Munich Personal RePEc Archive

THE financial determinants of private investment in ghana

Eshun, Maame Esi and Adu, George and Buabeng, Emmanuel (2014): THE financial determinants of private investment in ghana. Published in: International Journal of Financial Economics , Vol. Vol. 3, (July 2014): pp. 25-40.

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This paper examines the financial determinants of private investment in Ghana using annual time series data from 1970 to 2010. Based on the autoregressive distributed lag (ARDL) bounds testing procedure to cointegration, the paper finds existence of cointegration among the variables. The empirical results support the view that private investment declines in both the short run and long run if the real interest rate is high and investors face severe financing constraints when credit is made scarce to the sector. Recommended were policies that would eliminate the financing constraints to make credit easily accessible to private investors.

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