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Determinants of FDI in South Africa: Do macroeconomic variables matter?

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  • Dondashe, Nandipha
  • Phiri, Andrew

Abstract

In this study we examine the macroeconomic determinants of FDI for the South African economy using data collected between 1994 and 2016 using the ARDL model for cointegration. The specific macroeconomic determinants which are used in the study are per capita GDP, the inflation rate, government size, real interest rate variable, and terms of trade. With the exception of inflation the remaining macroeconomic determinants employed in the study are positively and significantly related with FDI. However, in the short-run all variables are positively and significantly correlated with FDI. Collectively, these results have important implications for policymakers.

Suggested Citation

  • Dondashe, Nandipha & Phiri, Andrew, 2018. "Determinants of FDI in South Africa: Do macroeconomic variables matter?," MPRA Paper 83636, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:83636
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    Cited by:

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    2. Seth Nana Kwame Appiah-Kubi & Karel Malec & Sandra Boatemaa Kutin & Mansoor Maitah & Michael Chanda Chiseni & Joseph Phiri & Zdeňka Gebeltová & Sylvie Kobzev Kotásková & Kamil Maitah, 2020. "Foreign Ownership in Sub-Saharan Africa: Do Governance Structures Matter?," Sustainability, MDPI, vol. 12(18), pages 1-15, September.
    3. Khamis Hamad Ali & Suleiman Malik Faki & Salim Hamad Suleiman, 2018. "Determinants of Foreign Direct Investment Inflows in Southern African Development Community (SADC) Member Countries," International Journal of Science and Business, IJSAB International, vol. 2(4), pages 616-623.
    4. Isiksal, Aliya Zhakanova & Assi, Ala Fathi, 2022. "Determinants of sustainable energy demand in the European economic area: Evidence from the PMG-ARDL model," Technological Forecasting and Social Change, Elsevier, vol. 183(C).
    5. Suna Sahin, 2021. "The Relationships between Foreign Direct Investment, Trade Openness, and Economic Growth: The Case of Selected Countries and Turkey," EKOIST Journal of Econometrics and Statistics, Istanbul University, Faculty of Economics, vol. 0(35), pages 111-128, December.

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    More about this item

    Keywords

    FDI; ARDL cointegration; Financial crisis; South Africa.;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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