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This paper studies the relationship between public investment and private investment in a sample of 21 Organization for Economic Cooperation and Development (OECD) countries between 2000 and 2019. Using panel data nonlinear threshold regression models, the empirical results show that there exist threshold levels for the share of public investment in private investment, the real Gross Domestic Product (GDP) growth rate and the real interest rate that affect the relationship between public and private investment. All estimates support a crowding‐in effect of public investment on private investment. In terms of policy prescriptions, by increasing public investment, OECD governments can expect positive spillovers to private investment. [ABSTRACT FROM AUTHOR]

Studies have shown that external capital account liberalisation can boost capital inflows and augment economic development. Nevertheless, in the case of developing and emerging economies (DEE), adverse currency fluctuations could hamper external competitiveness due to relative price differences creating currency overvaluation, which might not be mitigated via financial openness alone. Therefore, this paper uses annual panel data for 35 DEEs over 40 years to explore whether financial openness of countries can help preserve their external price competitiveness, in the presence of greater trade openness and better institutional quality. Our findings suggest that financial openness alone does not aid export competitiveness, unless it is supported by greater trade openness. In addition, both cross country and regional analyses show that financial openness can benefit economies in maintaining their export competitiveness if they have stronger quality of institutions. Our results remain robust when we estimate the role of financial openness and institutional quality jointly on external competitiveness across regions, and during the pre‐ and post‐crisis periods. We conclude that financial openness alone is not sufficient to improve external competitiveness of an emerging economy, but it does help in the presence of greater trade openness or better institutions, enabling reduction in trade costs and thereby making these countries more price‐competitive. [ABSTRACT FROM AUTHOR]