Nigeria: The Role of the Inflation Rate

Required level of investment for fast economic growth: Stylized facts and policies

Developing in Investment Environment in Jordan from the Perspective of Jordan Investments Commission

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