Article

Determinants of Private Investment in United Arab Emirates

May 08, 2013

DOI:

Published in: International Journal of Economics, Commerce and Management, Vol. 1, Issue 2, 2013.

/ Salem Al Jundi / Rafiq Hijazi

The purpose of the study is to determine key factors influencing private investment in the UAE. The study examines eleven independent variables as determinants of private investment, according to adjusted data in the UAE for the period between 1990 and 2010. The study’s methodology aims to formulate a linear regression model for private investment after testing multicollinearity between independent variables. The Augmented Dickey-Fuller and Phillips-Perron tests will be utilized to investigate the stationarity of the variables. Then, Johansen Cointegration test will be conducted. Finally, the Vector Error-Correction Model will be fitted to the private investment data. The findings include that the real public expenditure stimulates the private investment more than the non-oil GDP. More specifically, ceteris paribus, a ten-million Dirham increase in the real public expenditure stimulates private investment by 3.16 million Dirhams; however a ten-million Dirham increase in the non-oil GDP will result only in a 1.11 million Dirham increase in the private investment. Practical implications lead into further studies as the causality between economic growth and investment, in addition to the relationship between private and public investments. The value of the study is that the private investment depends, first of all, on real public expenditures. The fiscal policy should play a vital role to stimulate private investment and smooth business cycle. Al-Jundi, S., & Hijazi, R. (2013). Determinants of Private Investment in United Arab Emirates. International Journal of Economics, Commerce and Management, 1(2), 1-13.

Other Researches

Effect of consumer innovativeness on new product purchase intentions through learning process and perceived value

Prior research on the impact of consumer innovativeness on new product purchase intentions experienced confusion about the definition of innovativeness and the interest in a specific domain. To fill the gaps, this study builds a new model to examine...

A survey dataset on determinants of administrative corruption

This data article describes a survey dataset on administrative corruption and its main determinants (culture, organizational culture, political instability, and institutional weakness) in addition to social class. Prior research was consulted to det...

The Effect of Culture and Organizational Culture on Administrative Corruption

There is extensive literature on corruption, such as political and corporate corruption, some of which examines factors influencing administrative corruption. However, to the best of our knowledge, the multivariate influences of culture and organiza...

Why is Administrative Corruption Pervasive? A Mediation Approach

Despite the existence of valuable literature on political and corporate corruption, there have been only a limited number of papers examining the determinants of administrative corruption. A thorough search of the relevant literature shows there has...

Causality between economic growth and investment in the United Arab Emirates

The study aims to work out the exact pattern of causality between economic growth rate and each of investment categories in the United Arab Emirates. Causality is examined by numerous researchers. However, few have studied the relationship between g...

FEASIBILITY STUDY OF A PRIVATE SCHOOL IN THE UNITED ARAB EMIRATES

The paper investigates the setting up of a private school in the emerging market of Al Ain, United Arab Emirates. The study adopts common criteria for conducting a feasibility study, and develops pro forma financial statements. The findings show tha...

Risk Management Model for Al-Ain University of Science & Technology, UAE

Risks are defined as something or somebody impacting adversely upon organizational objectives. Plans must be available to anticipate and manage such an occurrence. Risk management will, therefore, include identification, analysis, prioritizing and r...

HOUSEHOLD CONSUMPTION PATTERN IN AL-AIN, UAE

What is the consumption pattern of a typical household in Al-Ain, UAE? To answer the question, a template of a household budget is developed through discussion. It is found that households spent 22% of their total expenditures on housing, 16% on non...

Economic Diversification in the United Arab Emirates

Economic diversification, in the context of the UAE economy, means reducing dependence on the crude oil sector by developing a non-oil economy, till it becomes capable of sustainable growth after the short-lived oil reserves exhaust. The study is ...

Inflation in United Arab Emirates

The United Arab Emirates (UAE) economy as a part of the global economy paid a high cost to eliminate the inflation rate. The global financial crisis brought deep recession even in the most developed countries. The crisis obviously attacked the UAE e...