Private, Public and Foreign Investment Nexus in Pakistan: An Empirical Analysis of Crowding-In/Out Effects

Abbas, Ahsan; Ahmed, Eatzaz

doi:10.32368/fjes.20191508

Cited by 4 publications

(3 citation statements)

References 56 publications

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“…Farla et al (2016) identify that crowding-in between domestic investment and FDI may exist due to public investment for both long and short spans of time, however, the case is not true for private investment. Using the Vector Error Correction Model (VECM), Abbas and Ahmed (2019) declare that the source and nature of FDI play a vital role in forming its effect on domestic investment. Ahmed et al (2015) attempt to evaluate together the crowding out, neutral, and crowding effects of FDI by considering different sectors.…”

Section: Literature Reviewmentioning

confidence: 99%

Investigating the Crowding Out Effect of Foreign Direct Investment in South Asian Economies

Naqvi

Noman

2022

JAEBS

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Foreign Investment (FDI) in developing economies affects the supply of capital affecting local investment. This international practice can either be analyzed through substitution effect (crowding-out) or complementary effect (crowding-in). The former discourages local investors due to competitive pressure while the latter impacts the demand of domestic suppliers. This study intends to explore whether FDI crowds out domestic investment or not. The study analyzed the FDI-led capital formation hypothesis considering the panel data of South Asian economies for the time span of 1991- 2021. The study has utilized the fixed effect, FMOLS and DOLS techniques to analyze the data using FDI inflows. The empirical evidence of the study affirms the crowding in effect for the selected South Asian economies, The study suggests that internationalization, financial inclusion and |macroeconomic stability are potential channels to foster domestic capital in South incl countries.

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Section: Literature Reviewmentioning

confidence: 99%

Investigating the Crowding Out Effect of Foreign Direct Investment in South Asian Economies

Naqvi

Noman

2022

JAEBS

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“…Adegboye & Alimi (2017) in the case of Nigeria, using the ARDL estimation approach, suggest crowding-out effect of public investment over private investments, and no complementarity but substitution effect between the two variables. Abbas & Ahmed (2019) examine the nexus between the three categories of investments: private, public, and foreign investments for Pakistan. Their findings suggest crowding-out effect and substitutability among the three types of investments however, also strong positive impact of all on the economic growth.…”

Section: Literature Reviewmentioning

confidence: 99%

Public, Private and Foreign Investment Nexus in the Republic of North Macedonia: Crowding-in or Out Effect?

Andonova

2022

EB&D

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The levelsof investments in North Macedonia have beenperceived for a long time assub-optimal, with significant capital budget bias, with regularly overestimated plans vs. outturn. The research problem elaborated is whether the structure of investments matters. Thus the objectiveof the article is to examine if there is a complementarity or substitutability between public and private investment, as well as the role of foreign direct investments in this nexus. Within the paperthe hypothesis of existence of crowding-in or crowding-out effectof the public investmentand foreign direct investment exert over private investment in North Macedoniais tested. The crowding-in and –out effect is tested with an autoregressive distributed lag bound testing. The results indicate crowding-out effect of public over private investments,with significanceof the foreign direct investments variable and at the same time crowding-in effect of foreign direct investments over private domestic investments. The crowding-out effect is immediate and short run.The results imply of a need for closer examination of the fiscal policies for public investment with efforts for improved public investment performance processes.

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“…According to Bussolo and Medvedev (2012), uncertainty in politics can increase poverty through its impact on economic growth, as well as through its effect on government spending and social programs. Similarly, Abbas and Ahmed (2019) examine the relationship between uncertainty in politics and poverty in Pakistan and find that uncertainty in politics has a significant positive effect on poverty levels in the country. Muhammad et al (2020) examines the impact of uncertainty in politics on poverty levels in Pakistan and finds that uncertainty in politics increases poverty by reducing economic growth and investment.…”

Section: Uncertainty In Politics and Povertymentioning

confidence: 99%

Political Unsteadiness and Economic Retardation in Pakistan

Shakoor¹

2022

JREFM

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This study aims to investigate the association between uncertainty in politics and economic retardation in Pakistan, which has been grappling with various political and economic obstacles, such as corruption, frequent government changes, and inadequate investments in infrastructure and human capital. The study utilizes a qualitative methodology and examines secondary data sources, including academic publications, government reports, and international organization reports. A thematic analysis approach is employed to identify the key themes and patterns associated with political uncertainty and retardation in economic activities in Pakistan. The research findings indicate that political uncertainty has a considerable negative impact on the growth of economic activities in Pakistan. Frequent changes in government and a lack of accountability have caused corruption, poor resource management, and a dearth of investment in infrastructure and human capital, resulting in a stagnant economy, high unemployment, poverty, and fewer opportunities for vulnerable populations. The study suggests that several potential solutions can help promote economic growth and stability in Pakistan, including strengthening institutions and governance, promoting economic opportunities, prioritizing human capital development and education, and establishing social protection programs. The implementation of these solutions necessitates long-term commitment and sustained efforts from policymakers, civil society organizations, and the private sector. The research concludes by highlighting the research's limitations and the requirement for further investigation to deepen understanding of the challenges faced by Pakistan. However, the study's findings and recommendations provide critical insights into the relationship between uncertainty in politics and retardation in economic activities in Pakistan, offering potential solutions to enhance the growth of economic activities and stability in the country.

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Private, Public and Foreign Investment Nexus in Pakistan: An Empirical Analysis of Crowding-In/Out Effects

Cited by 4 publications

References 56 publications

Investigating the Crowding Out Effect of Foreign Direct Investment in South Asian Economies

Investigating the Crowding Out Effect of Foreign Direct Investment in South Asian Economies

Public, Private and Foreign Investment Nexus in the Republic of North Macedonia: Crowding-in or Out Effect?

Political Unsteadiness and Economic Retardation in Pakistan

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