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1 – 10 of over 60000Mohammad Zebib and Michael Muoghalu
This paper suggests that private investment expenditure is determined by the changes in domestic credit and net capital inflow to the private sector. Any increase in government…
Abstract
This paper suggests that private investment expenditure is determined by the changes in domestic credit and net capital inflow to the private sector. Any increase in government investment increases private investment through the increase in the changes in private output (contributory effect) and decreases private investment through the decrease in the availability of the banking system's domestic credit and net inflow of capital to the private sector.
Opeoluwa Adeniyi Adeosun, Monica Adele Orisadare, Fisayo Fagbemi and Sikiru Adetona Adedokun
This study explores the asymmetric linkage between public investment and private sector performance in Nigeria. This is due to the presence of nonlinear structures in the behavior…
Abstract
Purpose
This study explores the asymmetric linkage between public investment and private sector performance in Nigeria. This is due to the presence of nonlinear structures in the behavior of domestic investment series with evidences of structural time breaks, which fall within periods of global financial crises and oil shocks.
Design/methodology/approach
Main data on gross capital formation, gross fixed capital formation, domestic credit to private sector, domestic credit to private sector by banks are used for the study span through 1986 to 2017. Evidence of asymmetry spurs the study to adopt the nonlinear autoregressive distributed lag, asymmetric generalized impulse response and variance decomposition and asymmetric granger causality techniques.
Findings
It is shown that positive (negative) investment shocks exhibit a non-negligible and substantial stimulating (dampening) influence on the long-run performance of private sector in the economy. However, there is evidence that negative investment shocks portend a positive influence on the performance of private sector in the short run. This suggests that negative shocks to investment may not dampen the effectiveness of private sector in the short run, and this thus brings to bear the debate on the tenability of public investment as a potent counter cyclical tool in enhancing short-run private sector growth. The nonlinear granger causality also shows a unidirectional nonlinear causality from public investment to private sector performance. However, there is no evidence of bidirectional nonlinear causality.
Originality/value
This study provides quantitative evidence that Nigeria still depends exclusively on public investment, and as an oil-based rentier economy its economic diversification drive still remains bleak.
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Shijing Liu, Hongyu Jin, Chunlu Liu, Benzheng Xie and Anthony Mills
Targeting public–private partnership (PPP) rental retirement villages, the purpose of this paper is to bring forward the solution of insufficient research in a non-competitive…
Abstract
Purpose
Targeting public–private partnership (PPP) rental retirement villages, the purpose of this paper is to bring forward the solution of insufficient research in a non-competitive guarantee (a restrictive agreement) towards the compensation and guarantee costs in consideration of benefit redistribution if the governments are unable to keep the promise on guarantee provision.
Design/methodology/approach
Real option principles are applied to assess the public–private investment proportions and the expected return rates of the private sector in a non-competitive guarantee and analyse their effects on the public–private benefit and risk allocations as well as the success of the project. Instead of granting direct capital support, this research accomplishes the compensation of non-competition guarantee by adjusting the project benefit distribution ratios between the government and the private sector to achieve the option value of the guarantee. An empirical example with alternative scales, which is developed from an existing rental village in Geelong, is used to numerically verify the research process.
Findings
The results illustrate that the option value of the non-competition guarantee plays an important role in supporting the implementation of the PPP rental retirement village projects. The option value of the non-competition guarantee has a close relationship with the guarantee level and the government guarantee cost, which is positively correlated with the guarantee level and negatively correlated with the government guarantee cost. To reduce the government guarantee cost, the government should carefully determine the public–private investment proportion, appropriately control the return rate of the private sector and approve the construction of the new project after the investment recovery of the private sector.
Research limitations/implications
This research mainly focusses on the economic loss of the government due to the guarantee responsibility. Further research could be conducted to determine the guarantee level more precisely and take the social cost of the government guarantees into consideration.
Originality/value
This research is the first attempt to investigate the government compensation and costs of non-competition guarantee for PPP rental retirement village projects and will enhance the understanding of the nature of PPP applications. The evaluation process and the implementation of the compensation through the adjustment of benefit distribution provides a comprehensive method to analyse the non-competition guarantee of PPP projects and help the parties negotiate in good faith to agree on a method of redress.
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There is a growing support for the view that the private sector is at least as efficient as the public sector in managing investment risks of large projects. Governments forget…
Abstract
There is a growing support for the view that the private sector is at least as efficient as the public sector in managing investment risks of large projects. Governments forget that it is the taxpayer who bears all the risks in a public finance scenario of investments. So, it seems unfounded that governments should neglect the cost of investment risk in obtaining finance as the taxpayer might be seen as a shareholder in (public) investments, which by definition are risky. It is this taxpayer-is-shareholder perspective that will be criticized in this paper. This taxpayer approach neglects the variety of funding and financing positions that might be taken by the various actors in investment projects. The paper concludes that some prudence is recommended in supporting private finance initiatives
The cornerstone of the government’s adjustment program is to increase the efficiency of private investment and activity by deregulating the economy and promoting competition. The…
Abstract
The cornerstone of the government’s adjustment program is to increase the efficiency of private investment and activity by deregulating the economy and promoting competition. The counterpart of this fundamental strategy is the need to increase the effectiveness of the public sector which in Pakistan had become overextended. To this end, public sector resources and management capacity are being redirected and concentrated in those areas in which public sector intervention is required because of market failures or social objectives. The results obtained strongly suggest that the government’s program is supported by strong empirical evidence. There is no question that private investment has been discouraged by the public capital formation in manufacturing. Not only has government investment in this area stifled the private sector, but also it has diverted funds away from productive activities that would most likely have encouraged a follow‐on expansion in private investment.
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Public and private sector managers make investment decisions under uncertainty. Economic efficiency requires that managers who wish to maximize expected utility use NPV. A field…
Abstract
Public and private sector managers make investment decisions under uncertainty. Economic efficiency requires that managers who wish to maximize expected utility use NPV. A field test reports that a lower proportion of public managers (20%) utilize NPV than private managers (46%). This difference is significant at p = .01 in both logistic regression and chi-square tests for three competing, but not mutually exclusive, reasons. First, taxpayers are a primary source of capital. Taxation decisions are primarily political events and inefficiency is less likely to be disciplined by capital withdrawal. Second, it is more difficult to estimate expected benefits and costs. Third, investment decisions are often the result of political, not economic, processes. The objective may not be maximization of NPV.
The purpose of this paper is to examine the crowding-in or crowding-out relationship between public and private investment in India.
Abstract
Purpose
The purpose of this paper is to examine the crowding-in or crowding-out relationship between public and private investment in India.
Design/methodology/approach
The autoregressive distributed lag (ARDL) bounds testing approach is used to estimate the long run relationship between public and private investment using annual data from 1971-1972 to 2009-2010.
Findings
Based on the empirical findings, it is observed that aggregate public investment has a positive effect on private investment both in the long run and the short run. In contrast to the findings of previous studies, no significant impact of public infrastructure investment on private investments is found in the long run, while non-infrastructure investment has a positive impact on private investment in the short run. Among the various categories of infrastructure sector, a positive and significant impact in the case of electricity, gas and water supply is observed. Similarly, the result indicates that public investment in machinery and equipment and construction have substantially influenced the private sector machinery and equipment in the long run and the short run. In the case of the role of macroeconomic uncertainty, the results find a negative and significant impact on private investment and the impact is higher in the short run than in the long run.
Originality/value
The present study extends the literature in three important ways: First, the study attempts to capture heterogeneity of public investment as well as disaggregate effects of two different categories of public infrastructure on private investment. The extent to which two different types of public assets impact the private investment in machinery and equipment investment is also examined. Second, ARDL model is used to examine the long-run relationship between public and private investment. Third, the study incorporates macroeconomic uncertainty into the empirical analysis to examine the role of macroeconomic volatility in determining private investment decision.
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Fernando Vinícius da Rocha and Maria Sylvia Macchione Saes
The purpose of this paper is to discuss the impacts of the investment programs created by the Brazilian federal government on private investment in transportation infrastructure…
Abstract
Purpose
The purpose of this paper is to discuss the impacts of the investment programs created by the Brazilian federal government on private investment in transportation infrastructure (crowding-in effect).
Design/methodology/approach
The study used two quantitative techniques of data analysis: cluster analysis and panel data analysis.
Findings
The results show that the investment programs created by the Brazilian federal government were successful in attracting private agents to invest in transportation infrastructure in the country. This effect is observed even in the cases of programs focused on public investments.
Research limitations/implications
Advancing the research area that seeks to assess the impact of public policies is the main practical and social implications of the papers. As a research limitation we can highlight that need for a comparison to other country investment’s public policies.
Practical implications
Performance of public policies.
Social implications
Economic development.
Originality/Value
The paper discusses the effects of the Brazilian Federal Government programs for infrastructure investment in the private investment in the country (investment in transportation infrastructure). The issue is relevant for policies makers.
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Robert Osei-Kyei and Albert P.C. Chan
The increasing demand for public infrastructure has caused a rise in the global adoption of the public–private partnership (PPP) concept. However, over the past years, most of the…
Abstract
Purpose
The increasing demand for public infrastructure has caused a rise in the global adoption of the public–private partnership (PPP) concept. However, over the past years, most of the developing countries have failed to attract more private investments as realised in the developed countries. This paper aims to investigate the critical factors that attract private investments in the PPP markets of developing countries.
Design/methodology/approach
An empirical questionnaire survey was conducted with targeted international PPP experts from the academic and industrial sectors. The inter-rater agreement analysis, mean score ranking and Mann–Whitney U test were used to analyse the survey responses.
Findings
Results indicate that the three most critical factors are political support and acceptability for PPPs, government positive attitude towards private sector investments and political stability. On the other hand, factors including government guarantees, competent PPP unit and tax rebate on imported equipment are of low importance. The Mann–Whitney U test reveals that experts from the academic and industrial sectors view the importance of three factors differently: adequate public sector experience in PPP, government providing guarantees and government providing tax rebate on imported equipment.
Originality/value
The research outputs contribute to the existing but limited knowledge on PPP practices in developing countries by providing empirical evidence and cross-cultural perceptions on the conditions that are critical to the expansion of PPP markets in developing countries. It is therefore expected that governments and policymakers seeking to adopt the PPP concept would take into consideration the results and implications to enhance PPP growth.
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This paper seeks to identify policy and regulatory bottlenecks that need to be overcome in order to stimulate private sector investment in backbone networks in selected African…
Abstract
Purpose
This paper seeks to identify policy and regulatory bottlenecks that need to be overcome in order to stimulate private sector investment in backbone networks in selected African countries (Côte d'Ivoire, Ethiopia, Kenya, South Africa and Uganda).
Design/methodology/approach
It does so by exploring policy and regulatory frameworks and market structures that influence investment decisions on backbone infrastructure roll‐out; it investigates models and strategies adopted by the public sector to finance national backbone infrastructure; and it provides recommendations on how to stimulate private investment in backbone roll‐out by creating an enabling policy and regulatory environment.
Findings
Research findings show that the telecommunications sector in the selected African countries has witnessed the return of state‐led investment in the roll‐out of fibre backbones. The rationale for state‐led intervention has often been cited as market failure regarding investment in broadband backbone roll‐out. However, many of the policy and regulatory barriers to market entry remain, including protectionist legislation, which has limited private sector participation in investing in backbone.
Practical implications
The reality is that African governments are maintaining control over national backbones and, in some markets where the telecommunications infrastructure sector has been liberalised, the state‐owned operators may enter into direct competition with the private sector or may delay delivery by the private sector.
Originality/value
The value of the paper is that it provides evidence on how to improve the roll‐out and extension of national broadband backbone networks through the development of a policy and regulatory framework which facilitates private sector investment in this sector. The paper also makes recommendations to governments for the facilitation of private investment in backbone networks through the development of an enabling policy and regulatory environment.
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