Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/267281 
Year of Publication: 
2022
Series/Report no.: 
CESifo Working Paper No. 10048
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We study the impacts of public investment, notably in construction and in R&D on economic growth and of crowding-out effects on private investment. For this purpose, we use Panel Vector Autoregression (PVAR) models and the Generalised Method of Moments (GMM) approach for 40 advanced and emerging countries from 1995 to 2019. Our findings are as follows: i) innovations in public investment have more positive effects on GDP growth and private investment in emerging economies; ii) the positive impulse of public investment on private sector is pronounced and significant in emerging economies; iii) government construction investment has a more positive effect on economic growth in emerging economies; iv) innovations in public construction crowd-out private investment spending in advanced countries; v) emerging economies benefit from public R&D investment; vi) the public investment multiplier of the full sample is 1.67, while it is 0.87 for advanced economies and 2.29 for emerging economies.
Subjects: 
public investment
construction
research & development
PVAR
JEL: 
C33
E32
H54
Document Type: 
Working Paper
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