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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

    as
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    More about this item

    Keywords

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

    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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