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An analysis of the relationship between exports and economic growth in South Africa, 2000–2020

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  • Ramakgasha, Molobe Joyce
  • Gidi, Lungile Sivuyile
  • Thaba, Tshephi Kingsley

Abstract

This study aimed to investigate how exports affect the overall growth of the economy in South Africa. Quarterly time series data from StatsSA and the South African Reserve Bank covering 2000 to 2020 were used. The study utilized numerous econometric approaches, such as the unit root test, Johansen’s cointegration procedure, the Vector Error Correction Model (VECM), and the Granger causality model, to gain a clear perception of the relationship between exports and the rate of South Africa’s economic growth. The Johansen cointegration test was conducted, confirming the presence of a longterm equilibrium relationship between the data series. The results of the unit root test indicated that both variables became stationary at the first difference, as evidenced by both passing the Augmented Dickey-Fuller (ADF) test. The correlation between exports and growth of the economy is positive in the short term and in the long term. The outcomes of the Granger causality tests indicated that GDP Granger-causes exports, signifying that economic growth in South Africa has an effect on exports. Additionally, the VECM outcomes demonstrated that there exists both a short-term and long-term relationship between economic growth and exports in South Africa.

Suggested Citation

  • Ramakgasha, Molobe Joyce & Gidi, Lungile Sivuyile & Thaba, Tshephi Kingsley, 2023. "An analysis of the relationship between exports and economic growth in South Africa, 2000–2020," Journal of Agribusiness and Rural Development, University of Life Sciences, Poznan, Poland, vol. 69(3), March.
    • Handle: RePEc:ags:pojard:356226
    DOI: 10.22004/ag.econ.356226
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    References listed on IDEAS

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    4. Thierer, Adam & Broughel, James, 2019. "Technological Innovation and Economic Growth: A Brief Report on the Evidence," Annals of Computational Economics, George Mason University, Mercatus Center, March.
    5. Lawrence Edwards & Ayanda Hlatshwayo, 2020. "Exchange rates and firm export performance in South Africa," WIDER Working Paper Series wp-2020-1, World Institute for Development Economic Research (UNU-WIDER).
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