PUBLIC INVESTMENT, FOREIGN DIRECT INVESTMENT AND PRIVATE DOMESTIC INVESTMENT: RIPPLE OR EVICTION EFFECTS IN TOGO

KUAWO ASSAN JOHNSON

Volume : V, Issue : XII, December - 2015

PUBLIC INVESTMENT, FOREIGN DIRECT INVESTMENT AND PRIVATE DOMESTIC INVESTMENT: RIPPLE OR EVICTION EFFECTS IN TOGO

Kuawo Assan Johnson

Abstract :

In a macroeconomic context characterized by the revival of economic growth and in view of the avowed objective of making an emerging Togo in 2030, we have witnessed in recent years a major campaign to promote investment both domestic that foreign direct investment. Given the theoretical ambiguity of the relationship between these different types of investments, we propose in this paper an empirical validation of the interactions within the triptych FDI– public investment – domestic private investment. Estimates using a VECM showed that long–term private investment has a ripple effect on foreign direct investment and public, which conversely also have a positive influence on domestic private investment. In addition, there would be no significant relationship between public investment and FDI. Regarding the short term, there is a training of public investment in the previous period effect on FDI while domestic private investment tends to oust. Finally, an increase in FDI, stimulate in the short term, both public and domestic private investment.