Public and private investment and economic growth in Zimbabwe: An empirical test

This study performs an examination on the impact of public and private investment on economic growth and the crowding effect of public investment on private investment in Zimbabwe from 1970 to 2014. The study utilised the newly developed autoregressive distributed lag-bounds testing approach with better small sample properties than the traditional cointegration techniques. The results show that public investment has a higher short-run growth impact, but in the long run the private investment-led growth is more important. In addition, while gross public investment crowds out private investment, infrastructural public investment has a long-run crowding in effect. A non-infrastructural public investment was also reported to have a short-run crowding out effect on private investment. The results suggest that the productivity of public and private investment in Zimbabwe can be improved by cutting back on non-infrastructural public investment to basic minimum level while stimulating the growth in infrastructural public investment.


Issue Date:
2017-2017-2017
Publication Type:
Journal Article
ISSN:
1804-1205
Language:
English
Published in:
Business and Economic Horizons (BEH), Volume 13, Issue 1
Page range:
60-76
JEL Codes:
E22; O47; P12




 Record created 2017-11-01, last modified 2017-11-01

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)