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Impact of export earnings fluctuation on capital formation: evidence from four SADC countries

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  • Peter Karungu
  • Yohane Khamfula

Abstract

This study attempts to empirically explore the association between export earnings fluctuation and capital formation in the following four Southern African Development Community (SADC) countries: Botswana, Mozambique, Zambia and Zimbabwe. Using cointegration and error correction models, the results of the study reveal that in the long run export earnings fluctuation positively and significantly influences capital formation in Zambia only. In the rest of the countries under study, export earnings fluctuation has an insignificant influence on capital formation. In the short run, changes in this main variable of interest (export earnings fluctuation) do not influence the adjustment process of capital formation towards its long-run equilibrium.

Suggested Citation

  • Peter Karungu & Yohane Khamfula, 2004. "Impact of export earnings fluctuation on capital formation: evidence from four SADC countries," Applied Financial Economics, Taylor & Francis Journals, vol. 14(15), pages 1097-1103.
    • Handle: RePEc:taf:apfiec:v:14:y:2004:i:15:p:1097-1103
    DOI: 10.1080/09603100412331297685
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