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Does Corruption Hampers Inward FDI in South Africa from other African Countries?

Author

Listed:
  • Mosikari, Teboho J.

    (Department of Economics, North-West University, South Africa)

  • Nthebe, Tselane C.

    (Department of Economics, North-West University, South Africa)

  • Eita, Joel H.

    (School of Economics, College of Business and Economics, University of Johannesburg, South Africa)

Abstract

The purpose of this paper is to investigate the relationship between corruption and FDI inflows from other African countries to South Africa. The study uses gravity model and employs panel data econometric technique such as pooled, fixed and random effects model. The results indicate that there is a significant negative relationship between South African corruption and FDI inflows from other African countries to South Africa. This implies that policy makers in South Africa should implement measures to curb corruption. This will help in attracting FDI inflows from other African countries and encourage the creation of job opportunities. La corruzione limita il flusso degli investimenti diretti esteri dagli altri paesi africani verso il Sud Africa? Un’analisi gravitazionale Il fine di questo studio è analizzare la relazione tra corruzione e investimenti diretti esteri dagli altri paesi africani verso il Sud Africa. Viene utilizzato il modello gravitazionale e si utilizzano tecniche econometriche su dati panel, quali il modello pooled, a effetti fissi e random. I risultati indicano che c’è una relazione significativamente negativa tra la corruzione in Sud Africa e i flussi degli investimenti diretti esteri dagli altri paesi africani verso il Sud Africa. Ciò implica che i governi di questo paese dovrebbero implementare misure atte a combattere la corruzione. In questo modo si attirerebbero flussi di investimenti da altri paesi africani e si stimolerebbe la creazione di opportunità di lavoro.

Suggested Citation

  • Mosikari, Teboho J. & Nthebe, Tselane C. & Eita, Joel H., 2019. "Does Corruption Hampers Inward FDI in South Africa from other African Countries?," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 72(4), pages 513-534.
    • Handle: RePEc:ris:ecoint:0859
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    References listed on IDEAS

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    Cited by:

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    2. Mbanda, Vandudzai & Bonga-Bonga, Lumengo, 2023. "Municipal Infrastructure Spending Capacity in South Africa: A Panel Smooth Transition Regression Approach," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 76(1), pages 41-64.
    3. NGEPAH, NICHOLAS & EITA , JOEL HINAUNYE & BIYASE , MDUDUZI & Saba, Charles, 2023. "The Effect of Transnet's Capital Expenditure and Investment in Various other Selected Sectors of the South African Economy," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 76(1), pages 65-90.
    4. Imtiaz Arif & Lubna Khan & Sundus Waqar, 2023. "Does Corruption Sand or Grease the Wheels? A Case of BRICS Countries," Global Business Review, International Management Institute, vol. 24(6), pages 1468-1481, December.

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    More about this item

    Keywords

    Corruption; FDI Inflows; Panel Gravity Model;
    All these keywords.

    JEL classification:

    • B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General
    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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