Authors :
Linda Julie Tiague Zanfack; Armand Gilbert Noula
Volume/Issue :
Volume 6 - 2021, Issue 7 - July
Google Scholar :
http://bitly.ws/9nMw
Scribd :
https://bit.ly/3hpOjl1
Abstract :
The objective of this paper is to study the
conditional effect of the new convergence criteria on the
relationship between private and public investment in
CEMAC and WEAMU. The data used come from a
combination of three sources, the WDI database, various
convergence reports in the Franc Zone and the IMF's
International Financial Statistics (IFS). Using a
retrospective analysis over the period 1994-2016 and the
instrumental variables estimator, the results are as
follows: There is a crowding out effect of public
investment on investment in CEMAC and WAEMU;
The adoption of the NCC in 1994 would have mitigated
the crowding out effect in the dualism of public and
private investment in CEMAC and WAEMU by about
0.096. The coefficients judging the crowding out are
respectively -0.89 in the CAEMC and 0.599 in the
WAEMU; Concerning the CAEMC countries, the
respect of the public debt criterion (standard lower than
or equal to 60% of GDP) would have led to a driving
effect of public investment on private investment. The
coefficient assigned to this cross-country variable is
positive and significant at the 10% level (0.3334). The
respect of the new criterion of overall budget balance
(norm higher than or equal to -1.5% of GDP) since 1994
would have led to a spillover effect of public investment
on private investment. The coefficient associated with
the invpublic*dumsbg cross-tabulated variable is
positive and significant at the 1% level and of the order
of 0.59 points. The new SBG criterion (norm ≥ -3% of
GDP) induces a positive and significant effect at the 10%
threshold with a coefficient of 0.43. This result reflects a
spillover effect of public investment on private
investment in the WAEMU
Keywords :
Private Investment, Conditional Effect, Convergence Criteria, Crowding Out, Crowding In.
The objective of this paper is to study the
conditional effect of the new convergence criteria on the
relationship between private and public investment in
CEMAC and WEAMU. The data used come from a
combination of three sources, the WDI database, various
convergence reports in the Franc Zone and the IMF's
International Financial Statistics (IFS). Using a
retrospective analysis over the period 1994-2016 and the
instrumental variables estimator, the results are as
follows: There is a crowding out effect of public
investment on investment in CEMAC and WAEMU;
The adoption of the NCC in 1994 would have mitigated
the crowding out effect in the dualism of public and
private investment in CEMAC and WAEMU by about
0.096. The coefficients judging the crowding out are
respectively -0.89 in the CAEMC and 0.599 in the
WAEMU; Concerning the CAEMC countries, the
respect of the public debt criterion (standard lower than
or equal to 60% of GDP) would have led to a driving
effect of public investment on private investment. The
coefficient assigned to this cross-country variable is
positive and significant at the 10% level (0.3334). The
respect of the new criterion of overall budget balance
(norm higher than or equal to -1.5% of GDP) since 1994
would have led to a spillover effect of public investment
on private investment. The coefficient associated with
the invpublic*dumsbg cross-tabulated variable is
positive and significant at the 1% level and of the order
of 0.59 points. The new SBG criterion (norm ≥ -3% of
GDP) induces a positive and significant effect at the 10%
threshold with a coefficient of 0.43. This result reflects a
spillover effect of public investment on private
investment in the WAEMU
Keywords :
Private Investment, Conditional Effect, Convergence Criteria, Crowding Out, Crowding In.
