Publication Date


Document Type


First Advisor

Polansky, Alan M.

Degree Name

M.S. (Master of Science)

Legacy Department

Department of Statistics and Actuarial Science


This paper aims to study the impact of public and private investments on the economic growth of developing countries. The study uses panel data from 39 developing countries covering the periods 1990-2019. The study is based on the neoclassical growth models or exogenous growth models in which land, labor, capital accumulation, etc., and technology proved substantial for economic growth. The paper uses the impact on overall GDP growth and GDP per capita growth. The study used a mixed-effect regression model and a Bayesian logistic regression model to derive the findings. For private investments, domestic credit has a positive association, but foreign direct investment is negatively correlated with economic growth. Public investment has a strong and more positive impact on economic growth than private investment. Public capital formation, labor growth, and government consumption expenditure were significant in explaining the economic growth. Overall, both public and private investments are substantial for developing countries' economic growth and development.


53 pages




Northern Illinois University

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