Impact of Japanese Foreign Direct Investment on the Economic Growth of South Africa

2018 ◽  
Vol 5 (4) ◽  
pp. 1-8
Author(s):  
Njangang Henri
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Foreign Direct Investment ◽  
Direct Investment

scholarly journals An Investigation of the Dynamic Effect of Foreign Direct Investment (FDI) and Interest Rates on GDP in South Africa

2018 ◽  
Vol 10 (5(J)) ◽  
pp. 29-37
Author(s):  
Thomas Habanabakize ◽  
Daniel F Meyer
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Foreign Direct Investment ◽  
South African ◽  
Significant Relationship ◽  
Direct Investment ◽  
Positive Relationship ◽  
Positive Impact ◽  
Long Run ◽  
Repo Rate

Economic growth in South Africa has been in the “doldrums” for the past decade. If well managed, foreign direct investment (FDI) and repo rate (interest rate) could have a positive impact and assist in rapid economic growth so urgently needed in South Africa. FDI has been a driving force for growth in many developing economies. Not enough has been done to attract FDI in South Africa. The country has enormous ability and capacity to attract FDI inflows and to have the advantages from it. A quantitative research approach was used to analyse the association amongst the variables which include FDI, GDP and repo rate in the South African economy. The South African Reserve Bank database was used and the period analysed is from 2000 to 2016. Statistical and econometric methods such as correlation analysis, unit root tests, ARDL Bounds test for cointegration, an error correction model (ECM), and the Granger causality tests were used. Subsequently, after the econometric model was estimated, findings indicated the existence of a long-run relationship between the three variables. While, a significant positive relationship exists between FDI and GDP, a negative long-run relationship was found between GDP and repo rate and interestingly a nonsignificant relationship between repo rate and FDI. In the short run, the positive effect of FDI on GDP is minimal whilst a significant and positive relationship exists between GDP and repo rate. The results did also show some limitations in the results, with regards to FDI and repo rate that there is no significant relationship between the variables, meaning that repo rate does not have an impact on FDIs. Although some long-run evidence was found of FDI playing a role in economic growth in South Africa, such impact is limited. Also very interesting is that the repo rate and FDI do not have a statistically significant relationship. This could be due to the rising risks associated with investments in the country. In conclusion, there are many variables which could have a positive impact on the attraction of FDIs and such factors will be explored further in future studies. 

scholarly journals Impact of foreign direct investment on economic growth in Africa

2016 ◽  
Vol 14 (2) ◽  
pp. 289-297 ◽  
Author(s):  
Olawumi D. Awolusi ◽  
Olufemi P. Adeyeye
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Human Capital ◽  
Foreign Direct Investment ◽  
Technology Transfer ◽  
Direct Investment ◽  
Central African Republic ◽  
Capital Formation ◽  
International Technology Transfer ◽  
African Countries

Several studies have been conducted to examine the influence of foreign direct investment (FDI) inflow on economic growth. Indeed, the overall evidence is best characterized as mixed. This paper investigates the effect of FDI on economic growth in some randomly selected African economies from 1980 to 2013, using a modified growth model by Agrawal and Khan (2011). This model consists of Gross Domestic Product, Human Capital, International Technology Transfer, Labor Force, FDI and Gross Capital Formation (GCF). Ordinary least squares and generalized method of moments were used as the estimation techniques. Of all the results, only Gross Capital Formation, Human Capital, and International Technology Transfer in the Central African Republic were found not to have any statistically significant influence on economic growth. In general, the impact of FDI on economic growth in African countries is limited or negligible. Consequently, this study observes that a 1% increase in FDI would result in a 0.12% increase in GDP for South Africa, a 0.05% increase in Egypt, a 0.03% increase in Nigeria, a 0.02% increase in Kenya, and a 1% increase in GDP in the Central African Republic. The findings also reveal that South Africa’s growth is more affected by FDI than the other four countries. The study also provides possible reasons behind South Africa’s great show of FDI and the lessons other African countries could learn from South Africa better utilization of FDI. This study integrates the related drivers of the effectiveness and success of FDI

scholarly journals INFLUENCE OF FINANCIAL INSTABILITY AND ECONOMIC GROWTH IN FOREIGN DIRECT INVESTMENT IN SOUTH AFRICA

2021 ◽  
pp. 25-31
Author(s):  
Badamasi Sani Mohammed ◽  
Sadun Naser Yassin Alheety ◽  
Zakarya Mohsen Al-Hodiany
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Foreign Direct Investment ◽  
Direct Investment ◽  
Financial Instability ◽  
Positive Contribution ◽  
Long Run ◽  
Prime Objective ◽  
The Impact ◽  
Bound Test

The prime objective of this paper is to study the impact of financial instability (FI) and economic growth (RGDPP) on foreign direct investment (FDI) in South Africa from 1970 to 2016 using Autoregressive Distributive Lag (ARDL) approach. Evidence from bound test reveals that FI, RGDPP, and FDI are cointegrated in the long run. Moreover, the result shows that financial instability and economic growth are positively significant and negatively insignificant influencing the foreign direct investment respectively. The study suggests that government should necessarily develop financial system to let economic growth make a positive contribution to foreign direct investment. KEYWORDS: financial Instability (FI); Economic growth (RGDPP); foreign direct Investment (FDI); Autoregressive Distributive Lag (ARDL)

scholarly journals Relationship between Real Exchange Rate and Economic Growth: the case of South Africa

2018 ◽  
Vol 10 (1) ◽  
pp. 146
Author(s):  
Deeviya Patel ◽  
Gisele Mah
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Foreign Direct Investment ◽  
Exchange Rate ◽  
Real Exchange Rate ◽  
Granger Causality ◽  
Money Supply ◽  
Significant Relationship ◽  
Direct Investment ◽  
Variance Decomposition

The objective of this study was to investigate the relationship between real exchange rate and economic growth in South Africa. Using time series data, the period from 1980 to 2015 was covered in the study. Data was collected from the South African Reserve Bank, the International Monetary Fund and International Financial Statistics. The Johansen cointegration and the Vector Error Correction Model estimation techniques were employed in the study, followed by VEC Granger causality test, variance decomposition and impulse response function. The long-run results revealed a negative and significant relationship between real exchange rate with export and economic growth. On the other hand, money supply and foreign direct investment have a positive and significant relationship with real exchange rate. Only export was significant and positively related to real exchange rate in the short-run.  Results of granger causality showed that only export granger causes real exchange rate thus, a unidirectional causality exists between export and real exchange rate. Results of variance decomposition revealed that the real exchange rate is highly affected by shocks from economic growth. The impulse response functions showed that real exchange rate responds positively to shocks from real exchange rate and money supply. On the contrary, real exchange rate responds negatively to a shock from economic growth. There is, therefore, a need to increase exports, money supply, foreign direct investment and economic growth as these would lead to an increase in the Rand and consequently, appreciation of the Rand.  

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