Analysis of the Relationship Between Private Investment and Public Investment in Mexico

Ana Laura Bojorquez Carrillo; Victor Manuel Villasuso Pino; Lilia Carolina Aviles Heredia

doi:doi:10.11648/j.ijefm.20180604.15

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Analysis of the Relationship Between Private Investment and Public Investment in Mexico

Ana Laura Bojorquez Carrillo, Victor Manuel Villasuso Pino, Lilia Carolina Aviles Heredia

Published in International Journal of Economics, Finance and Management Sciences (Volume 6, Issue 4)

Received: 16 July 2018 Accepted: 8 August 2018 Published: 15 September 2018

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Abstract

The aim of this study is to identify the relationships between domestic private investment and domestic public investment in Mexico. The hypotheses are as follows: H1 – Domestic public investment generates domestic private investment (period between 1993 and 2017); H2 – Domestic public investment generates domestic private investment (period between 1993 and 2008); H3 – Domestic public investment generates domestic private investment (period between 2009 and 2017). In order to analyze the relationship between the variables in this study we used the quarterly data series on public gross fixed capital formation (public GFCF) and private gross fixed capital formation (private GFCF) provided by the Mexican System of National Accounts, corresponding to the period between the first quarter of 1993 and the second quarter of 2017. In order to fulfill the aims of this study, the following stages were performed: identification of the time series models, using the methodology consisting of autoregressive integrated moving average models or ARIMA models; validation of the models identified; determination of the cross correlation function; and regression analysis of the transformed series. The main results of the study for the series from 1993 to 2017 show a statistically significant direct relationship between private investment and public investment. This confirms hypothesis 1: Domestic public investment generates domestic private investment (period between 1993 and 2017). The value of the Durbin-Watson statistic for this model is 2.103, meaning that the residuals are independent. The value of the constant in the model is not statistically significant. For the series from 1993 to 2008 there is a statistically significant direct relationship between private investment and public investment. This confirms hypothesis 2: Domestic public investment generates domestic private investment, and the residuals are independent. With regard to the results for the series from 2009 to 2017, there is a statistically significant direct relationship between private investment and public investment. This confirms hypothesis 3: Domestic public investment generates domestic private investment (period between 2009 and 2017). The value of the Durbin-Watson statistic for this model is 1.74, meaning that the residuals are independent. The value of the constant in the model is statistically significant.

Published in	International Journal of Economics, Finance and Management Sciences (Volume 6, Issue 4)
DOI	10.11648/j.ijefm.20180604.15
Page(s)	174-184
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2018. Published by Science Publishing Group

Keywords

Private Investment, Public Investment, Time-Series Models, Fiscal Policy and Crowding in

References

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APA Style

Ana Laura Bojorquez Carrillo, Victor Manuel Villasuso Pino, Lilia Carolina Aviles Heredia. (2018). Analysis of the Relationship Between Private Investment and Public Investment in Mexico. International Journal of Economics, Finance and Management Sciences, 6(4), 174-184. https://doi.org/10.11648/j.ijefm.20180604.15

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ACS Style

Ana Laura Bojorquez Carrillo; Victor Manuel Villasuso Pino; Lilia Carolina Aviles Heredia. Analysis of the Relationship Between Private Investment and Public Investment in Mexico. Int. J. Econ. Finance Manag. Sci. 2018, 6(4), 174-184. doi: 10.11648/j.ijefm.20180604.15

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AMA Style

Ana Laura Bojorquez Carrillo, Victor Manuel Villasuso Pino, Lilia Carolina Aviles Heredia. Analysis of the Relationship Between Private Investment and Public Investment in Mexico. Int J Econ Finance Manag Sci. 2018;6(4):174-184. doi: 10.11648/j.ijefm.20180604.15

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@article{10.11648/j.ijefm.20180604.15,
  author = {Ana Laura Bojorquez Carrillo and Victor Manuel Villasuso Pino and Lilia Carolina Aviles Heredia},
  title = {Analysis of the Relationship Between Private Investment and Public Investment in Mexico},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {6},
  number = {4},
  pages = {174-184},
  doi = {10.11648/j.ijefm.20180604.15},
  url = {https://doi.org/10.11648/j.ijefm.20180604.15},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20180604.15},
  abstract = {The aim of this study is to identify the relationships between domestic private investment and domestic public investment in Mexico. The hypotheses are as follows: H1 – Domestic public investment generates domestic private investment (period between 1993 and 2017); H2 – Domestic public investment generates domestic private investment (period between 1993 and 2008); H3 – Domestic public investment generates domestic private investment (period between 2009 and 2017). In order to analyze the relationship between the variables in this study we used the quarterly data series on public gross fixed capital formation (public GFCF) and private gross fixed capital formation (private GFCF) provided by the Mexican System of National Accounts, corresponding to the period between the first quarter of 1993 and the second quarter of 2017. In order to fulfill the aims of this study, the following stages were performed: identification of the time series models, using the methodology consisting of autoregressive integrated moving average models or ARIMA models; validation of the models identified; determination of the cross correlation function; and regression analysis of the transformed series. The main results of the study for the series from 1993 to 2017 show a statistically significant direct relationship between private investment and public investment. This confirms hypothesis 1: Domestic public investment generates domestic private investment (period between 1993 and 2017). The value of the Durbin-Watson statistic for this model is 2.103, meaning that the residuals are independent. The value of the constant in the model is not statistically significant. For the series from 1993 to 2008 there is a statistically significant direct relationship between private investment and public investment. This confirms hypothesis 2: Domestic public investment generates domestic private investment, and the residuals are independent. With regard to the results for the series from 2009 to 2017, there is a statistically significant direct relationship between private investment and public investment. This confirms hypothesis 3: Domestic public investment generates domestic private investment (period between 2009 and 2017). The value of the Durbin-Watson statistic for this model is 1.74, meaning that the residuals are independent. The value of the constant in the model is statistically significant.},
 year = {2018}
}

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TY  - JOUR
T1  - Analysis of the Relationship Between Private Investment and Public Investment in Mexico
AU  - Ana Laura Bojorquez Carrillo
AU  - Victor Manuel Villasuso Pino
AU  - Lilia Carolina Aviles Heredia
Y1  - 2018/09/15
PY  - 2018
N1  - https://doi.org/10.11648/j.ijefm.20180604.15
DO  - 10.11648/j.ijefm.20180604.15
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 174
EP  - 184
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20180604.15
AB  - The aim of this study is to identify the relationships between domestic private investment and domestic public investment in Mexico. The hypotheses are as follows: H1 – Domestic public investment generates domestic private investment (period between 1993 and 2017); H2 – Domestic public investment generates domestic private investment (period between 1993 and 2008); H3 – Domestic public investment generates domestic private investment (period between 2009 and 2017). In order to analyze the relationship between the variables in this study we used the quarterly data series on public gross fixed capital formation (public GFCF) and private gross fixed capital formation (private GFCF) provided by the Mexican System of National Accounts, corresponding to the period between the first quarter of 1993 and the second quarter of 2017. In order to fulfill the aims of this study, the following stages were performed: identification of the time series models, using the methodology consisting of autoregressive integrated moving average models or ARIMA models; validation of the models identified; determination of the cross correlation function; and regression analysis of the transformed series. The main results of the study for the series from 1993 to 2017 show a statistically significant direct relationship between private investment and public investment. This confirms hypothesis 1: Domestic public investment generates domestic private investment (period between 1993 and 2017). The value of the Durbin-Watson statistic for this model is 2.103, meaning that the residuals are independent. The value of the constant in the model is not statistically significant. For the series from 1993 to 2008 there is a statistically significant direct relationship between private investment and public investment. This confirms hypothesis 2: Domestic public investment generates domestic private investment, and the residuals are independent. With regard to the results for the series from 2009 to 2017, there is a statistically significant direct relationship between private investment and public investment. This confirms hypothesis 3: Domestic public investment generates domestic private investment (period between 2009 and 2017). The value of the Durbin-Watson statistic for this model is 1.74, meaning that the residuals are independent. The value of the constant in the model is statistically significant.
VL  - 6
IS  - 4
ER  -

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Author Information

Ana Laura Bojorquez Carrillo

Faculty of Accounting and Administration, Autonomous University of Yucatan, Merida, Mexico
Victor Manuel Villasuso Pino

Faculty of Accounting and Administration, Autonomous University of Yucatan, Merida, Mexico
Lilia Carolina Aviles Heredia

Faculty of Accounting and Administration, Autonomous University of Yucatan, Merida, Mexico

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APA Style

Ana Laura Bojorquez Carrillo, Victor Manuel Villasuso Pino, Lilia Carolina Aviles Heredia. (2018). Analysis of the Relationship Between Private Investment and Public Investment in Mexico. International Journal of Economics, Finance and Management Sciences, 6(4), 174-184. https://doi.org/10.11648/j.ijefm.20180604.15

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ACS Style

Ana Laura Bojorquez Carrillo; Victor Manuel Villasuso Pino; Lilia Carolina Aviles Heredia. Analysis of the Relationship Between Private Investment and Public Investment in Mexico. Int. J. Econ. Finance Manag. Sci. 2018, 6(4), 174-184. doi: 10.11648/j.ijefm.20180604.15

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AMA Style

Ana Laura Bojorquez Carrillo, Victor Manuel Villasuso Pino, Lilia Carolina Aviles Heredia. Analysis of the Relationship Between Private Investment and Public Investment in Mexico. Int J Econ Finance Manag Sci. 2018;6(4):174-184. doi: 10.11648/j.ijefm.20180604.15

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@article{10.11648/j.ijefm.20180604.15,
  author = {Ana Laura Bojorquez Carrillo and Victor Manuel Villasuso Pino and Lilia Carolina Aviles Heredia},
  title = {Analysis of the Relationship Between Private Investment and Public Investment in Mexico},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {6},
  number = {4},
  pages = {174-184},
  doi = {10.11648/j.ijefm.20180604.15},
  url = {https://doi.org/10.11648/j.ijefm.20180604.15},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20180604.15},
  abstract = {The aim of this study is to identify the relationships between domestic private investment and domestic public investment in Mexico. The hypotheses are as follows: H1 – Domestic public investment generates domestic private investment (period between 1993 and 2017); H2 – Domestic public investment generates domestic private investment (period between 1993 and 2008); H3 – Domestic public investment generates domestic private investment (period between 2009 and 2017). In order to analyze the relationship between the variables in this study we used the quarterly data series on public gross fixed capital formation (public GFCF) and private gross fixed capital formation (private GFCF) provided by the Mexican System of National Accounts, corresponding to the period between the first quarter of 1993 and the second quarter of 2017. In order to fulfill the aims of this study, the following stages were performed: identification of the time series models, using the methodology consisting of autoregressive integrated moving average models or ARIMA models; validation of the models identified; determination of the cross correlation function; and regression analysis of the transformed series. The main results of the study for the series from 1993 to 2017 show a statistically significant direct relationship between private investment and public investment. This confirms hypothesis 1: Domestic public investment generates domestic private investment (period between 1993 and 2017). The value of the Durbin-Watson statistic for this model is 2.103, meaning that the residuals are independent. The value of the constant in the model is not statistically significant. For the series from 1993 to 2008 there is a statistically significant direct relationship between private investment and public investment. This confirms hypothesis 2: Domestic public investment generates domestic private investment, and the residuals are independent. With regard to the results for the series from 2009 to 2017, there is a statistically significant direct relationship between private investment and public investment. This confirms hypothesis 3: Domestic public investment generates domestic private investment (period between 2009 and 2017). The value of the Durbin-Watson statistic for this model is 1.74, meaning that the residuals are independent. The value of the constant in the model is statistically significant.},
 year = {2018}
}

Copy | Download

TY  - JOUR
T1  - Analysis of the Relationship Between Private Investment and Public Investment in Mexico
AU  - Ana Laura Bojorquez Carrillo
AU  - Victor Manuel Villasuso Pino
AU  - Lilia Carolina Aviles Heredia
Y1  - 2018/09/15
PY  - 2018
N1  - https://doi.org/10.11648/j.ijefm.20180604.15
DO  - 10.11648/j.ijefm.20180604.15
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 174
EP  - 184
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20180604.15
AB  - The aim of this study is to identify the relationships between domestic private investment and domestic public investment in Mexico. The hypotheses are as follows: H1 – Domestic public investment generates domestic private investment (period between 1993 and 2017); H2 – Domestic public investment generates domestic private investment (period between 1993 and 2008); H3 – Domestic public investment generates domestic private investment (period between 2009 and 2017). In order to analyze the relationship between the variables in this study we used the quarterly data series on public gross fixed capital formation (public GFCF) and private gross fixed capital formation (private GFCF) provided by the Mexican System of National Accounts, corresponding to the period between the first quarter of 1993 and the second quarter of 2017. In order to fulfill the aims of this study, the following stages were performed: identification of the time series models, using the methodology consisting of autoregressive integrated moving average models or ARIMA models; validation of the models identified; determination of the cross correlation function; and regression analysis of the transformed series. The main results of the study for the series from 1993 to 2017 show a statistically significant direct relationship between private investment and public investment. This confirms hypothesis 1: Domestic public investment generates domestic private investment (period between 1993 and 2017). The value of the Durbin-Watson statistic for this model is 2.103, meaning that the residuals are independent. The value of the constant in the model is not statistically significant. For the series from 1993 to 2008 there is a statistically significant direct relationship between private investment and public investment. This confirms hypothesis 2: Domestic public investment generates domestic private investment, and the residuals are independent. With regard to the results for the series from 2009 to 2017, there is a statistically significant direct relationship between private investment and public investment. This confirms hypothesis 3: Domestic public investment generates domestic private investment (period between 2009 and 2017). The value of the Durbin-Watson statistic for this model is 1.74, meaning that the residuals are independent. The value of the constant in the model is statistically significant.
VL  - 6
IS  - 4
ER  -

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