The Dynamics of Private Sector Development in Natural Resource Dependent Countries

Muhamad, Goran M.; Heshmati, Almas; Khayyat, Nabaz T.

doi:10.1080/1226508x.2020.1821745

Cited by 9 publications

(7 citation statements)

References 45 publications

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“…Credit to the private sector by banks and other financial institutions, bank credit and money supply as a percentage of GDP were used as proxies for bank expansion. Moreover, Muhamad et al (2020) examined private sector expansion to overcome the "resource curse" for NR producers between 1990 and 2017. Natural capital has been found to stimulate private sector expansion.…”

Section: Empirical Literature Reviewmentioning

confidence: 99%

The role of natural resources in financial expansion: evidence from Central Asia

Isiksal¹

2023

Financ Innov

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Central Asian States (CAS) have diverse natural resources. This research aims to shed light on the finance–natural resource’s association in the context of CAS namely Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan in 1996–2020 using the cross-sectionally augmented autoregressive distributed lag technique. It seeks to examine the research question, “What is the effect of natural resource wealth on the financial expansion (FE) of Central Asia?” The results demonstrated an inverted U-shaped association between financial growth and natural resource rents. It implies that natural resources are initially a “resource blessing” that later becomes a “resource curse.” Additionally, the effect of institutional quality (INQ) and human development (HD) on financial growth is examined. The results reveal that INQ and HD positively affect FE. Moreover, a bidirectional causal relationship exists between FE and INQ. Finally, all variables contribute to a long term FE. Based on these outcomes, the major policy recommendations are that the CAS authorities diversify their financial services and products and direct the proceeds from natural resource rents to effective investments particularly in HD. In addition, the social and political infrastructures in CAS must be restructured to achieve a high-quality institutional environment, which is necessary to increase the role of the private sector.

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Section: Empirical Literature Reviewmentioning

confidence: 99%

The role of natural resources in financial expansion: evidence from Central Asia

Isiksal¹

2023

Financ Innov

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“…Private sector development (PSD) is usually defined as a set of strategies aiming at strengthening the private sector for improving the welfare of people through economic diversification, sustainability, job creation and economic growth (Di Bella et al, 2013;Muhamad et al, 2020. This strategy cannot be a process lead by governments, but rather the government should provide conditions in which the private sector is able to grow (Atherton & Smallbone, 2013).…”

Section: Literature Reviewmentioning

confidence: 99%

“…Zhang et al (2018) find substantial effects of tax incentives on small enterprises and larger cash flow enterprises in China. Muhamad et al (2020); Osei-Kyei & Chan (2017); Sinha et al (2001) combined several macro factors that affect the development of the private sector, namely the economic system and policies, political system and governance, and the social and cultural context. The economic policy of governments as described by Adelina-Geanina (2011); Getahun & Villanger (2019) includes systems for setting levels of taxation, subsidisation, government budgets, and interest rates as well as the labour market and national ownership.…”

Section: Literature Reviewmentioning

confidence: 99%

“…As such, the KRG has been reinforcing regulatory environment for the development of private sector aiming at diversifying the economy. Private sector development has a critical role in overcoming the challenges of the resource curse and diversification of the economy (Muhamad et al, 2020. As a result, the number of private sector companies, both local and foreign, has increased dramatically from 4866 in 2006 to 24209 in 2016.…”

Section: Introductionmentioning

confidence: 99%

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Private Sector Development Analysis in Post-Conflict Kurdistan Region of Iraq

Muhamad

2022

UKHJSS

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Private sector development (PSD) has been a vital part of the Kurdistan Regional Government (KRG)’s economic development policy since the very beginning of the development of the region. The objective of this paper is to critically analyse private sector development in post-conflict Kurdistan Region of Iraq (KRI). A qualitative method of critical review to the development of private sector in the use of official documents is used from 2006 to 2016. It is concluded that because of the key challenges facing the private sector and a weak synergy between private and public sector, the KRG polices, and the experience of private sector were not effective in favour of the economy of Kurdistan. This was possibly due to the failure of the KRG in monitoring and evaluating the impact of those polices, political consideration in the way of doing business, internal conflict, and poor institutional system of the region. Public policy implication of this study is that there must be a close tied up of PSD programme to governance and interventions of peacebuilding. Most importantly, promoting the rule of law in the way that political actors should have neither influence on legal system nor on businesses.

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“…With over 40 mineral reserves, including gold, coal, gypsum, and clay, the industry has the potential to generate huge revenue and jobs after implementing reforms and improving infrastructure. As shown by Muhamad et al (2020), rents from natural resources can boost private sector growth since countries with natural resources adjust more quickly than those without. The extractive and manufacturing prospects could be exploited by establishing fully functional free trade zones (FTZs).…”

Section: Literature Reviewmentioning

confidence: 99%

What role does private sector development play in Nigeria’s economic growth?

Awoyemi

Aiyegbusi

2022

Problems and Perspectives in Management

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Many studies have concluded that private sector development encourages economic growth due to many public enterprises’ poor performance and technological deficiencies. However, other studies have noted that private sector development would lead to the misuse of monopoly power. Since the advocacy is from two different perspectives, there is a need to investigate further the impact of private sector development on the country’s economy. The bounds cointegration test examined the long-term relationship between privatization and GDP growth. The long- and short-term connections between private sector development and GDP growth were studied using an Auto-Regressive Distributed Lag (ARDL) model. As a result, economic growth was found to be highly influenced by gross capital formation and market capitalization of domestic listed enterprises as a share of GDP, according to the ARDL estimates in the short term. In addition, the periods after privatization increase growth by about 0.23% in the short run and by 3.87% in the long run, at a 1% significance level. At a 1% significance level, gross capital formation and market capitalization of domestic listed enterprises as a share of GDP positively affected economic growth in the long term. This led to the conclusion that private sector development positively influences Nigerian economic growth in both the long- and short-term. This study recommends policy changes such as raising domestic investment and promoting privatization, capital market development, and financial institution development. This will stimulate private sector development and have a favorable impact on economic growth. AcknowledgmentsWe appreciate the feedback from our unnamed reviewers, the Journal’s editor, and the authors whose works were referenced. In addition, we acknowledge the support of our colleagues from the Economics Department, Afe Babalola University Ado-Ekiti, for their helpful feedback to improve this study.

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The Dynamics of Private Sector Development in Natural Resource Dependent Countries

Cited by 9 publications

References 45 publications

The role of natural resources in financial expansion: evidence from Central Asia

The role of natural resources in financial expansion: evidence from Central Asia

Private Sector Development Analysis in Post-Conflict Kurdistan Region of Iraq

What role does private sector development play in Nigeria’s economic growth?

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