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 communi...
Main Authors: | , , |
---|---|
Format: | Article |
Language: | English |
Published: |
EconJournals
2011-01-01
|
Series: | International Journal of Economics and Financial Issues |
Subjects: | |
Online Access: | http://www.econjournals.com/index.php/ijefi/article/view/51/pdf |
_version_ | 1797918715179696128 |
---|---|
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. |
first_indexed | 2024-04-10T13:34:53Z |
format | Article |
id | doaj.art-ccf21a5bb55e454fa7ef9a33daa069bc |
institution | Directory Open Access Journal |
issn | 2146-4138 |
language | English |
last_indexed | 2024-04-10T13:34:53Z |
publishDate | 2011-01-01 |
publisher | EconJournals |
record_format | Article |
series | International Journal of Economics and Financial Issues |
spelling | doaj.art-ccf21a5bb55e454fa7ef9a33daa069bc2023-02-15T16:11:27ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382011-01-0114199210Private and Public Investment in Malaysia: A Panel Time-series AnalysisSallahuddin HassanZalila OthmanMohd Zaini Abd KarimPublic 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.http://www.econjournals.com/index.php/ijefi/article/view/51/pdfPublic capital hypothesisPanel time-seriesMalaysia |
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 Public capital hypothesis Panel time-series Malaysia |
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 |
topic | Public capital hypothesis Panel time-series Malaysia |
url | http://www.econjournals.com/index.php/ijefi/article/view/51/pdf |
work_keys_str_mv | AT sallahuddinhassan privateandpublicinvestmentinmalaysiaapaneltimeseriesanalysis AT zalilaothman privateandpublicinvestmentinmalaysiaapaneltimeseriesanalysis AT mohdzainiabdkarim privateandpublicinvestmentinmalaysiaapaneltimeseriesanalysis |