Chhibber / Dailami / Shafik Reviving Private Investment in Developing Countries

Empirical Studies and Policy Lessons
1. Auflage 2013
ISBN: 978-1-4832-9134-5
Verlag: Elsevier Science & Techn.
Format: PDF
Kopierschutz: 1 - PDF Watermark

E-Book, Englisch, Band Volume 208, 256 Seiten, Web PDF

Reihe: Contributions to Economic Analysis

The aim of the research described in this volume is to examine the behavior of private domestic investment in a sample of seven developing economies: Chile, Colombia, Egypt, Indonesia, Morocco, Turkey, and Zimbabwe. The studies represent a first step toward understanding the investment process in developing countries and the scope for government policy to affect private capital formation. Such issues will become increasingly important in the future as more developing countries try to encourage private investment.Four key issues emerge in the analysis of the determinants of private investment and its role in adjustment programs in developing countries. The first is the impact of changes in the exchange rate; the second major concern is the existence of crowding out of private activity as a result of government borrowing in domestic financial markets through interest rates or quantity rationing. A third and related issue is whether government spending, particularly that on investment, 'crowds in' or 'crowds out' private capital formation. Fourth, the effects of uncertainty are important in determining the response of private agents to changes in the incentive structure.

Autoren/Hrsg.

Chhibber, A.

Dailami, M.

Shafik, N.

Inhaltsverzeichnis

1;Front Cover;1
2;Reviving Private Investment in Developing Countries;4
3;Copyright Page;5
4;Table of Contents;10
5;INTRODUCTION TO THE SERIES;6
6;PREFACE;8
7;LIST OF CONTRIBUTORS;11
8;CHAPTER 1. REVIVING PRIVATE INVESTMENT IN DEVELOPING COUNTRIES: MAJOR THEMES;12
8.1;Introduction;12
8.2;Stabilization, Adjustment, and Private Investment;14
8.3;Exchange Rate Policy and Private Investment;16
8.4;Financial Crowding-Out, Tax Policy, and the Cost of Capital;18
8.5;Uncertainty and Credibility;20
8.6;The Composition of Government Expenditure and Private Investment;21
8.7;Concluding Remarks;24
9;CHAPTER 2. HOW PRIVATE INVESTMENT REACTS TO CHANGING MACROECONOMIC CONDITIONS: THE CASE OF CHILE IN THE 1980s;30
9.1;Private Investment and Macroeconomic Developments in Chile;31
9.2;A Model of Private Investment;33
9.3;Empirical Analysis;38
9.4;A Kaiman Filter Test: Identifying Structural Shifts in Investment;42
9.5;Policy Simulations;45
9.6;Conclusion;50
9.7;Acknowledgment;51
9.8;Appendix: Definitions and Measurement;51
9.9;References;52
10;CHAPTER 3. GOVERNMENT POLICY AND PRIVATE INVESTMENT RECOVERY IN COLOMBIA;54
10.1;Introduction;54
10.2;Aggregate Demand and Investment;56
10.3;Financial Policy and Business Investment;58
10.4;Structure of Corporate Finance;59
10.5;Directed Credit and Business Investment;64
10.6;Tax Policy and the Corporate Cost of Capital;69
10.7;Conclusion and Policy Suggestions;73
10.8;Acknowledgment;76
10.9;Appendix: Derivation of the Cost of Capital and Determination of the Corporate Leverage Ratio;76
10.10;References;79
11;CHAPTER 4. PRIVATE INVESTMENT AND PUBLIC POLICY: THE EGYPTIAN CASE;80
11.1;Introduction;80
11.2;Microeconomic Foundations for a Developing Economy: A Brief Summary of Survey Results;81
11.3;The Firm's Optimization Problem;84
11.4;Investment Dynamics: An Error Correction Approach;85
11.5;Empirical Evidence;86
11.6;Methodology;92
11.7;Engle and Granger Two-Step Estimator;95
11.8;Unrestricted Dynamic Estimation;100
11.9;An Evaluation of the Results;102
11.10;Conclusions;105
11.11;Acknowledgment;106
11.12;References;107
12;CHAPTER 5. DOES DEVALUATION HURT PRIVATE INVESTMENT? THE INDONESIAN CASE;110
12.1;Introduction;110
12.2;Trends in Investment and Related Macroeconomic Variables;112
12.3;Devaluation and Investment: The Model;115
12.4;Empirical Estimation for Indonesia;120
12.5;The Macroeconomic Model;124
12.6;Model Simulation of the Effect on Private Investment of Slower Devaluation;127
12.7;Conclusion;130
12.8;Acknowledgment;130
12.9;References;133
13;CHAPTER 6. PRIVATE INVESTMENT UNDER MACROECONOMIC ADJUSTMENT IN MOROCCO;136
13.1;Introduction;136
13.2;Private and Public Investment in Morocco: Measurement Problems and Behavioral Pattern;137
13.3;The Behavior of Private Investment, 1970-1988;141
13.4;Conclusions and Policy Implications;154
13.5;Appendix A: A Methodological Note on the Private Investment Series;158
13.6;Appendix B: The Real User Cost of Capital;160
13.7;Appendix C: Morocco Data Series (1970-1988);163
13.8;References;167
14;CHAPTER 7. PUBLIC POLICY AND PRIVATE INVESTMENT IN TURKEY;170
14.1;Introduction;170
14.2;Investment Trends;172
14.3;Determinants of Private Fixed Investment: Model Specification;174
14.4;Estimation Results for the Investment Model;178
14.5;An Empirical Analysis of Private Investment in Turkey 1980-86;182
14.6;Conclusions;185
14.7;Acknowledgment;186
14.8;References;187
15;CHAPTER 8. PRIVATE INVESTMENT, GOVERNMENT POLICY AND FOREIGNCAPITAL: A STUDY OF THE ZIMBABWEAN EXPERIENCE;190
15.1;Introduction;190
15.2;Econometric Results on the Influence of Macroeconomic Factors;191
15.3;The Structure of Corporate Finance;196
15.4;Rates of Return and The Cost of Capital;202
15.5;The Regulatory Framework for Corporate Investment;212
15.6;Acknowledgment;218
15.7;Appendix 1: Model Description for Corporate Financing Requirements;218
15.8;Appendix 2: Derivation of the Cost of Capital;219
15.9;References;221
16;CHAPTER 9. ADJUSTMENT, INVESTMENT AND THE REAL EXCHANGE RATE IN DEVELOPING COUNTRIES;224
16.1;Introduction;224
16.2;The Controversy;228
16.3;External Adjustment and the Real Exchange Rate;231
16.4;Investment, the Real Exchange Rate, and the Debt Overhang;235
16.5;Efficiency of Investment and Cost of Investment;236
16.6;Investment and the Debt Overhang;241
16.7;Looking Ahead;244
16.8;Appendix;246
16.9;The Investment Equations;247
16.10;References;249
17;SUBJECT INDEX;252