Can macroeconomic policy stimulate private investment in South Africa? New insights from aggregate and manufacturing sector-level evidence
This study explores the determinants of investment using both aggregated industry-level data and disaggretated data on 27 sub-sectors of the manufacturing sector for the period 1970-2001. According to the results in this study, the government has potentially powerful means at its disposal to stimulate private investment. In particular, a domestic demand stimulus and public investment expansion will produce large gains in private investment. While the direct effects of lowering the interest rate appear to be quantitatively small, indirect effects operating notably through domestic demand and cheaper credit are likely to be large. The evidence in this study also indicates that it is important to minimise exchange rate instability to encourage investment. Copyright © 2008 John Wiley & Sons, Ltd.
Volume (Year): 20 (2008)
Issue (Month): 7 ()
|Contact details of provider:|| Web page: http://www3.interscience.wiley.com/journal/5102/home|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Paul Collier & Jan Willem Gunning, 1997.
"Explaining African economic performance,"
CSAE Working Paper Series
1997-02.2, Centre for the Study of African Economies, University of Oxford.
- Ndikumana, Leonce, 2000. "Financial Determinants of Domestic Investment in Sub-Saharan Africa: Evidence from Panel Data," World Development, Elsevier, vol. 28(2), pages 381-400, February.
- Mario I. Blejer & Mohsin S. Khan, 1984. "Government Policy and Private Investment in Developing Countries (Politique des pouvoirs publics et investissement privÃ© dans les pays en dÃ©veloppement) (PolÃtica estatal e inversiÃ³n privada en lo," IMF Staff Papers, Palgrave Macmillan, vol. 31(2), pages 379-403, June.
- Reinhart, Carmen & Khan, Mohsin, 1989.
"Private investment and economic growth in developing countries,"
13655, University Library of Munich, Germany.
- Khan, Mohsin S. & Reinhart, Carmen M., 1990. "Private investment and economic growth in developing countries," World Development, Elsevier, vol. 18(1), pages 19-27, January.
- Léonce Ndikumana, 2003.
"Financial Development, Financial Structure and Domestic Investment: International Evidence,"
wp16, Political Economy Research Institute, University of Massachusetts at Amherst.
- Ndikumana, Leonce, 2005. "Financial development, financial structure, and domestic investment: International evidence," Journal of International Money and Finance, Elsevier, vol. 24(4), pages 651-673, June.
- Léonce Ndikumana, 2003. "Financial Development, Financial Structure, and Domestic Investment: International Evidence," UMASS Amherst Economics Working Papers 2003-01, University of Massachusetts Amherst, Department of Economics.
- Levine, Ross & Renelt, David, 1992.
"A Sensitivity Analysis of Cross-Country Growth Regressions,"
American Economic Review,
American Economic Association, vol. 82(4), pages 942-63, September.
- Levine, Ross & Renelt, David, 1991. "A sensitivity analysis of cross-country growth regressions," Policy Research Working Paper Series 609, The World Bank.
- J. Bradford De Long & Lawrence H. Summers, .
"Equipment Investment and Economic Growth,"
J. Bradford De Long's Working Papers
_122, University of California at Berkeley, Economics Department.
- David Fielding,, .
"Manufacturing Investment in South Africa: A Time-Series Model,"
97/5, University of Nottingham, CREDIT.
- Fielding, David, 1999. "Manufacturing investment in South Africa: a time-series model," Journal of Development Economics, Elsevier, vol. 58(2), pages 405-427, April.
- G.L. Wet & Estelle Jonkergouw & Renee Koekemoer, 1995. "An Econometric Model for Monetary Policy in South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 63(4), pages 317-329, December.
- Fielding, David, 1997.
"Aggregate Investment in South Africa: A Model with Implications for Political Reform,"
Oxford Bulletin of Economics and Statistics,
Department of Economics, University of Oxford, vol. 59(3), pages 349-69, August.
- David Fielding,, . "Aggregate Investment in South Africa: A Model with Implications for Political Reform," Discussion Papers 96/13, University of Nottingham, CREDIT.
- Johannes Fedderke, 2004. "Investment in Fixed Capital Stock: Testing for the Impact of Sectoral and Systemic Uncertainty," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 66(2), pages 165-187, 05.
- Simon Roberts, 2004. "Investment in South Africa - a comment on recent contributions," Development Southern Africa, Taylor & Francis Journals, vol. 21(4), pages 743-756.
- Vishnu Padayachee, 2001. "Central Bank transformation in a globalized world: the Reserve Bank in post-apartheid South Africa," Journal of International Development, John Wiley & Sons, Ltd., vol. 13(6), pages 741-765.
- Edwards, Lawrence & Golub, Stephen S., 2004. "South Africa's International Cost Competitiveness and Exports in Manufacturing," World Development, Elsevier, vol. 32(8), pages 1323-1339, August.
- Janine Aron & Ibrahim Elbadawi & Brian Kahn, 1998.
"Determinants of the real exchange rate in South Africa,"
CSAE Working Paper Series
1997-16, Centre for the Study of African Economies, University of Oxford.
- Janine Aron & Ibrahim Elbadawi and Brian Kahn, 1997. "Determinants of the real exchange rate in South Africa," Economics Series Working Papers WPS/1997-16, University of Oxford, Department of Economics.
- ., 2004. "W," Chapters, in: An Eponymous Dictionary of Economics, chapter 21 Edward Elgar Publishing.
- W.A. Naudéa & R. Oostendorp & P.A.E. Serumaga-Zake, 2002. "South African Manufacturing In An African Context," South African Journal of Economics, Economic Society of South Africa, vol. 70(8), pages 1247-1272, December.
- Reinikka, Ritva & Svensson, Jakob, 2002. "Coping with poor public capital," Journal of Development Economics, Elsevier, vol. 69(1), pages 51-69, October.
- repec:pid:journl:v:35:y:1996:i:4:p:419-439 is not listed on IDEAS
- du Plessis, S.A., 2006.
"Reconsidering the business cycle and stabilisation policies in South Africa,"
Elsevier, vol. 23(5), pages 761-774, September.
- Stan du Plessis, 2005. "Reconsidering the business cycle and stabilisation policies in South Africa," Working Papers 10, Economic Research Southern Africa.
- Devarajan, Shantayanan & Easterley, William R. & Pack, Howard, 2001. "Is investment in Africa too low or too high : macro and micro evidence," Policy Research Working Paper Series 2519, The World Bank.
- S.A. Du Plessis, 2002. "EVALUATING THE SARB's INFLATION TARGET," South African Journal of Economics, Economic Society of South Africa, vol. 70(6), pages 982-1007, 09.
- Manuel Arellano & Stephen Bond, 1991.
"Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations,"
Review of Economic Studies,
Oxford University Press, vol. 58(2), pages 277-297.
- Tom Doan, . "RATS program to replicate Arellano-Bond 1991 dynamic panel," Statistical Software Components RTZ00169, Boston College Department of Economics.
- Reinikka, Ritva & Svensson, Jakob, 1999. "How inadequate provision of public infrastructure and services affects private investment," Policy Research Working Paper Series 2262, The World Bank.
- Lawrence Edwards & StephenS. Golub, 2003. "South African Productivity And Capital Accumulation In Manufacturing: An International Comparative Analysis," South African Journal of Economics, Economic Society of South Africa, vol. 71(4), pages 659-678, December.
- Joshua Greene & Delano Villanueva, 1991. "Private Investment in Developing Countries: An Empirical Analysis," IMF Staff Papers, Palgrave Macmillan, vol. 38(1), pages 33-58, March.
When requesting a correction, please mention this item's handle: RePEc:wly:jintdv:v:20:y:2008:i:7:p:869-887. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.