Impact of Public Spending on Private Investment in Malaysia : Crowding-In or Crowding-Out Effect

Jou Sie, Sim and Jerome, Kueh and Muhammad Asraf, Abdullah and Abang Azlan, Mohamad (2021) Impact of Public Spending on Private Investment in Malaysia : Crowding-In or Crowding-Out Effect. Global Business and Management Research: An International Journal, 13 (2). pp. 28-42. ISSN 1947-5667

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Abstract

This study intends to explore the crowding effect of disaggregated public expenditure on private investment in Malaysia from 1980 to 2016 via Vector Error Correction model. Empirical findings show that public spending has an enormous impact on long-term but marginal effect on short-term private investment. Specifically, private investment is significantly crowd-in education and defense of government expenditures while significantly crowd-out health and transportation expenditure in the long term. Nevertheless, there is insufficient evidence on short-run causality between public spending on private investment.

Item Type: Article
Uncontrolled Keywords: Public spending, private investment, crowding-in, crowding-out.
Subjects: H Social Sciences > HB Economic Theory
Divisions: Academic Faculties, Institutes and Centres > Faculty of Economics and Business
Depositing User: Swee Hui
Date Deposited: 08 Jun 2021 07:07
Last Modified: 08 Jun 2021 07:07
URI: http://ir.unimas.my/id/eprint/35423

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