Factor Affecting Private Investment Growth A Study On Ambo Town

Abstract

The aim of this study was to assess factors affecting private investment growth study on Ambo town. This study used both quantitative and qualitative research method to explain the objectives of study. The study used both primary and secondary sources of data. Primary data was collected 96 from distributed 98 questioner randomly selected respondents from different sectors. The collected data was analyzed using both descriptive and econometric analysis. The dependent variable for this study was private investment growth and independent variables was the mean value of infrastructural factors, administrative factors, sociocultural factors, legal factors, political factors, investor attitude, geographical factors and financial factors. Before running the model, the validity and reliability of the data was checked. In addition to this the data was checked for the existence of multicolinarity problem, normality, heteroskedacity problems and the result confirmed the absence of such problems in the data. The result of descriptive statistics shows that majority of the respondents (84.38%) were investing on service sector, 46.88% of private investors responded as Ambo town was attractive for investment, and availability of demand for product or service encouraged them to invest in the town. The result from multipl linear regression shows that infrastructural factors, sociocultural factors and political factors affected private investment growth in the town negatively and significantly at 1% significant level. Whereas administration related factors, geographical factors, and investor’s attitude significantly and positively affected private investment growth in Ambo town. This study suggests that more attention should be given to better improvement of infrastructural problems and other factors that hinder the growth of investment in order to enhance the growth of private investment in Ambo town specifically and in Ethiopia in general.