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On the Nature of the Causal Relationships Between Foreign Direct Investment, GDP and Exports in South Africa

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  • William Akoto

Abstract

What started as a financial crisis in 2008–2009 quickly became a crisis of trade for many emerging economies. Using South Africa as a case study, this paper examines the Granger causal relationships between foreign direct investment (FDI), exports and GDP as well as the responsiveness of exports to FDI shocks. The findings indicate that in the long run, FDI has a significant impact on boosting exports. In the short run, there is bi‐directional Granger causality between GDP and exports, with uni‐directional causality from FDI to exports and FDI to GDP. However, variance decomposition analyses shows that exports are not very responsive to changes in FDI inflow. Copyright © 2012 John Wiley & Sons, Ltd.

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  • William Akoto, 2016. "On the Nature of the Causal Relationships Between Foreign Direct Investment, GDP and Exports in South Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 28(1), pages 112-126, January.
    • Handle: RePEc:wly:jintdv:v:28:y:2016:i:1:p:112-126
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    File URL: http://hdl.handle.net/10.1002/jid.2892
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    Cited by:

    1. Hassan Sallahuddin, 2018. "Fdi Oriented Exports And Role Of Free Industrial Zones In Malaysia," Post-Print hal-03455842, HAL.
    2. N.M. Odhiambo, 2021. "Foreign Direct Investment and Economic Growth in Kenya: An Empirical Investigation," Working Papers AESRI-2021-04, African Economic and Social Research Institute (AESRI), revised Jan 2021.
    3. Nicholas M. Odhiambo, 2022. "Foreign Direct Investment and Economic Growth in Kenya: An Empirical Investigation," International Journal of Public Administration, Taylor & Francis Journals, vol. 45(8), pages 620-631, June.
    4. Mahmudul Islam, 2024. "Exploring the Long-Term Relationship between Foreign Direct Investment and GDP: Empirical Insights from Bangladesh," International Journal of Science and Business, IJSAB International, vol. 34(1), pages 1-12.
    5. NPG Samantha & Liu Haiyun, 2018. "Does Inward Foreign Direct Investment Promote Export? Empirical Evidence from Sri Lanka," Business and Economic Research, Macrothink Institute, vol. 8(3), pages 1-18, September.
    6. Radovan Kastratović, 2020. "The impact of foreign direct investment on host country exports: A meta‐analysis," The World Economy, Wiley Blackwell, vol. 43(12), pages 3142-3183, December.

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