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The relationship between transport infrastructure and output growth in rural nodal municipalities within South Africa

Author

Listed:
  • Fatima Jili

    (University of KwaZulu-Natal)

  • Sanele Gumede

    (University of KwaZulu-Natal; South Africa)

Abstract

Transport infrastructure is an integral part of economic and social development in many countries, including South Africa. Economic growth theories state that a sound transport system enhances accessibility and output. Despite this, rural areas in South Africa face widespread poverty, poor infrastructure and limited access to essential services. This paper aims to examine the impact of transportation infrastructure investment on the output growth of rural nodal district municipalities in South Africa. This study focuses on two main objectives 1) investigating the relationship between transport infrastructure investment and output growth in rural nodal district municipalities and 2) understanding the causal relationship between transportation infrastructure investment and output growth in rural nodal district municipalities—this analysis uses panel data from 2012 to 2019. We used Fisher type (ADF and PP) panel unit root tests (Maddala & Wu,1999) to determine if the variables were stationary. Additionally, we employed Pedroni tests (1999) to ascertain the presence of cointegration among the variables. Once cointegration was confirmed, our study utilised the Panel VECM. A Panel Granger was then conducted to analyse the direction of causality between transportation infrastructure investment and output growth. This study recommends that the government should improve investments in transportation to improve the output of rural nodal district municipalities. Key Words:Transport Infrastructure Investment, Output Growth, Rural Nodal District Municipalities

Suggested Citation

  • Fatima Jili & Sanele Gumede, 2024. "The relationship between transport infrastructure and output growth in rural nodal municipalities within South Africa," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 13(6), pages 138-147, September.
    • Handle: RePEc:rbs:ijbrss:v:13:y:2024:i:6:p:138-147
    DOI: 10.20525/ijrbs.v13i6.3506
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    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Peter Pedroni, 1999. "Critical Values for Cointegration Tests in Heterogeneous Panels with Multiple Regressors," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(S1), pages 653-670, November.
    3. Walters, Jackie, 2013. "Overview of public transport policy developments in South Africa," Research in Transportation Economics, Elsevier, vol. 39(1), pages 34-45.
    4. Cheteni, Priviledge, 2013. "Transport Infrastructure Investment and Transport Sector Productivity on Economic Growth in South Africa (1975-2011)," MPRA Paper 53175, University Library of Munich, Germany, revised 18 Jul 2013.
    5. Morgenroth, Edgar, 2014. "The Regional Development Impacts of Transport Infrastructure: A Literature Review and Policy Implications," Research Series, Economic and Social Research Institute (ESRI), number BKMNEXT278.
    6. G. S. Maddala & Shaowen Wu, 1999. "A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(S1), pages 631-652, November.
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    8. repec:bla:obuest:v:61:y:1999:i:0:p:653-70 is not listed on IDEAS
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