Title

Critical study of public and private investments in Pakistan

Degree

Master of Business Administration Executive

Faculty / School

Faculty of Business Administration (FBA)

Year of Award

Spring 2018

Project Type

MBA Executive Research Project

Access Type

Restricted Access

Keywords

Investments | Capitalists and financiers | Investors

Executive Summary

The role of investment is important for the determination of output and its growth of any economy. Investment is made by both government and private sectors of the economy. There is a debate in theoretical and empirical literature about the impact of public investment on private investment. Public investment influences private investment is discussed by theoretical and empirical literature. Moreover, literature shows that the relationship between government investment and private investment is still inconclusive. The objectives of this study are to analysis the relationship between government investment and private investment in the framework of financial liberalization, to identify key determinants of private investment and to rank the main obstacles to private investment for Pakistan. This study uses both primary and secondary data. Furthermore, it employs mixed research approach to analysis the problem. Interviews and focus group are conducted. ARDL co integration technique is used to estimate time series model for private investment. Descriptive statistics, Liker scale with one sample t-test and mean score are employed for analyzing survey based data with reference to private investments for Pakistan. Results show that public and private investments are complementary. Real income and interest rate are also found significant with positive and negative signs, respectively. These are consistent with the .study of Rashid (2005), Ahmed & Qayum (2009) and Ali at el (2013). Furthermore, financial liberalization is found insignificant in the determination of private investment for Pakistan. It is also found that the main obstacles of private investment are level of taxes towards business investment, problems of getting credit, level of interest rate, infrastructure, and public utilities. It is recommended that public investment should be increased to explore the potential of Pakistan economy as it is found complementary for private investment. Moreover, government should take necessary actions to remove the main obstacles to private investment for enhancing output growth. Financial liberalization reforms are found insignificant. Hence, resources of Pakistan economy should not be used in that direction.

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