Private and Public Investment in Malaysia: A Panel Time-series Analysis
Public capital hypothesis explains that a positive relationship exists between private and public investment. This paper examines the validity of the hypothesis by using a panel time series analysis on four sectors of the Malaysian economy (agriculture, industry and trade, transportation and commun...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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EconJournals
2011-10-01
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| Series: | International Journal of Economics and Financial Issues |
| Online Access: | https://www.econjournals.com/index.php/ijefi/article/view/51 |
| _version_ | 1797911603824295936 |
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| author | Sallahuddin Hassan Zalila Othman Mohd Zaini Abd Karim |
| author_facet | Sallahuddin Hassan Zalila Othman Mohd Zaini Abd Karim |
| author_sort | Sallahuddin Hassan |
| collection | DOAJ |
| description |
Public capital hypothesis explains that a positive relationship exists between private and public investment. This paper examines the validity of the hypothesis by using a panel time series analysis on four sectors of the Malaysian economy (agriculture, industry and trade, transportation and communication, and construction). Panel co-integration analysis is used to prove the relationship between private domestic investment and public investment by using panel data for the period of 1976–2006. Two interaction variables, public investment and gross domestic product and investment and privatization policy were included as independent variables to take into account the influence of gross domestic product and privatization policy on the effect of public investment on private investment. Results of the study indicate that public investment has positive effect on private investment in all the three sectors except agricultural sector, suggesting that government expenditure encourage more private investment if focus is given towards productive expenditure.
Keywords: Public capital hypothesis; Panel time-series; Malaysia
JEL Classification: H50
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| first_indexed | 2024-04-10T11:43:10Z |
| format | Article |
| id | doaj.art-a3a1d322d8404e3d87ddaec1f4f67dcf |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-04-10T11:43:10Z |
| publishDate | 2011-10-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-a3a1d322d8404e3d87ddaec1f4f67dcf2023-02-15T16:17:27ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382011-10-0114Private and Public Investment in Malaysia: A Panel Time-series AnalysisSallahuddin Hassan0Zalila Othman1Mohd Zaini Abd Karim2Universiti Utara MalaysiaUniversiti Utara MalaysiaUniversiti Utara Malaysia Public capital hypothesis explains that a positive relationship exists between private and public investment. This paper examines the validity of the hypothesis by using a panel time series analysis on four sectors of the Malaysian economy (agriculture, industry and trade, transportation and communication, and construction). Panel co-integration analysis is used to prove the relationship between private domestic investment and public investment by using panel data for the period of 1976–2006. Two interaction variables, public investment and gross domestic product and investment and privatization policy were included as independent variables to take into account the influence of gross domestic product and privatization policy on the effect of public investment on private investment. Results of the study indicate that public investment has positive effect on private investment in all the three sectors except agricultural sector, suggesting that government expenditure encourage more private investment if focus is given towards productive expenditure. Keywords: Public capital hypothesis; Panel time-series; Malaysia JEL Classification: H50 https://www.econjournals.com/index.php/ijefi/article/view/51 |
| spellingShingle | Sallahuddin Hassan Zalila Othman Mohd Zaini Abd Karim Private and Public Investment in Malaysia: A Panel Time-series Analysis International Journal of Economics and Financial Issues |
| title | Private and Public Investment in Malaysia: A Panel Time-series Analysis |
| title_full | Private and Public Investment in Malaysia: A Panel Time-series Analysis |
| title_fullStr | Private and Public Investment in Malaysia: A Panel Time-series Analysis |
| title_full_unstemmed | Private and Public Investment in Malaysia: A Panel Time-series Analysis |
| title_short | Private and Public Investment in Malaysia: A Panel Time-series Analysis |
| title_sort | private and public investment in malaysia a panel time series analysis |
| url | https://www.econjournals.com/index.php/ijefi/article/view/51 |
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