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The FDI-growth nexus in South Africa: A re-examination using quantile regression approach

Author

Listed:
  • Hlalefang Khobai

    (Department of Economics, Nelson Mandela University)

  • Nicolene Hamman

    (Department of Economics, Nelson Mandela University)

  • Thando Mkhombo

    (Department of Economics, Nelson Mandela University)

  • Simba Mhaka

    (Department of Economics, Nelson Mandela University)

  • Nomahlubi Mavikela

    (Department of Economics, Nelson Mandela University)

  • Andrew Phiri

    (Department of Economics, Nelson Mandela University)

Abstract
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. In differing from a majority of previous studies we use quantile regressions which investigates the effects of FDI on economic growth at different distributional quantiles. Puzzling enough, our 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 result have important implications for policymakers in South Africa.

Suggested Citation

  • Hlalefang Khobai & Nicolene Hamman & Thando Mkhombo & Simba Mhaka & Nomahlubi Mavikela & Andrew Phiri, 2017. "The FDI-growth nexus in South Africa: A re-examination using quantile regression approach," Working Papers 1703, Department of Economics, Nelson Mandela University, revised Jul 2017.
    • Handle: RePEc:mnd:wpaper:1703
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    References listed on IDEAS

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    2. Udi Joshua & Festus V. Bekun & Samuel A. Sarkodie, 2020. "New Insight into the Causal Linkage between Economic Expansion, FDI, Coal consumption, Pollutant emissions and Urbanization in South Africa," Working Papers 20/011, European Xtramile Centre of African Studies (EXCAS).
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    4. Ben-Salha Ousama & Zmami Mourad, 2020. "The impact of private capital flows on economic growth in the MENA region," Economics and Business Review, Sciendo, vol. 6(3), pages 45-67, August.
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    7. Udi Joshua, 2019. "An ARDL Approach to the Government Expenditure and Economic Growth Nexus in Nigeria," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 5(3), pages 152-160, September.
    8. Hlongwane, Nyiko Worship & Mmutle, Tumelo Donald & Daw, Olebogeng David, 2021. "The relationship between foreign direct investment and economic growth in SADC region from 2000 to 2019: An econometric view," MPRA Paper 111008, University Library of Munich, Germany.
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    More about this item

    Keywords

    FDI; Economic growth; Quantile regression; Global financial crisis; South Africa.;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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