An Analysis of Determinants of Private Investment in Zimbabwe for the Period 2009- 2011
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Date
2013
Authors
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Journal ISSN
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Publisher
Management Journals
Abstract
The study set out to analyse the determinants of private investment post the introduction of the multi-currency
system in Zimbabwe (2009-2011). This was prompted by the sluggish growth in private investment thereby
crippling the economy’s growth on the large. Variables identified for the study include political risk, GDP,
national savings, inflation, interest rates, public investment, trade terms and debt servicing. To enhance the
analysis, the study assumed correlation analysis and multiple regression in an effort to examine how private
investment related to each identified variable as well as the net effect of each variable on private investment.
Though most results from correlation analysis are contrary to the research’s expectations, treating the
variables for co and multicollinearity gave theory aligned results in regression analysis. The study, though not
out rightly disregarding correlation results identifies political risk, interest rate, GDP, debt servicing and trade
terms as key determinants of private investment over the study period. Key though is the realisation that,
statistical significance of results is independent of the practicality of economic principles. In a bid to foster
economic growth and increase private investment, the study recommends the promotion of political stability,
the attraction of FDI, enabling a structured public-private dialogue and promoting Government investment in
infrastructure development among others.
Description
An analysis of Determinations of Private Investment in Zimbabwe for the period 2009-2011 is a published article of the Finance Department.
Keywords
Private Investment and Economic Growth
Citation
Bayai, I. And Nyangara D. 2013. An Analysis of Determinants of Investment in Zimbabwe for the Period 2009-2011. International Journal of Economics and Management Sciences, vol. 2, no. 6, pp. 11-42.