The Macroeconomics of South African Economic Growth

2021 ◽  
pp. 890-912
Author(s):  
Philippe Burger
Keyword(s):  
Economic Growth ◽  
Growth Performance ◽  
South African ◽  
Factor Productivity ◽  
Human Capital Development ◽  
Private Sector Investment ◽  
Lower Productivity ◽  
Low Levels ◽  
Capital Development ◽  
Intensive Growth

Abstract: Covering the period 1994 to 2019, this chapter shows that between 1994 and 2008 South Africa’s growth performance improved and that this improvement was to a large extent driven by an improvement in total factor productivity (TFP). However, since 2008 South Africa’s growth performance has deteriorated significantly. The chapter shows that the deteriorating growth performance was accompanied by the deterioration of TFP, and argues that lower private-sector investment levels, combined with low levels of human capital development and a lack of international competitiveness, constitute the causes of lower productivity and economic growth. This chapter also explores the various growth policies put forward since the mid-1990s to improve economic growth. These include labour-intensive growth, export-driven growth, and investment-driven growth. The chapter argues that the implementation of a well-designed combination of these policies will be needed to attain higher levels of economic growth.

scholarly journals The Dynamics of Foreign Direct Investment in BRICS Countries

2017 ◽  
Vol 9 (3(J)) ◽  
pp. 101-112
Author(s):  
Kunofiwa Tsaurai
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Foreign Direct Investment ◽  
Financial Development ◽  
Direct Investment ◽  
Fixed Effects ◽  
Trade Openness ◽  
Human Capital Development ◽  
Brics Countries ◽  
Capital Development

Recent studies which investigated the determinants of foreign direct investment (FDI) in BRICS include Hsin-Hong and Shou-Ronne (2012), Nandi (2012), Jadhav (2012), Darzini and Amirmojahedi (2013), Nischith (2013), Ho et al. (2013), Kaur et al. (2013) and Priya and Archana (2014). The findings from these studies shows lack of consensus and confirm that a list of agreeable determinants of FDI in BRICS countries is still an unsettled matter. This paper was therefore initiated in order to contribute to the debate on the discourse on FDI determinants in BRICS countries.This paper deviates from earlier similar studies in five ways: (1) uses most recent data, (2) is the first to investigate whether a combination of financial development, trade openness, human capital, economic growth and inflation influence FDI in BRICS countries, (3) uses different proxies of the variables that affect FDI, (4) employed both fixed effects and pooled ordinary least squares (OLS) approaches and (5) used a stacked data approach.The results of the study showed that economic growth, trade openness and exchange rate stability positively impacted on FDI, financial development positively influenced FDI under fixed effects, FDI was positively influenced by human capital development using the pooled OLS and inflation negatively affected FDI in line with literature. Taking into account these findings, this study urges BRICS to implement policies that increase financial sector efficiency and economic growth, maintain stable exchange rates, keep inflation rates at lower levels, enhance trade openness and human capital development in order to increase FDI inflows.

scholarly journals Institutions, Macroeconomic Policies and Economic Growth in Africa: Evidence from Panel Data

2019 ◽  
Vol 5 (2) ◽  
pp. 112
Author(s):  
Haruna M. Aliero ◽  
Muftau Olaiya Olarinde
Keyword(s):  
Economic Growth ◽  
Growth Performance ◽  
Panel Cointegration ◽  
Growth Strategy ◽  
African Countries ◽  
Macroeconomic Policies ◽  
Long Run ◽  
Short Run ◽  
Capital Development ◽  
Poor Management

This study investigates the effects of institution and macroeconomic policy on economic growth in Africa, using panel Cointegration technique to analysed data obtained from a panel  of 50 African Countries covering a period of 25years (1990-2014). The results confirm that declining growth rate in Africa is due to poor management of macroeconomic policies. A weak turning point is also confirmed to exist for government size in the short run; in the long run it becomes more pronounce. The Wald restrictions tests of causality ascertain that institutions lead economic growth performance in the short run, while poor economic growth performance impaired the capacity required in building strong institutions which in turn stunts growth in the long run. Therefore, African leaders should tilt their expenditure in favour of human capital development and strong institution, ensure intra-regional trade and adopt private sector led – economic growth strategy.

scholarly journals Sources of Economic Growth in Zambia: An Empirical Investigation

2017 ◽  
Vol 18 (2) ◽  
pp. 275-290 ◽  
Author(s):  
Themba G. Chirwa ◽  
Nicholas M. Odhiambo
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
International Trade ◽  
Foreign Aid ◽  
Development Aid ◽  
Human Capital Development ◽  
Long Run ◽  
Short Run ◽  
Capital Development ◽  
Macroeconomic Determinants

In this article, the key macroeconomic determinants of economic growth in Zambia are investigated using the autoregressive distributed lag (ARDL) bounds testing approach. The study has been motivated by the unsustainable growth trends that Zambia has been experiencing in recent years. Our study finds that the key macroeconomic determinants that are significantly associated with economic growth in Zambia include, amongst others, investment, human capital development, government consumption, international trade and foreign aid. The study’s results reveal that in the short run, investment and human capital development are positively associated with economic growth, while government consumption, international trade and foreign aid are negatively associated with economic growth. However, in the long run, the study finds investment and human capital development to be positively associated with economic growth, while only foreign aid is negatively associated with economic growth. These results have significant policy implications. They imply that short–run economic policies should focus on creating incentives that attract investment and increase the quality of education, the effectiveness of government institutions, the promotion of international trade reforms and the effectiveness of development aid. In the long run, development strategies should focus on attracting the accumulation of long-term investment, improving the quality of education and the effectiveness of development aid.

scholarly journals Trade Openness and Economic Growth in Malaysia

2017 ◽  
Vol 52 (3) ◽  
pp. 157-170 ◽  
Author(s):  
Keshmeer Makun
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Trade Openness ◽  
Decision Makers ◽  
Economic Policies ◽  
Human Capital Development ◽  
Full Benefit ◽  
Capital Development ◽  
Positive Effect ◽  
Econometric Technique

This study is an attempt to examine the effects of trade openness along with two other conditioning variables on economic growth in Malaysia by applying time-series econometric technique. LSE-Henry’s general to specific approach results show significant positive effect of trade openness on growth. Human capital and good economic policies tested with an interaction term increases the growth effects of trade openness. The addition of these variables and findings are significant statistically and robust to different specifications. On the basis of the findings, it is concluded that while trade openness enhance growth, decision makers should also focus on human capital development. In addition, decision makers should ensure good economic policies to take full benefit of trade openness.

scholarly journals The Effects of Foreign Resource Inflow and Savings on the Economic Growth of South Africa: A VAR Analysis

2014 ◽  
Vol 6 (3) ◽  
pp. 232-241
Author(s):  
Temitope L. A.
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
South African ◽  
Impulse Response Function ◽  
Vector Autoregressive ◽  
Var Analysis ◽  
Long Run ◽  
Domestic Savings ◽  
Low Levels ◽  
Using Data

This study adopts both the Vector Autoregressive (VAR) analysis and the Impulse-Response Function (IRF) to examine the importance and the effects of domestic savings and foreign direct investment (FDI) on South African economy, using data spanning over the period 1975 to 2011. While the level of domestic savings is quite low, compared to other emerging economies, South Africa has also been struggling to attract inflow of foreign resources. The form of savings in South Africa is different from the western way of savings; hence the low levels of domestic savings. The variables considered were tested for stationarity and they were all stationary before proceeding to test for cointegration and then estimate and VAR. The cointegration test revealed that there was at least one cointegrating equation; which signifies that there exists a long-run relationship among the variables. The results from the VAR Granger test of causality depicted that domestic savings lead economic growth, while economic growth leads investment. This result of the IRF also showed that while increased domestic savings is important to improve the level of economic growth in South Africa, it also leads FDI. This means that the economic environment needs to be suitable in order to attract foreign investments. The results obtained are reliable and stable as the model passes a battery of diagnostic tests. The study proposes some recommendations for policy.

scholarly journals Selected macroeconomic determinants and economic growth in Cameroon (1970–2018) “dead or alive” an ARDL approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Kesuh Jude Thaddeus ◽  
Chi Aloysius Ngong ◽  
Njimukala Moses Nebong ◽  
Akume Daniel Akume ◽  
Jumbo Urie Eleazar ◽  
...  
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Government Expenditure ◽  
Human Capital Development ◽  
Content Type ◽  
Capital Development ◽  
Macroeconomic Determinants ◽  
The Impact

PurposeThe purpose of this paper is to examine key macroeconomic determinants on Cameroon's economic growth from 1970 to 2018.Design/methodology/approachData were obtained from the World Development Indicators and applied on time series data econometric techniques. The auto-regressive distributed lag (ARDL) bounds model analyzed the data since the variables had different order of integration.FindingsThe results showed long and short runs’ positive and significant connection between economic growth in Cameroon and government expenditure; trade openness, gross capital formation and exchange rate. Human capital development, foreign aid, money supply, inflation and foreign direct investment negatively and significantly affected economic growth in the short and long-runs. Hence, the macroeconomic indicators are not death.Research limitations/implicationsThe present research paper has tried to capture the impact of nine macroeconomic determinants on economic growth such as the government expenditure (LNGOVEXP), human capital development (LNHCD), foreign aids (AID), trade openness (LNTOP), foreign direct investment (LNFDI), gross capital formation (INVEST), broad money (LNM2), official exchange rate (LNEXHRATE) and Inflation (LNINFLA). However, these variables have the tendency to affect each other in a unidirectional or bidirectional manner. Further, the present research paper is unable to capture the impact of other macroeconomic variable due to the unavailability of data.Practical implicationsThe study recommends that Cameroon should use proper planning and strategic policy interventions to achieve higher sustainable economic growth with human capital development, foreign aid, money supply, foreign direct investment and moderate inflation.Social implicationsMacroeconomic indicators, if managed well, increase economic growth.Originality/valueThis paper to the best of the researcher's knowledge presents new background information to both policymakers and researchers on the main macroeconomic determinants using econometric analysis.

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