DETERMINANTS OF PRIVATE INVESTMENT IN SUB-SAHARAN AFRICA: THE ROLE OF INSTITUTIONS
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Date
2020-09-04
Authors
MAHLOANE, TSEPO BENJAMIN
Journal Title
Journal ISSN
Volume Title
Publisher
University Of Bostwana
Abstract
This study pursued an investigation of the relationship between the quality of institutions and
private investment in Sub-Saharan Africa (SSA). The literature on determinants of economic
growth establishes the importance of investment in the growth of an economy. SSA countries have
been experiencing deficiency in private investment growth for several decades with consequences
on the growth of these countries. This study contributes to the debate on policies to promote private
investment in the region. The study focused on the influence of administrative quality, public
accountability and political stability. Dynamic panel econometric methods were applied to data
from 25 SSA countries for the period 1990-2016. The empirical results of the Arellano-Bond first step
generalized methods of moments support the notion that improvement in public accountability and political
stable environment is likely to improve private investment in SSA. One way that this study can be extended
is to investigate causality between institutional quality and private investment. This could potentially
provide more insight on the interaction between the two.