Privatization and Capital Accumulation: Empirical Evidences from Ethiopia

African Journal of Economic Policy, Vol.12, No.1, 2005

26 Pages Posted: 7 May 2007 Last revised: 12 Apr 2016

See all articles by Jesiah Selvam

Jesiah Selvam

affiliation not provided to SSRN

Meenakshi

affiliation not provided to SSRN

T. Iyappan

affiliation not provided to SSRN

Abstract

This paper examines the connectivity between privatization and private capital accumulation. Many previous studies have proved that privatization has had a direct and positive effect on capital accumulation through attracting private investment. Ethiopia, which is one of the least developed countries (LDCs), and having spent a two decades of communism, has implemented privatization programme as a means of attracting a sizable investment including the foreign direct investment (FDI). We used data over ten years, 1994/95-2003/04, and applied correlation and regression analyses to find out the effect of the Ethiopian privatization programme on capital accumulation. The empirical results show that privatization was insignificant to capital accumulation. We suggest that the country needs to improve economic and political stability and openness coupled with re-vitalizing the privatization programme to prevent the Ethiopian economy from the further capital sabotage.

Keywords: Privatization, capital accumulation, FDI, economic integration, private investment

JEL Classification: E22, F15, F21, L33

Suggested Citation

Jesiah, Selvam and Sundararajan, Meenakshi and Iyappan, T., Privatization and Capital Accumulation: Empirical Evidences from Ethiopia. African Journal of Economic Policy, Vol.12, No.1, 2005. Available at SSRN: https://ssrn.com/abstract=984381

Selvam Jesiah (Contact Author)

affiliation not provided to SSRN

Meenakshi Sundararajan

affiliation not provided to SSRN ( email )

No Address Available

T. Iyappan

affiliation not provided to SSRN

No Address Available

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