Determinants of investment in Muslim developing countries: an empirical investigation

Article


Salahuddin, Mohammad, Islam, Md. Rabiul and Salim, Syed Abdullah. 2009. "Determinants of investment in Muslim developing countries: an empirical investigation." International Journal of Economics and Management. 3 (1), pp. 100-129.
Article Title

Determinants of investment in Muslim developing countries: an empirical investigation

Article CategoryArticle
AuthorsSalahuddin, Mohammad (Author), Islam, Md. Rabiul (Author) and Salim, Syed Abdullah (Author)
Journal TitleInternational Journal of Economics and Management
Journal Citation3 (1), pp. 100-129
Number of Pages10
Year2009
Place of PublicationSelangor, Malaysia
Web Address (URL)http://econ.upm.edu.my/ijem/vol3no1/bab08.pdf
Abstract

Investment has widely been regarded as one of the main driving forces of economic growth. Despite enormous growth potentials and resources, the overall investment rates of most of the Muslim developing countries are relatively lower than those of non-Muslim developing countries. Therefore, this paper attempts to investigate the gross investment behavior in a panel of 21 Muslim developing countries over the period of 1970 to 2002. Fixed Effects estimator is used to capture unobserved country specific effects. 2-Step 1 st Difference Generalized Method of Moments (GMM) dynamic panel estimator is employed to offset endogeneity of the regressors. Granger causality test is performed to see whether reverse causality exists. Robustness of estimated results using WDI (2004) data is checked by re-estimating the models using PWT (6.2) data. Results suggest that the lagged investment, growth rate of per capita real GDP, domestic savings, trade openness and institutional development have positive significant effect on investment. In addition, foreign aid and private sector credit are found to have significant positive impact on investment but not robust. Foreign debt servicing has consistent negative effect on investment. Other variables such as, inflation rate, lending rate, human capital and population growth have been found to have no significant effect on investment. Finally the study recommends that these countries should pursue policies that encourage more domestic resource mobilization reducing dependence on foreign debt and increase per capita real GDP growth, trade openness, domestic savings and institutional development in order to boost gross investment.

Keywordsinvestment; Muslim and developing countries; panel data
ANZSRC Field of Research 2020380110. International economics
380204. Panel data analysis
500405. Religion, society and culture
Public Notes

Copyright Universiti Putra Malaysia 2009. Permanent restricted access to published version due to publisher copyright policy.

Byline AffiliationsSoutheast University, Bangladesh
Monash University
Darul Ihsan University, Bangladesh
Institution of OriginUniversity of Southern Queensland
Permalink -

https://research.usq.edu.au/item/q2w70/determinants-of-investment-in-muslim-developing-countries-an-empirical-investigation

  • 1666
    total views
  • 5
    total downloads
  • 3
    views this month
  • 0
    downloads this month

Export as

Related outputs

Urbanization-globalization-CO2 emissions nexus revisited: empirical evidence from South Africa
Salahuddin, Mohammad, Gow, Jeff, Ali, Md. Idris, Hossain, Rahat, Al-Azami, Khaleda Shaheen, Akbar, Delwar and Gedikli, Ayfer. 2019. "Urbanization-globalization-CO2 emissions nexus revisited: empirical evidence from South Africa." Heliyon. 5 (6), pp. 1-9. https://doi.org/10.1016/j.heliyon.2019.e01974
Globalisation, poverty and corruption: retarding progress in South Africa
Salahuddin, Mohammad, Vink, Nick, Ralph, Nicholas and Gow, Jeff. 2020. "Globalisation, poverty and corruption: retarding progress in South Africa." Development Southern Africa. 37 (4), pp. 617-643. https://doi.org/10.1080/0376835X.2019.1678460
Effects of environmental quality on agricultural productivity in sub Saharan African countries: a second generation panel based empirical assessment
Salahuddin, Mohammad, Gow, Jeff and Vink, Nick. 2020. "Effects of environmental quality on agricultural productivity in sub Saharan African countries: a second generation panel based empirical assessment." Science of the Total Environment. 741. https://doi.org/10.1016/j.scitotenv.2020.140520
Effects of economic growth, foreign direct investment and internet use on child health outcomes: empirical evidence from South Africa
Salahuddin, Mohammad, Vink, Nick, Ralph, Nicholas and Gow, Jeff. 2020. "Effects of economic growth, foreign direct investment and internet use on child health outcomes: empirical evidence from South Africa." Development Studies Research. 7 (1), pp. 1-17. https://doi.org/10.1080/21665095.2020.1717362
Effects of energy consumption and economic growth on environmental quality: evidence from Qatar
Salahuddin, Mohammad and Gow, Jeff. 2019. "Effects of energy consumption and economic growth on environmental quality: evidence from Qatar." Environmental Science and Pollution Research. 26 (19), pp. 18124-18142. https://doi.org/10.1007/s11356-019-05188-w
The effects of urbanization and globalization on CO2 emissions: evidence from the Sub-Saharan Africa (SSA) countries
Salahuddin, Mohammad, Ali, Md. Idris, Vink, Nick and Gow, Jeff. 2019. "The effects of urbanization and globalization on CO2 emissions: evidence from the Sub-Saharan Africa (SSA) countries." Environmental Science and Pollution Research. 26 (3), pp. 2699-2709. https://doi.org/10.1007/s11356-018-3790-4
Contribution of the internet towards sustainable development through its economic growth, social capital and environmental effects
Salahuddin, Mohammad. 2016. Contribution of the internet towards sustainable development through its economic growth, social capital and environmental effects. PhD Thesis Doctor of Philosophy. University of Southern Queensland.
Ecological footprint and real income: panel data evidence from the 27 highest emitting countries
Uddin, Gazi Ashir, Salahuddin, Mohammad, Alam, Khorshed and Gow, Jeff. 2017. "Ecological footprint and real income: panel data evidence from the 27 highest emitting countries." Ecological Indicators. 77, pp. 166-175. https://doi.org/10.1016/j.ecolind.2017.01.003
Is the long-run relationship between economic growth, electricity consumption, carbon dioxide emissions and financial development in Gulf Cooperation Council Countries robust?
Salahuddin, Mohammad, Gow, Jeff and Ozturk, Ilhan. 2015. "Is the long-run relationship between economic growth, electricity consumption, carbon dioxide emissions and financial development in Gulf Cooperation Council Countries robust?" Renewable and Sustainable Energy Reviews. 51, pp. 317-326. https://doi.org/10.1016/j.rser.2015.06.005
The effects of electricity consumption, economic growth, financial development and foreign direct investment on CO2 emissions in Kuwait
Salahuddin, Mohammad, Alam, Khorshed, Ozturk, Ilhan and Sohag, Kazi. 2018. "The effects of electricity consumption, economic growth, financial development and foreign direct investment on CO2 emissions in Kuwait." Renewable and Sustainable Energy Reviews. 81 (2), pp. 2002-2010. https://doi.org/10.1016/j.rser.2017.06.009
The effects of internet usage, financial development and trade openness on economic growth in South Africa: a time series analysis
Salahuddin, Mohammad and Gow, Jeff. 2016. "The effects of internet usage, financial development and trade openness on economic growth in South Africa: a time series analysis." Telematics and Informatics. 33 (4), pp. 1141-1154. https://doi.org/10.1016/j.tele.2015.11.006
The effects of internet usage and economic growth on CO2 emissions in OECD countries: a panel investigation
Salahuddin, Mohammad, Alam, Khorshed and Ozturk, Ilhan. 2016. "The effects of internet usage and economic growth on CO2 emissions in OECD countries: a panel investigation." Renewable and Sustainable Energy Reviews. 62, pp. 1226-1235. https://doi.org/10.1016/j.rser.2016.04.018
Does internet stimulate the accumulation of social capital? A macro-perspective from Australia
Salahuddin, Mohammad, Tisdell, Clem, Burton, Lorelle and Alam, Khorshed. 2016. "Does internet stimulate the accumulation of social capital? A macro-perspective from Australia." Economic Analysis and Policy. 49, pp. 43-55. https://doi.org/10.1016/j.eap.2015.11.011
Determinants of gross investment in Bangladesh: a time series evidence
Wahid, Abu N. M., Islam, Md. Rabiul and Salahuddin, Mohammad. 2013. "Determinants of gross investment in Bangladesh: a time series evidence." eCanadian Journal of Accounting and Finance. 1 (2), pp. 20-27.
Information and communication technology, electricity consumption and economic growth in OECD countries: a panel data analysis
Salahuddin, Mohammad and Alam, Khorshed. 2016. "Information and communication technology, electricity consumption and economic growth in OECD countries: a panel data analysis." International Journal of Electrical Power and Energy Systems. 76, pp. 185-193. https://doi.org/10.1016/j.ijepes.2015.11.005
Is rapid growth in internet usage environmentally sustainable for Australia? An empirical investigation
Salahuddin, Mohammad, Alam, Khorshed and Ozturk, Ilhan. 2016. "Is rapid growth in internet usage environmentally sustainable for Australia? An empirical investigation." Environmental Science and Pollution Research. 23 (5), pp. 4700-4713. https://doi.org/10.1007/s11356-015-5689-7
Social capital formation, internet usage and economic growth in Australia: evidence from time series data
Salahuddin, Mohammad, Tisdell, Clem, Burton, Lorelle and Alam, Khorshed. 2015. "Social capital formation, internet usage and economic growth in Australia: evidence from time series data." International Journal of Economics and Financial Issues. 5 (4), pp. 942-953.
Assessing digital divide and its determinants: a case study of households’ perception in the Western Downs region of Queensland
Alam, Khorshed and Salahuddin, Mohammad. 2015. Assessing digital divide and its determinants: a case study of households’ perception in the Western Downs region of Queensland. Toowoomba, Queensland. University of Southern Queensland.
Internet usage, electricity consumption and economic growth in Australia: a time series evidence
Salahuddin, Mohammad and Alam, Khorshed. 2015. "Internet usage, electricity consumption and economic growth in Australia: a time series evidence." Telematics and Informatics. 32 (4), pp. 862-878. https://doi.org/10.1016/j.tele.2015.04.011
Economic growth, energy consumption and CO2 emissions in Gulf cooperation council countries
Salahuddin, Mohammad and Gow, Jeff. 2014. "Economic growth, energy consumption and CO2 emissions in Gulf cooperation council countries." Energy. 73, pp. 44-58. https://doi.org/10.1016/j.energy.2014.05.054
Internet usage, economic growth and financial development in Australia
Salahuddin, Mohammad and Alam, Khorshed. 2014. "Internet usage, economic growth and financial development in Australia." 2014 Econometric Society of Australasian Meeting (ESAM) and Australian Conference of Economists (ACE). Hobart, Tasmania 01 - 04 Jul 2014
Savings and investment in South Asia: evidence from likelihood ratio based panel cointegration
Wahid, Abu N. M., Salahuddin, Mohammad and Noman, Abdullah M.. 2010. "Savings and investment in South Asia: evidence from likelihood ratio based panel cointegration." Journal of Economic Studies. 37 (6), pp. 658-666. https://doi.org/10.1108/01443581011086684
Factors affecting investment in developing countries: a panel data study
Salahuddin, Mohammad and Islam, Md. Rabiul. 2008. "Factors affecting investment in developing countries: a panel data study." Journal of Developing Areas. 42 (1), pp. 21-37.
How can we increase the quality of private schools in Bangladesh from the perspectives of students and managers?
Salahuddin, Mohammad, Islam, Rabiul, Akbar, Delwar and Raihan, Khaled Mahmud. 2008. "How can we increase the quality of private schools in Bangladesh from the perspectives of students and managers?" International Journal of Management Perspectives. 1 (2), pp. 1-14.
Saving investment correlation in South Asia - a panel approach
Wahid, Abu N. M., Salahuddin, Mohammad and Noman, Abdullah M.. 2008. "Saving investment correlation in South Asia - a panel approach ." The European Journal of Economics, Finance and Administrative Sciences.
The relationship between economic growth and remittances in the presence of cross-sectional dependance
Salahuddin, Mohammad and Gow, Jeff. 2015. "The relationship between economic growth and remittances in the presence of cross-sectional dependance." Journal of Developing Areas. 49 (1), pp. 207-221. https://doi.org/10.1353/jda.2015.0007
Feldstein-Horioka (F-H) puzzle and country-specific effects: evidence from some developing countries' panel data
Salahuddin, Mohammad and Wahid, Abu N. M.. 2012. "Feldstein-Horioka (F-H) puzzle and country-specific effects: evidence from some developing countries' panel data." Indian Economic Journal. 60 (3), pp. 138-147.
Digital divide research in Australia: a critical review
Salahuddin, Mohammad and Alam, Khorshed. 2013. "Digital divide research in Australia: a critical review." Dalziel, Paul (ed.) 37th Annual Conference of the Australia and New Zealand Regional Science Association: Regions that Work: Research, Practice and Policy. Hervey Bay, Australia 03 - 06 Dec 2013 Lincoln, New Zealand.
Empirical link between growth and remittance: evidence from panel data
Salahuddin, Mohammad. 2013. "Empirical link between growth and remittance: evidence from panel data." Journal of Applied Business and Economics. 14 (5).
Empirical link between economic growth, energy consumption and CO2 emission in Australia
Salahuddin, Mohammad and Khan, Shahjahan. 2013. "Empirical link between economic growth, energy consumption and CO2 emission in Australia." Journal of Developing Areas. 47 (2), pp. 81-92.
Factors affecting broadband penetration in OECD countries: a panel data analysis
Alam, Khorshed and Salahuddin, Mohammad. 2012. "Factors affecting broadband penetration in OECD countries: a panel data analysis." International Statistical Conference on Statistics in Planning and Development: Bangladesh Perspective (2012). Dhaka, Bangladesh 27 - 29 Dec 2012 Dhaaka, Bangladesh.
The determinants of economic growth in Pakistan: does stock market development play a major role?
Rahman, Mohammad Mafizur and Salahuddin, Mohammad. 2010. "The determinants of economic growth in Pakistan: does stock market development play a major role?" Economic Issues. 15 (2), pp. 69-86.
The determinants of economic growth in Pakistan: does stock market development play a major role?
Rahman, Mohammad Mafizur and Salahuddin, Mohammad. 2009. "The determinants of economic growth in Pakistan: does stock market development play a major role?" 38th Australian Conference of Economists (ACE 2009). Adelaide, Australia 28 - 30 Sep 2009 Adelaide, Australia.