Institutional and Structural Determinants of Investment Worldwide

This paper considers institutional and structural factors associated with investment activity in a panel of up to 129 developed and developing countries. It introduces these factors to a standard neoclassical investment function for open economies,...

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Main Author:	Lim, Jamus Jerome
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2013
Subjects:	AFFILIATED ORGANIZATIONS ARBITRAGE BANK LENDING BANKING CRISES BANKING REGULATION BANKING SECTOR BANKING SYSTEMS BENCHMARK BOND BUSINESS CLIMATE BUSINESS ENVIRONMENT BUSINESS INVESTMENT BUSINESS REGULATION CAPITAL ACCOUNT CAPITAL ACCUMULATION CAPITAL FLOWS CAPITAL FORMATION CAPITAL MARKET CAPITAL MARKETS CAPITAL STOCK CAPITAL STRUCTURE CAPITAL THEORY COMMERCIAL CONTRACT COMPARATIVE ECONOMICS CONTRACT ENFORCEABILITY CONTRACT ENFORCEMENT CORPORATE DEBT CORPORATE TAX CORPORATE TAX RATE COST OF CAPITAL COUNTRY CAPITAL COUNTRY RISK CREDITOR CROSS-BORDER CAPITAL CURRENCY CURRENCY CRISES CURRENCY CRISIS CURRENT ACCOUNT DEFICITS DEBT DEBT FINANCING DEBTOR DEMOCRACY DEMOCRATIC ACCOUNTABILITY DERIVATIVE DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPING ECONOMIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DOMESTIC CREDIT DOMESTIC INTEREST RATE DOMESTIC INVESTMENT DOMESTIC INVESTORS DOMESTIC SAVING ECONOMETRIC ANALYSIS ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC COOPERATION ECONOMIC DEVELOPMENT ECONOMIC FACTORS ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC SIZE ECONOMIC STRUCTURE EMPIRICAL ANALYSIS EMPIRICAL STUDIES ENVIRONMENTS EQUITY MARKETS EXPLOITATION EXPORTS EXPROPRIATION FINANCIAL CONSTRAINTS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL OPENNESS FINANCIAL SECTOR FINANCIAL STRUCTURE FINANCIAL STRUCTURES FINANCIAL SUPPORT FINANCIAL SYSTEMS FINANCIALLY OPEN ECONOMIES FIXED CAPITAL FIXED INVESTMENT FOREIGN DIRECT INVESTMENT FOREIGN INVESTMENT FORMAL ANALYSIS FUTURE RESEARCH GDP GDP DEFLATOR GLOBAL CAPITAL GLOBAL CAPITAL MARKETS GLOBAL RISK GROSS DOMESTIC PRODUCT GROSS FIXED CAPITAL FORMATION GROWTH MODELS GROWTH RATE INCOME INDUSTRIAL COUNTRIES INFLATION INSTITUTIONAL ENVIRONMENT INSTRUMENT INTEREST RATE INTERNATIONAL BANK INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL FLOWS INTERNATIONAL ECONOMICS INTERNATIONAL INVESTMENT INVENTORY INVESTMENT ACTIVITY INVESTMENT BEHAVIOR INVESTMENT CLIMATE INVESTMENT DECISIONS INVESTMENT FINANCING INVESTMENT FUNCTION INVESTMENT INCENTIVES INVESTMENT OPPORTUNITIES INVESTMENT PATTERNS INVESTMENT RATE INVESTMENT RISK INVESTMENT SPENDING INVESTMENT TAX CREDITS INVESTMENT THEORY INVESTOR PROTECTION INVESTOR PROTECTIONS IRREVERSIBILITY LDCS LOANABLE FUNDS MACROECONOMIC LEVEL MACROECONOMIC MODELS MACROECONOMICS MARGINAL PRODUCT MARKET VALUE MATURITY MONETARY FUND MONETARY POLICY OPEN ECONOMIES OPEN ECONOMY ORGANIZATIONAL FORM OUTPUT POLITICAL ECONOMY PORTFOLIOS POSITIVE COEFFICIENT POSITIVE COEFFICIENTS PRIVATE INVESTMENT PRODUCTIVE INVESTMENT PROPERTY RIGHTS REAL EXCHANGE RATE REAL INTEREST REAL INTEREST RATE REGULATORY REGIME RETURNS RULE OF LAW STOCK MARKET STOCK MARKET CAPITALIZATION STOCKS SUBSTITUTION ELASTICITIES TAX TAX CREDITS TAX POLICY TAX RATES TAX STRUCTURE TAXATION THEORETICAL MODELS TRANSACTIONS COSTS WORLD DEVELOPMENT INDICATORS
Online Access:	http://documents.worldbank.org/curated/en/2013/09/18194268/institutional-structural-determinants-investment-worldwide http://hdl.handle.net/10986/16042

id	okr-10986-16042
recordtype	oai_dc
spelling	okr-10986-160422021-04-23T14:03:27Z Institutional and Structural Determinants of Investment Worldwide Lim, Jamus Jerome AFFILIATED ORGANIZATIONS ARBITRAGE BANK LENDING BANKING CRISES BANKING REGULATION BANKING SECTOR BANKING SYSTEMS BENCHMARK BOND BUSINESS CLIMATE BUSINESS ENVIRONMENT BUSINESS INVESTMENT BUSINESS REGULATION CAPITAL ACCOUNT CAPITAL ACCUMULATION CAPITAL FLOWS CAPITAL FORMATION CAPITAL MARKET CAPITAL MARKETS CAPITAL STOCK CAPITAL STRUCTURE CAPITAL THEORY COMMERCIAL CONTRACT COMPARATIVE ECONOMICS CONTRACT ENFORCEABILITY CONTRACT ENFORCEMENT CORPORATE DEBT CORPORATE TAX CORPORATE TAX RATE COST OF CAPITAL COUNTRY CAPITAL COUNTRY RISK CREDITOR CROSS-BORDER CAPITAL CURRENCY CURRENCY CRISES CURRENCY CRISIS CURRENT ACCOUNT DEFICITS DEBT DEBT FINANCING DEBTOR DEMOCRACY DEMOCRATIC ACCOUNTABILITY DERIVATIVE DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPING ECONOMIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DOMESTIC CREDIT DOMESTIC INTEREST RATE DOMESTIC INVESTMENT DOMESTIC INVESTORS DOMESTIC SAVING ECONOMETRIC ANALYSIS ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC COOPERATION ECONOMIC DEVELOPMENT ECONOMIC FACTORS ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC SIZE ECONOMIC STRUCTURE EMPIRICAL ANALYSIS EMPIRICAL STUDIES ENVIRONMENTS EQUITY MARKETS EXPLOITATION EXPORTS EXPROPRIATION FINANCIAL CONSTRAINTS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL OPENNESS FINANCIAL SECTOR FINANCIAL STRUCTURE FINANCIAL STRUCTURES FINANCIAL SUPPORT FINANCIAL SYSTEMS FINANCIALLY OPEN ECONOMIES FIXED CAPITAL FIXED INVESTMENT FOREIGN DIRECT INVESTMENT FOREIGN INVESTMENT FORMAL ANALYSIS FUTURE RESEARCH GDP GDP DEFLATOR GLOBAL CAPITAL GLOBAL CAPITAL MARKETS GLOBAL RISK GROSS DOMESTIC PRODUCT GROSS FIXED CAPITAL FORMATION GROWTH MODELS GROWTH RATE INCOME INDUSTRIAL COUNTRIES INFLATION INSTITUTIONAL ENVIRONMENT INSTRUMENT INTEREST RATE INTERNATIONAL BANK INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL FLOWS INTERNATIONAL ECONOMICS INTERNATIONAL INVESTMENT INVENTORY INVESTMENT ACTIVITY INVESTMENT BEHAVIOR INVESTMENT CLIMATE INVESTMENT DECISIONS INVESTMENT FINANCING INVESTMENT FUNCTION INVESTMENT INCENTIVES INVESTMENT OPPORTUNITIES INVESTMENT PATTERNS INVESTMENT RATE INVESTMENT RISK INVESTMENT SPENDING INVESTMENT TAX CREDITS INVESTMENT THEORY INVESTOR PROTECTION INVESTOR PROTECTIONS IRREVERSIBILITY LDCS LOANABLE FUNDS MACROECONOMIC LEVEL MACROECONOMIC MODELS MACROECONOMICS MARGINAL PRODUCT MARKET VALUE MATURITY MONETARY FUND MONETARY POLICY OPEN ECONOMIES OPEN ECONOMY ORGANIZATIONAL FORM OUTPUT POLITICAL ECONOMY PORTFOLIOS POSITIVE COEFFICIENT POSITIVE COEFFICIENTS PRIVATE INVESTMENT PRODUCTIVE INVESTMENT PROPERTY RIGHTS REAL EXCHANGE RATE REAL INTEREST REAL INTEREST RATE REGULATORY REGIME RETURNS RULE OF LAW STOCK MARKET STOCK MARKET CAPITALIZATION STOCKS SUBSTITUTION ELASTICITIES TAX TAX CREDITS TAX POLICY TAX RATES TAX STRUCTURE TAXATION THEORETICAL MODELS TRANSACTIONS COSTS WORLD DEVELOPMENT INDICATORS This paper considers institutional and structural factors associated with investment activity in a panel of up to 129 developed and developing countries. It introduces these factors to a standard neoclassical investment function for open economies, and find that financial development and institutional quality are reasonably robust determinants of cross-country capital formation, with latter displaying more stability in the sign and significance of its coefficient. Indeed, when endogeneity concerns are addressed more explicitly using external instruments, and both interactions and subsamples are considered, institutional quality tends to survive as the causal determinant of investment. 2013-10-02T21:40:51Z 2013-10-02T21:40:51Z 2013-09 http://documents.worldbank.org/curated/en/2013/09/18194268/institutional-structural-determinants-investment-worldwide http://hdl.handle.net/10986/16042 English en_US World Bank, Washington, DC;No. 6591 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	AFFILIATED ORGANIZATIONS ARBITRAGE BANK LENDING BANKING CRISES BANKING REGULATION BANKING SECTOR BANKING SYSTEMS BENCHMARK BOND BUSINESS CLIMATE BUSINESS ENVIRONMENT BUSINESS INVESTMENT BUSINESS REGULATION CAPITAL ACCOUNT CAPITAL ACCUMULATION CAPITAL FLOWS CAPITAL FORMATION CAPITAL MARKET CAPITAL MARKETS CAPITAL STOCK CAPITAL STRUCTURE CAPITAL THEORY COMMERCIAL CONTRACT COMPARATIVE ECONOMICS CONTRACT ENFORCEABILITY CONTRACT ENFORCEMENT CORPORATE DEBT CORPORATE TAX CORPORATE TAX RATE COST OF CAPITAL COUNTRY CAPITAL COUNTRY RISK CREDITOR CROSS-BORDER CAPITAL CURRENCY CURRENCY CRISES CURRENCY CRISIS CURRENT ACCOUNT DEFICITS DEBT DEBT FINANCING DEBTOR DEMOCRACY DEMOCRATIC ACCOUNTABILITY DERIVATIVE DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPING ECONOMIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DOMESTIC CREDIT DOMESTIC INTEREST RATE DOMESTIC INVESTMENT DOMESTIC INVESTORS DOMESTIC SAVING ECONOMETRIC ANALYSIS ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC COOPERATION ECONOMIC DEVELOPMENT ECONOMIC FACTORS ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC SIZE ECONOMIC STRUCTURE EMPIRICAL ANALYSIS EMPIRICAL STUDIES ENVIRONMENTS EQUITY MARKETS EXPLOITATION EXPORTS EXPROPRIATION FINANCIAL CONSTRAINTS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL OPENNESS FINANCIAL SECTOR FINANCIAL STRUCTURE FINANCIAL STRUCTURES FINANCIAL SUPPORT FINANCIAL SYSTEMS FINANCIALLY OPEN ECONOMIES FIXED CAPITAL FIXED INVESTMENT FOREIGN DIRECT INVESTMENT FOREIGN INVESTMENT FORMAL ANALYSIS FUTURE RESEARCH GDP GDP DEFLATOR GLOBAL CAPITAL GLOBAL CAPITAL MARKETS GLOBAL RISK GROSS DOMESTIC PRODUCT GROSS FIXED CAPITAL FORMATION GROWTH MODELS GROWTH RATE INCOME INDUSTRIAL COUNTRIES INFLATION INSTITUTIONAL ENVIRONMENT INSTRUMENT INTEREST RATE INTERNATIONAL BANK INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL FLOWS INTERNATIONAL ECONOMICS INTERNATIONAL INVESTMENT INVENTORY INVESTMENT ACTIVITY INVESTMENT BEHAVIOR INVESTMENT CLIMATE INVESTMENT DECISIONS INVESTMENT FINANCING INVESTMENT FUNCTION INVESTMENT INCENTIVES INVESTMENT OPPORTUNITIES INVESTMENT PATTERNS INVESTMENT RATE INVESTMENT RISK INVESTMENT SPENDING INVESTMENT TAX CREDITS INVESTMENT THEORY INVESTOR PROTECTION INVESTOR PROTECTIONS IRREVERSIBILITY LDCS LOANABLE FUNDS MACROECONOMIC LEVEL MACROECONOMIC MODELS MACROECONOMICS MARGINAL PRODUCT MARKET VALUE MATURITY MONETARY FUND MONETARY POLICY OPEN ECONOMIES OPEN ECONOMY ORGANIZATIONAL FORM OUTPUT POLITICAL ECONOMY PORTFOLIOS POSITIVE COEFFICIENT POSITIVE COEFFICIENTS PRIVATE INVESTMENT PRODUCTIVE INVESTMENT PROPERTY RIGHTS REAL EXCHANGE RATE REAL INTEREST REAL INTEREST RATE REGULATORY REGIME RETURNS RULE OF LAW STOCK MARKET STOCK MARKET CAPITALIZATION STOCKS SUBSTITUTION ELASTICITIES TAX TAX CREDITS TAX POLICY TAX RATES TAX STRUCTURE TAXATION THEORETICAL MODELS TRANSACTIONS COSTS WORLD DEVELOPMENT INDICATORS
spellingShingle	AFFILIATED ORGANIZATIONS ARBITRAGE BANK LENDING BANKING CRISES BANKING REGULATION BANKING SECTOR BANKING SYSTEMS BENCHMARK BOND BUSINESS CLIMATE BUSINESS ENVIRONMENT BUSINESS INVESTMENT BUSINESS REGULATION CAPITAL ACCOUNT CAPITAL ACCUMULATION CAPITAL FLOWS CAPITAL FORMATION CAPITAL MARKET CAPITAL MARKETS CAPITAL STOCK CAPITAL STRUCTURE CAPITAL THEORY COMMERCIAL CONTRACT COMPARATIVE ECONOMICS CONTRACT ENFORCEABILITY CONTRACT ENFORCEMENT CORPORATE DEBT CORPORATE TAX CORPORATE TAX RATE COST OF CAPITAL COUNTRY CAPITAL COUNTRY RISK CREDITOR CROSS-BORDER CAPITAL CURRENCY CURRENCY CRISES CURRENCY CRISIS CURRENT ACCOUNT DEFICITS DEBT DEBT FINANCING DEBTOR DEMOCRACY DEMOCRATIC ACCOUNTABILITY DERIVATIVE DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPING ECONOMIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DOMESTIC CREDIT DOMESTIC INTEREST RATE DOMESTIC INVESTMENT DOMESTIC INVESTORS DOMESTIC SAVING ECONOMETRIC ANALYSIS ECONOMETRICS ECONOMIC ACTIVITY ECONOMIC COOPERATION ECONOMIC DEVELOPMENT ECONOMIC FACTORS ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC SIZE ECONOMIC STRUCTURE EMPIRICAL ANALYSIS EMPIRICAL STUDIES ENVIRONMENTS EQUITY MARKETS EXPLOITATION EXPORTS EXPROPRIATION FINANCIAL CONSTRAINTS FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL OPENNESS FINANCIAL SECTOR FINANCIAL STRUCTURE FINANCIAL STRUCTURES FINANCIAL SUPPORT FINANCIAL SYSTEMS FINANCIALLY OPEN ECONOMIES FIXED CAPITAL FIXED INVESTMENT FOREIGN DIRECT INVESTMENT FOREIGN INVESTMENT FORMAL ANALYSIS FUTURE RESEARCH GDP GDP DEFLATOR GLOBAL CAPITAL GLOBAL CAPITAL MARKETS GLOBAL RISK GROSS DOMESTIC PRODUCT GROSS FIXED CAPITAL FORMATION GROWTH MODELS GROWTH RATE INCOME INDUSTRIAL COUNTRIES INFLATION INSTITUTIONAL ENVIRONMENT INSTRUMENT INTEREST RATE INTERNATIONAL BANK INTERNATIONAL CAPITAL INTERNATIONAL CAPITAL FLOWS INTERNATIONAL ECONOMICS INTERNATIONAL INVESTMENT INVENTORY INVESTMENT ACTIVITY INVESTMENT BEHAVIOR INVESTMENT CLIMATE INVESTMENT DECISIONS INVESTMENT FINANCING INVESTMENT FUNCTION INVESTMENT INCENTIVES INVESTMENT OPPORTUNITIES INVESTMENT PATTERNS INVESTMENT RATE INVESTMENT RISK INVESTMENT SPENDING INVESTMENT TAX CREDITS INVESTMENT THEORY INVESTOR PROTECTION INVESTOR PROTECTIONS IRREVERSIBILITY LDCS LOANABLE FUNDS MACROECONOMIC LEVEL MACROECONOMIC MODELS MACROECONOMICS MARGINAL PRODUCT MARKET VALUE MATURITY MONETARY FUND MONETARY POLICY OPEN ECONOMIES OPEN ECONOMY ORGANIZATIONAL FORM OUTPUT POLITICAL ECONOMY PORTFOLIOS POSITIVE COEFFICIENT POSITIVE COEFFICIENTS PRIVATE INVESTMENT PRODUCTIVE INVESTMENT PROPERTY RIGHTS REAL EXCHANGE RATE REAL INTEREST REAL INTEREST RATE REGULATORY REGIME RETURNS RULE OF LAW STOCK MARKET STOCK MARKET CAPITALIZATION STOCKS SUBSTITUTION ELASTICITIES TAX TAX CREDITS TAX POLICY TAX RATES TAX STRUCTURE TAXATION THEORETICAL MODELS TRANSACTIONS COSTS WORLD DEVELOPMENT INDICATORS Lim, Jamus Jerome Institutional and Structural Determinants of Investment Worldwide
relation	World Bank, Washington, DC;No. 6591
description	This paper considers institutional and structural factors associated with investment activity in a panel of up to 129 developed and developing countries. It introduces these factors to a standard neoclassical investment function for open economies, and find that financial development and institutional quality are reasonably robust determinants of cross-country capital formation, with latter displaying more stability in the sign and significance of its coefficient. Indeed, when endogeneity concerns are addressed more explicitly using external instruments, and both interactions and subsamples are considered, institutional quality tends to survive as the causal determinant of investment.
format	Publications & Research :: Policy Research Working Paper
author	Lim, Jamus Jerome
author_facet	Lim, Jamus Jerome
author_sort	Lim, Jamus Jerome
title	Institutional and Structural Determinants of Investment Worldwide
title_short	Institutional and Structural Determinants of Investment Worldwide
title_full	Institutional and Structural Determinants of Investment Worldwide
title_fullStr	Institutional and Structural Determinants of Investment Worldwide
title_full_unstemmed	Institutional and Structural Determinants of Investment Worldwide
title_sort	institutional and structural determinants of investment worldwide
publisher	World Bank, Washington, DC
publishDate	2013
url	http://documents.worldbank.org/curated/en/2013/09/18194268/institutional-structural-determinants-investment-worldwide http://hdl.handle.net/10986/16042
_version_	1764432063778258944

Institutional and Structural Determinants of Investment Worldwide

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