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Title:Examining private investment heterogeneity: Evidence from a dynamic panel PDF Logo
Authors:Luintel, Kul B.
Mavrotas, George
Issue Date:2005
Series/Report no.:WIDER Discussion Papers // World Institute for Development Economics (UNU-WIDER) 2005/11
Abstract:We investigate domestic private investment behaviour in a panel of 24 low-income and middle-income countries spanning a period of 1981-2000. The paper rigorously addresses (i) the cross-country heterogeneity in private investment behaviour, and (ii) endogeneity. Indicators of financial sector development and other standard macroeconomic determinants of private investment appear significant in explaining private investment behaviour in our sample; however, the estimated parameters and adjustment dynamics exhibit important cross-country differences. The empirical findings of the paper have important implications namely that first, cross-country heterogeneity needs to be addressed while modelling the private investment behaviour, and second, at the policy level, the country-specific approach appears potentially more effective than the one-size-fits-all approach for boosting private investment.
Subjects:domestic private investment
public investment
dynamic heterogeneity
Generalised Method of Moments
Document Type:Working Paper
Appears in Collections:WIDER Discussion Papers, United Nations University (UNU)

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