Ascertaining the Determinants of Private Investment in Ethiopia (1980-2017): Evidence from ARDL Approach

Abstract

The study aimed to ascertain the major determinants of private investment in the country over the period 1980-2017. The ARDL approach was adopted and it revealed that private investment, real gross domestic product, public investment, real effective exchange rate, inflation rate and credit to private sector are co-integrated.Real GDP had direct effect on private investment in the long-run and short-run; while public investment had negative impact. In the short-run, credit to private sector had positive effect on private investment. The overall implication is that real GDP and public investment are the main determinants of private investment in the country.

Keywords: ARDL, Ethiopia, Private investment

DOI: 10.7176/RJFA/11-11-01

Publication date:June 30th 2020