Determinants of Private Investment in Ethiopia: An ARDL Approach

Habtamu Alebachew Legass; Solomon Adamu Derese; Anwar Adem Shikur

doi:doi:10.11648/j.ijfbr.20220803.12

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Determinants of Private Investment in Ethiopia: An ARDL Approach

Habtamu Alebachew Legass, Solomon Adamu Derese, Anwar Adem Shikur

Published in International Journal of Finance and Banking Research (Volume 8, Issue 3)

Received: 20 April 2022 Accepted: 7 June 2022 Published: 21 June 2022

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Abstract

One of the main engines of economic is private investment. As a result, the objective of this study was to investigate determinants of private investment in Ethiopia. The researcher employed a quantitative research approach with an explanatory research design to achieve the objective. study empirically tests whether Real GDP, inflation rate, real interest rate, foreign direct investment, tax rate, exchange rate, population growth rate, unemployment rate, international trade openness, education affect the growth of private investment in Ethiopia or not. The study focused based on 30 years of secondary data (i.e. from 1991 to 2020) on key variables. Multiple regressions using the ARDL model with appropriate software E-views 9 was applied. The ECM which indicates the speed of adjustment from short run towards long run. The main finding of the study indicated ln real GDP, population growth rate, rate interest, trade openness, and unemployment rate was statistically significant at 5% level of significance in the long run and short-run and also exchange rate was a positive and statistically significant effect on private investment in only short-run. Finally unemployment has adverse effect on private investment, the policy choice on the matter need a vigilant decision. Combined policy tools shall be used to achieve the great short run and long run targets.

Published in	International Journal of Finance and Banking Research (Volume 8, Issue 3)
DOI	10.11648/j.ijfbr.20220803.12
Page(s)	95-104
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Private Investment, ARDL, Ethiopia

References

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APA Style

Habtamu Alebachew Legass, Solomon Adamu Derese, Anwar Adem Shikur. (2022). Determinants of Private Investment in Ethiopia: An ARDL Approach. International Journal of Finance and Banking Research, 8(3), 95-104. https://doi.org/10.11648/j.ijfbr.20220803.12

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ACS Style

Habtamu Alebachew Legass; Solomon Adamu Derese; Anwar Adem Shikur. Determinants of Private Investment in Ethiopia: An ARDL Approach. Int. J. Finance Bank. Res. 2022, 8(3), 95-104. doi: 10.11648/j.ijfbr.20220803.12

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AMA Style

Habtamu Alebachew Legass, Solomon Adamu Derese, Anwar Adem Shikur. Determinants of Private Investment in Ethiopia: An ARDL Approach. Int J Finance Bank Res. 2022;8(3):95-104. doi: 10.11648/j.ijfbr.20220803.12

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@article{10.11648/j.ijfbr.20220803.12,
  author = {Habtamu Alebachew Legass and Solomon Adamu Derese and Anwar Adem Shikur},
  title = {Determinants of Private Investment in Ethiopia: An ARDL Approach},
  journal = {International Journal of Finance and Banking Research},
  volume = {8},
  number = {3},
  pages = {95-104},
  doi = {10.11648/j.ijfbr.20220803.12},
  url = {https://doi.org/10.11648/j.ijfbr.20220803.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijfbr.20220803.12},
  abstract = {One of the main engines of economic is private investment. As a result, the objective of this study was to investigate determinants of private investment in Ethiopia. The researcher employed a quantitative research approach with an explanatory research design to achieve the objective. study empirically tests whether Real GDP, inflation rate, real interest rate, foreign direct investment, tax rate, exchange rate, population growth rate, unemployment rate, international trade openness, education affect the growth of private investment in Ethiopia or not. The study focused based on 30 years of secondary data (i.e. from 1991 to 2020) on key variables. Multiple regressions using the ARDL model with appropriate software E-views 9 was applied. The ECM which indicates the speed of adjustment from short run towards long run. The main finding of the study indicated ln real GDP, population growth rate, rate interest, trade openness, and unemployment rate was statistically significant at 5% level of significance in the long run and short-run and also exchange rate was a positive and statistically significant effect on private investment in only short-run. Finally unemployment has adverse effect on private investment, the policy choice on the matter need a vigilant decision. Combined policy tools shall be used to achieve the great short run and long run targets.},
 year = {2022}
}

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TY  - JOUR
T1  - Determinants of Private Investment in Ethiopia: An ARDL Approach
AU  - Habtamu Alebachew Legass
AU  - Solomon Adamu Derese
AU  - Anwar Adem Shikur
Y1  - 2022/06/21
PY  - 2022
N1  - https://doi.org/10.11648/j.ijfbr.20220803.12
DO  - 10.11648/j.ijfbr.20220803.12
T2  - International Journal of Finance and Banking Research
JF  - International Journal of Finance and Banking Research
JO  - International Journal of Finance and Banking Research
SP  - 95
EP  - 104
PB  - Science Publishing Group
SN  - 2472-2278
UR  - https://doi.org/10.11648/j.ijfbr.20220803.12
AB  - One of the main engines of economic is private investment. As a result, the objective of this study was to investigate determinants of private investment in Ethiopia. The researcher employed a quantitative research approach with an explanatory research design to achieve the objective. study empirically tests whether Real GDP, inflation rate, real interest rate, foreign direct investment, tax rate, exchange rate, population growth rate, unemployment rate, international trade openness, education affect the growth of private investment in Ethiopia or not. The study focused based on 30 years of secondary data (i.e. from 1991 to 2020) on key variables. Multiple regressions using the ARDL model with appropriate software E-views 9 was applied. The ECM which indicates the speed of adjustment from short run towards long run. The main finding of the study indicated ln real GDP, population growth rate, rate interest, trade openness, and unemployment rate was statistically significant at 5% level of significance in the long run and short-run and also exchange rate was a positive and statistically significant effect on private investment in only short-run. Finally unemployment has adverse effect on private investment, the policy choice on the matter need a vigilant decision. Combined policy tools shall be used to achieve the great short run and long run targets.
VL  - 8
IS  - 3
ER  -

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Author Information

Habtamu Alebachew Legass

Department of Accounting and Finance, Dire Dawa University, Dire Dawa, Ethiopia
Solomon Adamu Derese

Department of Accounting and Finance, Dire Dawa University, Dire Dawa, Ethiopia
Anwar Adem Shikur

Department of Accounting and Finance, Dire Dawa University, Dire Dawa, Ethiopia

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Plain Text BibTeX RIS

APA Style

Habtamu Alebachew Legass, Solomon Adamu Derese, Anwar Adem Shikur. (2022). Determinants of Private Investment in Ethiopia: An ARDL Approach. International Journal of Finance and Banking Research, 8(3), 95-104. https://doi.org/10.11648/j.ijfbr.20220803.12

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ACS Style

Habtamu Alebachew Legass; Solomon Adamu Derese; Anwar Adem Shikur. Determinants of Private Investment in Ethiopia: An ARDL Approach. Int. J. Finance Bank. Res. 2022, 8(3), 95-104. doi: 10.11648/j.ijfbr.20220803.12

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AMA Style

Habtamu Alebachew Legass, Solomon Adamu Derese, Anwar Adem Shikur. Determinants of Private Investment in Ethiopia: An ARDL Approach. Int J Finance Bank Res. 2022;8(3):95-104. doi: 10.11648/j.ijfbr.20220803.12

Copy | Download

@article{10.11648/j.ijfbr.20220803.12,
  author = {Habtamu Alebachew Legass and Solomon Adamu Derese and Anwar Adem Shikur},
  title = {Determinants of Private Investment in Ethiopia: An ARDL Approach},
  journal = {International Journal of Finance and Banking Research},
  volume = {8},
  number = {3},
  pages = {95-104},
  doi = {10.11648/j.ijfbr.20220803.12},
  url = {https://doi.org/10.11648/j.ijfbr.20220803.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijfbr.20220803.12},
  abstract = {One of the main engines of economic is private investment. As a result, the objective of this study was to investigate determinants of private investment in Ethiopia. The researcher employed a quantitative research approach with an explanatory research design to achieve the objective. study empirically tests whether Real GDP, inflation rate, real interest rate, foreign direct investment, tax rate, exchange rate, population growth rate, unemployment rate, international trade openness, education affect the growth of private investment in Ethiopia or not. The study focused based on 30 years of secondary data (i.e. from 1991 to 2020) on key variables. Multiple regressions using the ARDL model with appropriate software E-views 9 was applied. The ECM which indicates the speed of adjustment from short run towards long run. The main finding of the study indicated ln real GDP, population growth rate, rate interest, trade openness, and unemployment rate was statistically significant at 5% level of significance in the long run and short-run and also exchange rate was a positive and statistically significant effect on private investment in only short-run. Finally unemployment has adverse effect on private investment, the policy choice on the matter need a vigilant decision. Combined policy tools shall be used to achieve the great short run and long run targets.},
 year = {2022}
}

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TY  - JOUR
T1  - Determinants of Private Investment in Ethiopia: An ARDL Approach
AU  - Habtamu Alebachew Legass
AU  - Solomon Adamu Derese
AU  - Anwar Adem Shikur
Y1  - 2022/06/21
PY  - 2022
N1  - https://doi.org/10.11648/j.ijfbr.20220803.12
DO  - 10.11648/j.ijfbr.20220803.12
T2  - International Journal of Finance and Banking Research
JF  - International Journal of Finance and Banking Research
JO  - International Journal of Finance and Banking Research
SP  - 95
EP  - 104
PB  - Science Publishing Group
SN  - 2472-2278
UR  - https://doi.org/10.11648/j.ijfbr.20220803.12
AB  - One of the main engines of economic is private investment. As a result, the objective of this study was to investigate determinants of private investment in Ethiopia. The researcher employed a quantitative research approach with an explanatory research design to achieve the objective. study empirically tests whether Real GDP, inflation rate, real interest rate, foreign direct investment, tax rate, exchange rate, population growth rate, unemployment rate, international trade openness, education affect the growth of private investment in Ethiopia or not. The study focused based on 30 years of secondary data (i.e. from 1991 to 2020) on key variables. Multiple regressions using the ARDL model with appropriate software E-views 9 was applied. The ECM which indicates the speed of adjustment from short run towards long run. The main finding of the study indicated ln real GDP, population growth rate, rate interest, trade openness, and unemployment rate was statistically significant at 5% level of significance in the long run and short-run and also exchange rate was a positive and statistically significant effect on private investment in only short-run. Finally unemployment has adverse effect on private investment, the policy choice on the matter need a vigilant decision. Combined policy tools shall be used to achieve the great short run and long run targets.
VL  - 8
IS  - 3
ER  -

Copy | Download