Linkages between Public Investment, Private Investment and Economic Growth in Syria

This study attempts to investigate the role of public and private sector investment in the Syrian economy over the period 1970-2010. The cointegration test indicates that GDP is positively and significantly related to the public and private sector investment. The Granger causality test indicates unidirectional short-run causality relationship running from GDP to public investment, and bidirectional short-run causality relationships between private investment and GDP. There are also bidirectional long-run causality relationships between public investment, private investment and GDP. The study result indicates that public sector investment has the biggest effect on the GDP, thus the Syrian government should maintain the important role of the public sector, as well as improving the private sector investment.