The Effect of Foreign Direct Investment on Economic Growth: Evidence from South Africa

Mazenda, Adrino

doi:10.5901/mjss.2014.v5n10p95

Cited by 12 publications

(14 citation statements)

References 42 publications

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“…As can be observed, the OLS estimates indicate a surprisingly negative and significant coefficient on FDI and yet a produces a positive and significant coefficient on domestic investment. Note that these results concur with that obtained from the study of Mazenda (2014) for South Africa and Rahman (2015) for Bangladesh, albeit using different econometric techniques. Other results reported in Table 1 include a correct negative yet insignificant coefficient on inflation, a negative and insignificant coefficient on population and a negative and significant coefficient on terms of trade.…”

Section: Qar Regression Estimation Resultssupporting

confidence: 89%

“…We also present a review of studies for South Africa and we consider this important as these studies are more closely related to our current study. To the best of our knowledge, the works of Fedderke and Romm (2006), Sridharam et al 2009, Masipa (2014), Mazenda (2014), Agrawal (2015), Sakyi and Egyir (2017) and Sunde (2017) suffice as an exhaustive list of previous empirical studies conducted on the South African economy using econometric techniques.…”

Section: Previous South African Studiesmentioning

confidence: 99%

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The FDI-Growth Nexus in South Africa: A Re-Examination Using Quantile Regression Approach

Khobai

Hamman

Mkhombo

et al. 2018

Studia Universitatis Babes-Bolyai Oeconomica

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This study sought to contribute to the growing empirical literature by investigating the effects of FDI on per capita GDP growth for South Africa using time series data collected between 1970 and 2016. Compared to the majority of previous studies, we use quantile regressions which investigates the effects of FDI on economic growth at different distributional quantiles. Puzzling enough, the empirical results show that FDI has a negative influence on welfare at extremely low quantiles whereas at other levels this effect turns insignificant. Contrary, the effects of domestic investment on welfare is positive and significant at all levels. Collectively, these results have important implications for policymakers in South Africa.

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Section: Qar Regression Estimation Resultssupporting

confidence: 89%

Section: Previous South African Studiesmentioning

confidence: 99%

The FDI-Growth Nexus in South Africa: A Re-Examination Using Quantile Regression Approach

Khobai

Hamman

Mkhombo

et al. 2018

Studia Universitatis Babes-Bolyai Oeconomica

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“…He found that FDI inflows contributed negatively to total productivity and thus economic growth. This was mirrored by Mazenda's (2014) study on South Africa for the period 1960-2002.…”

Section: On the Negative Relationship Between Foreign Directmentioning

confidence: 82%

Evidence for Gross Domestic Product growth time delay dependence over Foreign Direct Investment. A time-lag dependent correlation study

Ausloos

Eskandary

Kaur

et al. 2019

Physica A: Statistical Mechanics and its Applications

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This paper considers an often forgotten relationship, the time delay between a cause and its effect in economies and finance. We treat the case of Foreign Direct Investment (FDI) and economic growth, -measured through a country Gross Domestic Product (GDP). The pertinent data refers to 43 countries, over 1970-2015, -for a total of 4278 observations. When countries are grouped according to the Inequality-Adjusted Human Development Index (IHDI), it is found that a time lag dependence effect exists in FDI-GDP correlations. This is established through a time-dependent Pearson 's product-moment correlation coefficient matrix. Moreover, such a Pearson correlation coefficient is observed to evolve 1 arXiv:1905.01617v1 [q-fin.GN] 5 May 2019 from positive to negative values depending on the IHDI, from low to high. It is "politically and policy "relevant" that the correlation is statistically significant providing the time lag is less than 3 years. A "rank-size" law is demonstrated. It is recommended to reconsider such a time lag effect when discussing previous analyses whence conclusions on international business, and thereafter on forecasting.

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“…In addition, their study also observed a crowd-out of domestic investment from FDI -although this impact is restricted in the short-run (Mazenda, 2014). In a similar study, Sridharan, Vijayakumar and Chandra (2009) also studied the causal relationship between FDI and growth in the BRICS countries, using quarterly data from 1999 to 2007 for China, from 1992 to 2007 for India, and from 1990 to 2007 for South Africa (Mazenda, 2014). The results showed bi-directional relationships between FDI and growth for South Africa, while only a unidirectional relationship was observed for China and India.…”

Section: Foreign Direct Investment (Fdi) and International Trade In Amentioning

confidence: 92%

“…Confirming the positive spill-over from FDI and trade on output using aggregated time-series data in South Africa, Fedderke and Romm (2004) also confirmed the positive influence of FDI on growth from 1960 to 2002. In addition, their study also observed a crowd-out of domestic investment from FDI -although this impact is restricted in the short-run (Mazenda, 2014). In a similar study, Sridharan, Vijayakumar and Chandra (2009) also studied the causal relationship between FDI and growth in the BRICS countries, using quarterly data from 1999 to 2007 for China, from 1992 to 2007 for India, and from 1990 to 2007 for South Africa (Mazenda, 2014).…”

Section: Foreign Direct Investment (Fdi) and International Trade In Amentioning

confidence: 93%

International Trade, Foreign Direct Investment (FDI) and International Technology Transfer: A Comparative Study of Asian and African Economies

Awolusi

Fayomi

Ganiyu

2017

JEBS

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This paper investigates the long-run equilibrium relationships and short-term effect of international trade and Foreign Direct Investment (FDI) on international technology transfers in selected African and Asian countries from 1980 to 2013.The Johansen and Juselius multivariate co-integration technique and the granger causality test was used to test these relationships. The findings confirmed the presence of co-integrating vectors in the models of these countries. The outcome of the test posits short-run causal relationships, which run either bidirectionally or unidirectionally in all the variables for the selected countries. However, the most interesting lesson for many developing countries in Africa and Asia is that this study confirmed that international technology transfers supported domestic investment, economic growth, exports and imports of goods and services in some of these countries. Finally, all the variables in each model adjusted to equilibrium in the long-run, except for domestic investment in the Malaysian, Nigerian and Indian systems. The study thereby suggests an improved government policies and regulatory framework to improve international technology transfers, domestic investment, economic growth, and exports and imports of goods and services.Keywords: International Technology Transfer, Foreign Direct Investment, Trade, Vector Error Correction Modeling, Africa, Asia

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The Effect of Foreign Direct Investment on Economic Growth: Evidence from South Africa

Abstract: Foreign direct investment amongst other mechanisms provides capital inflow

Cited by 12 publications

References 42 publications

The FDI-Growth Nexus in South Africa: A Re-Examination Using Quantile Regression Approach

The FDI-Growth Nexus in South Africa: A Re-Examination Using Quantile Regression Approach

Evidence for Gross Domestic Product growth time delay dependence over Foreign Direct Investment. A time-lag dependent correlation study

International Trade, Foreign Direct Investment (FDI) and International Technology Transfer: A Comparative Study of Asian and African Economies

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