The Influence of Past Investments and Macroeconomic Factors on Current Non-Financial Investments

Abstract

This research investigates the determinants of economic growth in a developing country context, utilizing secondary data from the World Bank spanning 1972 to 2016. The ARDL (Autoregressive Distributed Lag) estimation technique is employed to analyze the relationships between net investment in non-financial assets, GDP per capita growth, taxes on income, profits, and capital gains, and economic growth. The findings reveal that all three independent variables exert a positive and statistically significant impact on economic growth. In simpler terms, the study suggests that increasing investments in nonfinancial assets, achieving higher GDP per capita growth rates, and implementing effective taxes on income, profits, and capital gains can all contribute positively to economic expansion in developing countries.