48-vol. 24, no. 2, july-december, 2009
Articles

The impact of public investment on private investment in Mexico, 1980-2007

pdf

PDF (Español)
  • Felipe de Jesús Fonseca Hernández
Felipe de Jesús Fonseca Hernández
Universidad de Guadalajara
DOI: https://doi.org/10.24201/ee.v24i2.125

Published 2009-07-01

Keywords

  • public investment,
  • private investment,
  • crowding in effect,
  • crowding out effect

How to Cite

Fonseca Hernández, F. de J. (2009). The impact of public investment on private investment in Mexico, 1980-2007. Estudios Económicos De El Colegio De México, 24(2), 187–224. https://doi.org/10.24201/ee.v24i2.125

Metrics

Abstract

Even though there is a growing consensus in the existing literature on the positive effect that public investment generates for economic growth, its impact on private investment is by no means a settled issue. This study seeks to determine empirically the relation between these two variables for the Mexican economy during the 1980-2007 period. The results of dynamic estimations yield a partial crowding out of public investment in the short run, while, in the long run, it exerts a weak and marginal complementarity effect on private investment.

pdf

PDF (Español)

Downloads

Download data is not yet available.

References

  1. Acosta, Pablo y A. Loza (2005). Short and Long Run Determinants of Private Investment in Argentina, Journal of Applied Economics, 8, 389-406.
  2. Agénor, Richard y P. Montiel (2002). La macroeconomía del desarrollo, FCE, México.
  3. Agénor, Richard, M. Nabli y T. Yousef (2005). Public Infrastructure and Private Investment in the Middle East and North Africa, World Bank Policy Research Working Paper, núm. 3661.
  4. Alfonso, António y M. Aubyn (2006). Macroeconomics Rates of Return of Public and Private Investment: Crowding In and Crowding Out Effect, The World Bank Policy Research Papers, núm. 1761.
  5. Aschauer, David A. y U. Lächler (1998). Public Investment and Economic Growth in Mexico, Policy Research Working Paper, núm. 1964, The World Bank.
  6. Aschauer, David A. (1990). Public Investment and Private Sector Growth, Economic Policy Institute, Working Paper núm. 301.
  7. Aschauer, David A. (1989). Does Public Capital Crowd Out Private Capital?, Journal of Monetary Economics, 24, 171-188.
  8. Atukeren, Erdal (2004). Interactions Between Public and Private Investment: Evidence from Developing Countries, Center of Economic Modelling, Working Paper núm. 1782.
  9. Barro, Robert J. (1990). Governent Spending in a Simple Model of Endogenous Growth, Journal of Political Economy, 98, S103-S125.
  10. Barro, Robert J. (1974). Are Government Bonds Net Wealth? Journal of Political Economy, 82, 1095-1117.
  11. Branson, William (1986). Macroeconomía. Teorías y políticas, FCE, México.
  12. Calderón, César y L. Servén (2004). The Effects of Infrastructure Development on Growth and Income Distribution, Banco Central de Chile, documento de trabajo, núm. 270.
  13. Carlson, Keith y R. Spencer (1975). Crowding Out and its Critics, Review Federal Reserve Bank of St. Louis, 57, 1-17.
  14. Castillo, Ramón y J. Herrera (2005). El efecto del gasto público sobre el gasto privado en México, Estudios Económicos, 20, 173-196.
  15. Chavarín, Rubén (2001). El costo del desempleo medido en producto. Una revisión empírica de la ley de Okun para México, El Trimestre Económico, 270, 209-231.
  16. Demetriades, Panicos y T. Mamuneas (2000). Intertemporal Output and Emplyoment Effects of Public Infrastructure Capital: Evidence from 12 OECD Economies, The Economic Journal, 110, 687-712.
  17. Easterly, William y S. Rebelo (1993). Fiscal Policy and Economic Growth: An Empirical Investigation, Journal of Monetary Economics, 32, 417-458.
  18. Engle, Robert F. y C. W. Granger (1987). Cointegration and Error Correction: Representation, Estimation, and Testing, Econometrica, 55, 251-276
  19. Enders, Walter (2004). Applied Econometric Time Series, Wiley, EU.
  20. Eremburg, Sharon (1993). The Relationship Between Public and Private Investment, Economic Policy Institute, Working Paper, núm. 282.
  21. Everhart, Stephen y M. Sumlinsky (2001). Trends in Private Investment in Developing Countries and the Impact on Private Investment of Corruption and the Quality of Public Investment, The World Bank.
  22. Galindo, Luis M. y H. Catalán (2003). La tasa de interés real en México: un análisis de raíces unitarias con cambio estructural, Momento Económico, 126, 15-22.
  23. Gobierno de México (2007). Programa Nacional de Infraestructura 2007-2012, Presidencia de la República, México.
  24. Gonzalo, Jesús y Tae-Hwy Lee (1998). Pitfalls is Testing for Long Run Relationships, Journal of Econometrics, 86, 129-154.
  25. Granger, C. W. J. y P. Newbold (1974). Spurious Regression in Econometrics, Journal of Econometrics, 2, 111-120.
  26. Harris, Richard y R. Sollis (2003). Applied Time Series Modelling and Forecasting, Wiley.
  27. Hendry, D. (1987). Econometric Methodology: A Personal Perspective, en T. Bewley (Comp.), Advances in Econometrics, vol. 2, cap. 10, Cambridge University Press.
  28. Herrera, Jorge (2003). Dinámica de la inversión privada en México, Gaceta de Economía, 16, 111-141.
  29. Hjerppe, Reino, J. Kiander y M. Virén (2006). Are Government Expenditures Productive? Measuring the Effect on Private Sector Production, Government Institute for Economic Research, Working Paper, núm. 571, Helsinki.
  30. INEGI (1994). Sistema de cuentas nacionales de México. Oferta y utilización trimestral 1980-1993, México.
  31. Johansen, Søren y K. Juselius (1990). Maximum Likelihood Estimation and Inference on Cointegration - with Applications to the Demand of Money, Oxford Bulletin of Economics and Statistics, 52, 169-210.
  32. Johansen, Søren (1988). Statistical Analysis of Cointegration Vectors, Journal of Economic Dynamics and Control, 12, 231-254.
  33. Johnston, Jack y J. DiNardo (1997). Econometric Methods, McGraw Hill, EU. Karadag, Metin, E. Deliktas y O. A. ¨Onder (2001).¨ The Effects of Public Infrastructure on Private Sector Performance in the Turkish Regional Manufacturing Industries, Ege University, Working Paper Series, núm 124, Turquía.
  34. Kustepeli, Yesim (2005). Effectiveness of Fiscal Spending: Crowding out and/or Crowding in? Yönetim Ve Ekonomi, 12, 185-192
  35. Leybourne, Stephen y P. Newbold (2003). Spurious Rejections by Cointegration Test Induced by Structural Breaks, Applied Economics, 35, 1117-1121.
  36. Lloyd, Michael (1999). Public and Private Investment in the European Union, Banco Central Europeo, documento de trabajo, núm. 2897, Alemania.
  37. MacKinnon, James, A. A. Haug y L. Michelis (1999). Numerical Distribution Functions of Likelihood Ratio Tests For Cointegration, Journal of Applied Econometrics, 14, 563-577.
  38. MacKinnon, James (1991). Critical Values for Cointegration Test, en R. Engle y C. Granger (Comps.), Long Run Economic Relationships. Readings in Cointegration, Oxford University Press.
  39. Maddala, G.S. y In-Moo Kim (1998). Unit Roots, Cointegration and Structural Change, Cambridge Universtity Press.
  40. Martínez, Diego (2004). Linking Public Investment to Private Investment. The Case of Spanish Regions, Centro de Estudios Andaluces, documento de trabajo, núm. 291, España.
  41. Máttar, Jorge (2000). Inversión y crecimiento durante las reformas económicas, en F. Clavijo (Comp.), Reformas económicas en México 1982-1999, FCE, México, 156-256.
  42. Mitra, Pritha (2006). Has Government Investment Crowded Out Private Investment in India? The World Bank, Working Paper, núm. 3289, EU.
  43. Moreno-Brid, Juan (1999). México: reforma macroeconómica y formación de capital fijo en la manufactura, serie de reformas económicas, 47, CEPAL, Santiago de Chile.
  44. Morrison, Catherine J. y A. E. Schwartz (1996). State Infrastructure and Productive Performance, American Economic Review, 86, 1095-1111.
  45. Munnell, Alicia H. (1992). Policy Watch: Infrastructure Investment and Economic Growth, The Journal of Economic Perspectives, 6, 189-198.
  46. Musalem, Alberto (1989). Private Investment in Mexico. An empirical Analysis, The World Bank, Working Paper Series, núm. 183.
  47. Noriega, Antonio y D. Ventosa (2006). Spurious Cointegration: The Engle-Granger Test in the Presence of Structural Breaks, Banco de México, documento de trabajo, núm. 12.
  48. Noriega, Antonio y M. Fontela (2007). La infraestructura y el crecimiento económico en México, El Trimestre Económico, 296, 885-900.
  49. Perron, Pierre. (1997). Further Evidence on Breaking Trend Functions in Macroeconomic Variables, Journal of Econometrics, 80, 355-385.
  50. Perron, Pierre. (1989). The Great Crash, the Oil Price Shock, and Unit Root Hyphotesis, Econometrica, 57, 1361-1401.
  51. Quantitative Micro Software (2004). EViews 5.0, http://www.eviews.com/.
  52. Ramírez, Miguel D. y N. Nader (1997). Public and Private Investment and Economic Growth in Mexico, Comtemporary Economic Policy, 15, 65-75.
  53. Ramírez, Miguel D. (1994). Public and Private Investment in Mexico 1950-1990: An Empirical Analysis, Southern Economic Journal, 61, 1-17.
  54. Ribeiro, Marcio y J. Teixeira (2001). Análisis econométrico de la inversión privada en Brasil, Revista de la CEPAL, 77, 159-173.
  55. Seater, John J. (1993). Ricardian Equivalence, Journal of Economic Literature, 31, 142-190.
  56. Sen, Amartya (2003). On Unit Root Test when the alternative is a Trend Broken Stationary Process, Journal of Business and Economic Statistics, 21, 11-30.
  57. Servén, Luis y A. Solimano (1991). Adjustment Policies and Investment Performance in Developing Countries. Theory, Country Experiences and Policy Implications, The World Bank Working Paper Series, núm. 606.
  58. Shah, Anwar (1988). Public Infrastructure and Private Sector Profitability and Productivity in Mexico, The World Bank Working Paper Series, núm. 100.
  59. Wang, Baotai (2005). Effects of Government Expenditure on Private Investment: Canadian Empirical Evidence, Empirical Economics, 30, 493-504.
  60. Wylie, Peter J. (1996). Infrastructure and Canadian Economic Growth 1946- 1991, The Canadian Journal of Economics, 29, S350.S355.

Most read articles by the same author(s)