The effect of governance environment on public investment in developing countries: Empirical evidence

Abstract

The institutional environment plays a critical role in the process of economic development in most countries worldwide. The difference in the institutional environment leads to a difference in the level of development between countries. The paper empirically investigates the effect of the governance environment on public investment for 72 developing countries during the period of 2002 -2018 using the system GMM Arellano-Bond estimators. The findings indicatedthat the governance environment hinders public investment in these countries. Besides, economic growth stimulates while inflation and infrastructure reduce public investment. These findings suggest some important policy implications for governments in developing countries, especially Vietnam, in reforming the governance environment to promote public investment for economic development.

Keywords

• đầu tư công
• môi trường quản trị công
• phương pháp gmm hệ thống
• các quốc gia đang phát triển