An Econometric Study of the Determinants of Private Sector Investment

Filed in Economics Project Topic by on October 20, 2020

An Econometric Study of the Determinants of Private Sector Investment in Nigeria

ABSTRACT

The study examined the econometric study of the determinants of private sector investments in Nigeria for the period of 1970-2015.

The research adopted the econometric method. The study also adopted annual time series data covering a period of forty-six years.

The study aimed at determining the major variables that influence private investments in Nigeria, to know if these determinants have a long run relationship with private investment in Nigeria and to identify policy variables that will influence private investment in Nigeria

The findings from the research study showed that unit test result indicated that credit to the private sector was stationary at levels while other variables were not stationary at first difference,

the co-integration test result revealed that the variables were not co-integrated, infrastructural facilities and savings rate exerted a positive significant effect on private domestic investment in Nigeria.

INTRODUCTION

Following the slump in the oil prices and insecurity challenges that have plagued Nigeria, research interests in searching for alternative means of driving sustainable long term growth have been rekindled.

In the development economics literature, a plethora of factors have been identified and explored as the drivers of economic growth.

Investment has been identified as a key determinant of economic growth in any nation according to many macroeconomic literature and empirical evidences.

It has been revealed to be one of the sustainable factors of major long-term economic growth by many empirical researches. Investment is divided into foreign and domestic investment.

The foreign component is divided into Greenfield or foreign direct investment and portfolio investment. The domestic component is divided into public investment and private investment.

Domestic investment can be harnessed to drive growth especially in developing nations. This is because it increases employment opportunities, attracts foreign investment and increases the new technology in the country.

REFERENCES

Agu, O. C. (2015) Determinants of private investment in Nigeria. An econometric analysis .International Journal of Economics, Commerce and Management.Issue 4.

Agu, O.C. and Basil C.O.(2013) Credit Management and Bad Debt In Nigeria Commercial  Banks Implication For development. IOSR Journal of Humanities and Social Science (IOSR JHSS) Vol 12, Iss3.

Ahmad, K. and Mahmood, H. (2013). Macroeconomic Determinants of National Savings Revisited: A Small Open Economy of Pakistan. World Applied Sciences Journal, 21 (1): 49-57

Asante, Y. (2000). Determinants of Private Investment Behaviour, AERC ResearchPaper No. 100, Nairobi: AERC

Ayalew, H.A. (2013).Determinants of domestic saving in Ethiopia: An autoregressive distributed lag (ARDL) bounds testing approach. Journal of Economics and International Finance. 5(6): 248-257.

Bosworth, B.P. (1993). Saving and Investment in a Global Economy. Washington, D.C.  Brookings Institution.

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