Imports of capital goods and machinery and labour force as determinants of investment in the public manufacturing sector

Abstract EN

Many studies and empirical literature on investment have shown some important variables affecting domestic investment.

This study aimed to identify the relationship between domestic investment in the public manufacturing sector in the Libyan economy on one hand, and imports of capital & machinery and labour force on other hand during the period (1962-2010).

Properties of time series of the model variables have been analyzed by using several tests for determining the integration level of each time series separately.

By using the Johansen-Juselius cointegration method, the results showed the significance of the impact of imports of machinery and capital goods on domestic investment in the public manufacturing sector, the results of these tests revealed an equilibrium relationship between domestic investment in the public manufacturing sector and its determinants in the long and short-run.