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Public and Private Investment and The Growth Process in Developing Countries[Note 1. We are grateful to David Bevan, Jong‐wha Lee, Xavier ...]
Author(s) -
Khan Mohsin S.,
Kumar Manmohan S.
Publication year - 1997
Publication title -
oxford bulletin of economics and statistics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.131
H-Index - 73
eISSN - 1468-0084
pISSN - 0305-9049
DOI - 10.1111/1468-0084.00050
Subject(s) - economics , public capital , per capita , investment (military) , developing country , panel data , public investment , sample (material) , stock (firearms) , private capital , private investment in public equity , human capital , gross fixed capital formation , capital accumulation , monetary economics , population , macroeconomics , econometrics , economic growth , gross domestic product , foreign direct investment , initial public offering , private equity fund , law , chemistry , sociology , chromatography , political science , demography , politics , fiscal policy , engineering , mechanical engineering
This paper examines the relative contribution of public and private investment to per capita GDP growth in developing countries. It extends the basic neoclassical model of growth by separating investment into its public and private components, and estimates this model for a sample of 95 developing countries over the period 1970–90 using both cross‐sectional and panel data. Using data on relative supplies of public and private capital stock, rates of return to public and private investment are also computed. The results suggest that once other determinants of growth, such as human capital formation, population growth, and technical progress, are taken into account, public and private investment have different effects on growth, and that these effects are characterized by marked regional and inter‐temporal variations.