Do Good Institutions Matter for Private Investment? Evidence from East Africa

Joseph Ndungu, Peter W Muriu

Abstract


This study sought to investigate the link between private investment decisions and various governance institutions. This link is empirically tested for a panel of 4 East Africa countries by estimating a random effect model for the period 1996-2015. While the literature has placed special emphasis on the role of corruption on private investments, we explore a wider range of institutional aspects. Estimations results show that government effectiveness, regulatory quality, control of corruption, and rule of law influence the level of private investments.

Keywords: Institutions; Investments; East Africa; Random Effect

JEL Classification: E02, E6, C33


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ISSN (Paper)2222-1700 ISSN (Online)2222-2855

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