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

Author

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  • Nandipha Dondashe

    (Department of Economics, Nelson Mandela University)

  • Andrew Phiri

    (Department of Economics, Nelson Mandela University)

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

  • Nandipha Dondashe & Andrew Phiri, 2018. "Determinants of FDI in South Africa: Do macroeconomic variables matter?," Working Papers 1802, Department of Economics, Nelson Mandela University, revised Jan 2018.
    • Handle: RePEc:mnd:wpaper:1802
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    Cited by:

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    2. 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).
    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. 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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