The determinants of foreign direct investment inflows into South Africa
- Authors: Campher, Renate
- Date: 2024-04
- Subjects: Investments, Foreign -- South Africa , Economic development -- South Africa , South Africa -- Foreign economic relations
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10948/64907 , vital:73958
- Description: Through mechanisms such as knowledge transfer and productivity spillovers, foreign direct investment (FDI) is viewed as a critical driver of growth in developing economies. The flow of FDI into a country can benefit both the investing entity and the host government. This study employed ordinary least square (OLS) regression to examine the factors that determine FDI in South Africa using time series data from 1996 to 2021. The results demonstrate that gross domestic product (GDP), institutional quality, trade openness, the regulatory environment, and the real effective exchange rate (REER) all have positive effects on FDI flows into South Africa. To sustain and promote FDI inflows, the government of South Africa must ensure that the country remains attractive for investment by better promoting good governance, creating jobs to increase growth, maintaining free and fair elections in 2024, forging alliances with trading partners outside of Africa, speeding up all policy processes that may hinder the inflow of FDI, and decreasing government debt. , Thesis (MPhil) -- Faculty of Business and Economic Sciences, School of Economics, Development and Tourism, 2024
- Full Text:
- Date Issued: 2024-04
- Authors: Campher, Renate
- Date: 2024-04
- Subjects: Investments, Foreign -- South Africa , Economic development -- South Africa , South Africa -- Foreign economic relations
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10948/64907 , vital:73958
- Description: Through mechanisms such as knowledge transfer and productivity spillovers, foreign direct investment (FDI) is viewed as a critical driver of growth in developing economies. The flow of FDI into a country can benefit both the investing entity and the host government. This study employed ordinary least square (OLS) regression to examine the factors that determine FDI in South Africa using time series data from 1996 to 2021. The results demonstrate that gross domestic product (GDP), institutional quality, trade openness, the regulatory environment, and the real effective exchange rate (REER) all have positive effects on FDI flows into South Africa. To sustain and promote FDI inflows, the government of South Africa must ensure that the country remains attractive for investment by better promoting good governance, creating jobs to increase growth, maintaining free and fair elections in 2024, forging alliances with trading partners outside of Africa, speeding up all policy processes that may hinder the inflow of FDI, and decreasing government debt. , Thesis (MPhil) -- Faculty of Business and Economic Sciences, School of Economics, Development and Tourism, 2024
- Full Text:
- Date Issued: 2024-04
A behaviour of South Africa’s economy towards inflows of foreign direct investment (FDI) from BRICs economies
- Authors: Dingela, Siyasanga
- Date: 2021-04
- Subjects: Investments, Foreign -- South Africa , Investments, Foreign -- Developing countries , South Africa -- Economic conditions , BRIC countries -- Foreign economic relations
- Language: English
- Type: Doctoral theses , text
- Identifier: http://hdl.handle.net/10948/51141 , vital:43212
- Description: This study investigated a behaviour of South Africa’s economy towards inflows of foreign direct investment (FDI) from Brazil, Russia, India and China (BRICs) economies, during the period 1997 to 2016. The BRICs bloc was coined in 2001 by then chairperson of Goldman Sachs Asset Management, Jim O’Neil. According to Goldman Sach (2001), the BRICs group was collectively expected to overtake the major economic powers over the span of a few decades. Their growth is expected to shape a new economic order and replace the currently dominant advanced economies. South Africa joined the BRICs bloc in 2010 as the jeweler of the world and as a gateway to Africa. It joined the BRICs group at the time when economic growth was at a sluggish rate, and the savings and investment were at the lowest rate. The country had a high unemployment rate, high levels of poverty and income inequality. On the other hand, the BRICs economies had limited intra-BRICs flows amongst themselves. It is against this background that this study investigated the long run impact of BRICs FDI inflows on South Africa’s economic growth, and the causality relationship between South Africa’s economic growth and BRICs FDI inflows. This study contributes to the body of knowledge of economics in South Africa and the literature on foreign direct investment and economic growth in South Africa. The study employed two cointegration methods to investigate the behaviour of South Africa’s economy towards inflows of foreign direct investment from BRICs economies. These are fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS). For granger causality, the study employed Stacked and Dumistrescu Hurlin tests. All the models used time series annual data from 1997 to 2016. The Unit root test results confirmed that the variables were stationary at first difference using panel Im, Pesaran, Shin (IPS) and Levin, Lin, Chu (LLC). The research employs four regressions, first, Economic growth and foreign direct investment (i.e. private sector, banking sector and both sectors), human capital, physical capital, household consumption, government expenditure, exports, and arable land; Second, Employment and foreign direct investment, human capital, physical capital, household consumption, government expenditure, exports, and arable land; third, Economic complexity and foreign direct investment, human capital, physical capital, household consumption, government expenditure, exports, and arable land; finally, Unemployment and foreign direct investment, human capital, physical capital, household consumption, government expenditure, exports, and arable land. The cointegration results for private FDI and economic growth, employment, economic complexity, and unemployment. The results show only economic complexity has significant effect on foreign direct investment and other variables show insignificant results. However, this effect is smaller compared to other growth determinants which are included in the regressions. The cointegration results for bank FDI. These results show more similarities with private FDI results and few differences. However, this effect is smaller compared to other growth determinants included in the regressions. These growth determinants, however, show a positive effect of human capital and household consumption on economic growth which is expected. Other interesting results are exports being positively related with economic growth and unemployment but negative with employment and insignificant with economic complexity. Another one is government spending negatively influence economic growth, employment and positively influence unemployment. But insignificant for economic complexity. Total FDI results and other variables. These results are also similar to private and bank FDI results discussed above. Economic complexity shows significant effect with foreign direct investment, yet other variables are insignificant. . Further results show human capital positively related with economic growth, which is expected. However, physical capital and household consumption negatively affects growth. Another one exports show positive influence on economic growth but negatively related with employment. Yet, insignificant with economic complexity and unemployment. Other results government spending shows negative influence with employment but insignificant with economic growth, economic complexity and unemployment. The results for nonlinearity between the variables under review. The results that employment and economic complexity are nonlinear with foreign direct investment and no nonlinearity between unemployment, economic growth and foreign direct investment. For employment, low levels of foreign direct investment (LFDI_private) adversely affects employment but at higher levels (FDI_private_SQ) is insignificant. For economic complexity, low levels of foreign direct investment are insignificant for economic complexity but at higher levels there is a positive effect of squared foreign direct investment on economic complexity. Further results show that economic growth and employment are nonlinear with human capital, physical capital, household consumption and exports. Physical capital and household consumption adversely affect economic growth, yet positively affects employment. Human capital positively affects economic growth, employment, and unemployment. Exports positively affect economic growth, but negatively affect employment. Further results show nonlinearity between employment and government expenditure. Government expenditure adversely affects employment. Also, economic growth and unemployment show nonlinearity with arable land. Arable land adversely affects economic growth but positively affects unemployment. Nonlinear results for economic growth and economic complexity with foreign direct investment but no nonlinearity in other remaining variables. For economic growth, low levels of foreign direct investment there is a positive effect of foreign direct investment on economic growth, however, at higher levels foreign direct investment are insignificant. For economic complexity, low levels of foreign direct investment are insignificant, yet, higher levels of foreign direct investment there is a positive influence of foreign direct investment on economic complexity. Further results show economic growth and employment that are nonlinear with human capital, physical capital, and household consumption. Human capital positively affects both economic growth and employment. Physical capital and household consumption are adversely affecting economic growth, yet positively affects employment. Further results show nonlinearity between economic growth and government expenditure. Government expenditure adversely affects employment. More results, employment, and unemployment show nonlinearity results with exports. Exports adversely affect employment but positively affects unemployment. Results show economic growth and unemployment that are nonlinear with arable land. Arable land adversely affects economic growth, but positively affect unemployment. Nonlinear results for economic complexity only and other variables show no nonlinearity in the regressions. For economic complexity, low levels of foreign direct investment are insignificant, but at higher levels of foreign direct investment there is positive effect of foreign direct investment on economic complexity. More results show economic growth and employment that are nonlinear with human capital, physical capital, household consumption and exports. Human capital and exports positively affect economic growth, employment, and unemployment. Whereas, physical capital and household consumption adversely affects economic growth and unemployment, yet positively affects employment. Further results show nonlinearity between employment and government expenditure. Government spending adversely affects employment. Further results show nonlinearity between economic growth and unemployment with arable land. Arable land positively affects unemployment, yet adversely affects economic growth. The following section discusses granger causality results. This study also employed granger causality tests. The causality results between economic growth, employment, economic complexity, unemployment, and private foreign direct investment. The causality results show that there is granger causality between economic growth and economic complexity with private foreign direct investment. Whereas, between bank foreign direct investment and other variables there is no granger causality. However, between total foreign direct investment and economic growth and employment there is granger causality. There are a number of policy recommendations that can be drawn from the study. The study results in overall revealed that BRICs (private and bank) FDI inflows had a positive impact on South Africa’s economic growth between 1997 and 2016. The study results suggest that the policy makers should focus the attention on lobbying foreign direct investment from BRICs economies, since this study shows positive impact and relationship between South Africa’s economic growth and BRICs FDI inflows. The BRICs economies should focus on enhancing investment partnership, preventing protectionism, and promoting intra-BRICS flows. In addition, South Africa should eliminate barriers affecting business with BRICs countries. Policy makers should promote the building of new companies (for example Greenfield Investment) so that the economy of South Africa could grow and create employment. , Thesis (MA) -- Faculty of Business and Economic Sciences, Economics, 2021
- Full Text:
- Date Issued: 2021-04
- Authors: Dingela, Siyasanga
- Date: 2021-04
- Subjects: Investments, Foreign -- South Africa , Investments, Foreign -- Developing countries , South Africa -- Economic conditions , BRIC countries -- Foreign economic relations
- Language: English
- Type: Doctoral theses , text
- Identifier: http://hdl.handle.net/10948/51141 , vital:43212
- Description: This study investigated a behaviour of South Africa’s economy towards inflows of foreign direct investment (FDI) from Brazil, Russia, India and China (BRICs) economies, during the period 1997 to 2016. The BRICs bloc was coined in 2001 by then chairperson of Goldman Sachs Asset Management, Jim O’Neil. According to Goldman Sach (2001), the BRICs group was collectively expected to overtake the major economic powers over the span of a few decades. Their growth is expected to shape a new economic order and replace the currently dominant advanced economies. South Africa joined the BRICs bloc in 2010 as the jeweler of the world and as a gateway to Africa. It joined the BRICs group at the time when economic growth was at a sluggish rate, and the savings and investment were at the lowest rate. The country had a high unemployment rate, high levels of poverty and income inequality. On the other hand, the BRICs economies had limited intra-BRICs flows amongst themselves. It is against this background that this study investigated the long run impact of BRICs FDI inflows on South Africa’s economic growth, and the causality relationship between South Africa’s economic growth and BRICs FDI inflows. This study contributes to the body of knowledge of economics in South Africa and the literature on foreign direct investment and economic growth in South Africa. The study employed two cointegration methods to investigate the behaviour of South Africa’s economy towards inflows of foreign direct investment from BRICs economies. These are fully modified ordinary least squares (FMOLS) and dynamic ordinary least squares (DOLS). For granger causality, the study employed Stacked and Dumistrescu Hurlin tests. All the models used time series annual data from 1997 to 2016. The Unit root test results confirmed that the variables were stationary at first difference using panel Im, Pesaran, Shin (IPS) and Levin, Lin, Chu (LLC). The research employs four regressions, first, Economic growth and foreign direct investment (i.e. private sector, banking sector and both sectors), human capital, physical capital, household consumption, government expenditure, exports, and arable land; Second, Employment and foreign direct investment, human capital, physical capital, household consumption, government expenditure, exports, and arable land; third, Economic complexity and foreign direct investment, human capital, physical capital, household consumption, government expenditure, exports, and arable land; finally, Unemployment and foreign direct investment, human capital, physical capital, household consumption, government expenditure, exports, and arable land. The cointegration results for private FDI and economic growth, employment, economic complexity, and unemployment. The results show only economic complexity has significant effect on foreign direct investment and other variables show insignificant results. However, this effect is smaller compared to other growth determinants which are included in the regressions. The cointegration results for bank FDI. These results show more similarities with private FDI results and few differences. However, this effect is smaller compared to other growth determinants included in the regressions. These growth determinants, however, show a positive effect of human capital and household consumption on economic growth which is expected. Other interesting results are exports being positively related with economic growth and unemployment but negative with employment and insignificant with economic complexity. Another one is government spending negatively influence economic growth, employment and positively influence unemployment. But insignificant for economic complexity. Total FDI results and other variables. These results are also similar to private and bank FDI results discussed above. Economic complexity shows significant effect with foreign direct investment, yet other variables are insignificant. . Further results show human capital positively related with economic growth, which is expected. However, physical capital and household consumption negatively affects growth. Another one exports show positive influence on economic growth but negatively related with employment. Yet, insignificant with economic complexity and unemployment. Other results government spending shows negative influence with employment but insignificant with economic growth, economic complexity and unemployment. The results for nonlinearity between the variables under review. The results that employment and economic complexity are nonlinear with foreign direct investment and no nonlinearity between unemployment, economic growth and foreign direct investment. For employment, low levels of foreign direct investment (LFDI_private) adversely affects employment but at higher levels (FDI_private_SQ) is insignificant. For economic complexity, low levels of foreign direct investment are insignificant for economic complexity but at higher levels there is a positive effect of squared foreign direct investment on economic complexity. Further results show that economic growth and employment are nonlinear with human capital, physical capital, household consumption and exports. Physical capital and household consumption adversely affect economic growth, yet positively affects employment. Human capital positively affects economic growth, employment, and unemployment. Exports positively affect economic growth, but negatively affect employment. Further results show nonlinearity between employment and government expenditure. Government expenditure adversely affects employment. Also, economic growth and unemployment show nonlinearity with arable land. Arable land adversely affects economic growth but positively affects unemployment. Nonlinear results for economic growth and economic complexity with foreign direct investment but no nonlinearity in other remaining variables. For economic growth, low levels of foreign direct investment there is a positive effect of foreign direct investment on economic growth, however, at higher levels foreign direct investment are insignificant. For economic complexity, low levels of foreign direct investment are insignificant, yet, higher levels of foreign direct investment there is a positive influence of foreign direct investment on economic complexity. Further results show economic growth and employment that are nonlinear with human capital, physical capital, and household consumption. Human capital positively affects both economic growth and employment. Physical capital and household consumption are adversely affecting economic growth, yet positively affects employment. Further results show nonlinearity between economic growth and government expenditure. Government expenditure adversely affects employment. More results, employment, and unemployment show nonlinearity results with exports. Exports adversely affect employment but positively affects unemployment. Results show economic growth and unemployment that are nonlinear with arable land. Arable land adversely affects economic growth, but positively affect unemployment. Nonlinear results for economic complexity only and other variables show no nonlinearity in the regressions. For economic complexity, low levels of foreign direct investment are insignificant, but at higher levels of foreign direct investment there is positive effect of foreign direct investment on economic complexity. More results show economic growth and employment that are nonlinear with human capital, physical capital, household consumption and exports. Human capital and exports positively affect economic growth, employment, and unemployment. Whereas, physical capital and household consumption adversely affects economic growth and unemployment, yet positively affects employment. Further results show nonlinearity between employment and government expenditure. Government spending adversely affects employment. Further results show nonlinearity between economic growth and unemployment with arable land. Arable land positively affects unemployment, yet adversely affects economic growth. The following section discusses granger causality results. This study also employed granger causality tests. The causality results between economic growth, employment, economic complexity, unemployment, and private foreign direct investment. The causality results show that there is granger causality between economic growth and economic complexity with private foreign direct investment. Whereas, between bank foreign direct investment and other variables there is no granger causality. However, between total foreign direct investment and economic growth and employment there is granger causality. There are a number of policy recommendations that can be drawn from the study. The study results in overall revealed that BRICs (private and bank) FDI inflows had a positive impact on South Africa’s economic growth between 1997 and 2016. The study results suggest that the policy makers should focus the attention on lobbying foreign direct investment from BRICs economies, since this study shows positive impact and relationship between South Africa’s economic growth and BRICs FDI inflows. The BRICs economies should focus on enhancing investment partnership, preventing protectionism, and promoting intra-BRICS flows. In addition, South Africa should eliminate barriers affecting business with BRICs countries. Policy makers should promote the building of new companies (for example Greenfield Investment) so that the economy of South Africa could grow and create employment. , Thesis (MA) -- Faculty of Business and Economic Sciences, Economics, 2021
- Full Text:
- Date Issued: 2021-04
The effect of sectoral foreign direct investment on sectoral growth and sectoral employment in South Africa
- Authors: Paul, Bernice Nicole
- Date: 2021-04
- Subjects: Investments, Foreign -- South Africa , South Africa -- Economic conditions -- 1991- , South Africa -- Economic policy , Gross domestic product -- South Africa , UNCTAD-ICTSD Project on IPRs and Sustainable Development , Unemployment -- South Africa
- Language: English
- Type: thesis , text , Master , MCom
- Identifier: http://hdl.handle.net/10962/177964 , vital:42894
- Description: Over several decades past, developing countries have received increased amounts of Foreign Direct Investment (FDI). This form of investment has been welcomed because of the perceived benefits attached to it. FDI is seen as an important driver of economic development for many nations. For South Africa specifically, GDP growth rates have remained less than required, unemployment rates have reached staggering levels, poverty and inequality levels are increasing and the list goes on. Considering the perceived benefits of FDI, one may argue that FDI can play a crucial role in reducing the mentioned challenges facing the nation, however, only if directed to initiatives contributing to growth and employment. The 2015 Investment Policy Framework for Sustainable Development includes an action menu promoting investment in sectors relating to the achievement of the Sustainable Development Goals (SDGs). Therefore, this study is aimed at investigating the relationship between sector FDI and sector growth in addition to investigating the effect of sector FDI on sector employment over the period 2000Q1 to 2016Q4 for six of South Africa’s economic sectors. The reason for such a study is based on the premise that developing nations such as South Africa lack sound trade and industrial policies favorable to foreign investors. This then leads to the nation failing to attract higher volumes of FDI which could be used to address structural challenges facing the country. It is therefore important to identify sectors in which FDI has resulted in growth and employment so that when policies are considered, the right FDI is targeted. A comprehensive review of existing theoretical and empirical literature showed that FDI does result in economic growth for developed and developing countries, although FDI crowds out domestic investment in the short run. Literature on the effect of FDI on employment showed diverse effects. Some studies found FDI to increase employment overall, other studies found FDI to increase employment only during periods of restructuring and some studies found FDI to result in job losses. For South African sectors, the present study finds that the financial services sector receives the highest volume of South African FDI, followed by the mining and quarrying sector and the manufacturing, however, FDI in all six sectors under study is associated with increased growth and employment. This finding suggests that the financial services sector has received increased volumes of FDI as a result of financialization of the South African economy. It is this increased FDI in the financial services sector that is directed to income redistribution from the real sector to the finance sector. This study employed econometric techniques and methods of analysis to investigate the relationship between sector FDI and sector growth, and the effect of sector FDI on sector employment. Panel cointegration tests were conducted for all six sectors included in the study to establish if long run equilibrium relationships exist among integrated variables. The Johansen-Fisher panel cointegration test revealed that there is evidence of cointegration in four of the six sectors. Since cointegration was established, the study proceeded to perform the Dumitrescu-Hurlin panel causality analysis and estimate a Panel Vector Error Correction Model (VECM). Results from the causality analysis found a unidirectional causality relationship between FDI and GDP growth, while the panel VECM found FDI to have a significant effect on growth in all sectors. The Seemingly Unrelated Regression (SUR) model employed to investigate the effect of FDI on employment found FDI to have an insignificant effect on employment in all sectors included, although the signs of the coefficients suggest that FDI is associated with increased employment and rising wages is associated with increased productivity growth. Since this study finds that FDI is associated with increased GDP growth in all six sectors under study, policy makers should devise strategies to attract FDI in sectors such as the transportation, storage and communication sector and the electricity, gas and water sector as FDI in these sectors are associated with increased growth however, they receive very low levels of FDI. There are a number of reasons for this, therefore, government institutions and policy makers should investigate the reasons for these low levels of FDI inflows into these sectors so that they can devise further strategies to address these reasons and perhaps attract higher levels of FDI into these sectors. Spillover benefits play a major role in host nations participating in FDI therefore, prior to entering into bilateral treaty agreements, policy makers should ensure that foreign investors are compelled to create jobs, offer training and qualifications etc. through their investments so that some of the SDGs can be achieved. Additionally, this study finds a positive, statistically insignificant relationship between FDI and employment. FDI may not have a significant relationship on employment due to jobless growth and capital-intensive growth rather than labor-intensive growth. Such a situation calls for government intervention. Skills shortage is a rising problem in South Africa; therefore, investors choose to employ advanced technologies rather than people. Under such circumstances, governments are encouraged to invest resources into skills development so that human capital are not completely replaced by technology. , Thesis (MCom) -- Faculty of Commerce, Economics and Economic History, 2021
- Full Text:
- Date Issued: 2021-04
- Authors: Paul, Bernice Nicole
- Date: 2021-04
- Subjects: Investments, Foreign -- South Africa , South Africa -- Economic conditions -- 1991- , South Africa -- Economic policy , Gross domestic product -- South Africa , UNCTAD-ICTSD Project on IPRs and Sustainable Development , Unemployment -- South Africa
- Language: English
- Type: thesis , text , Master , MCom
- Identifier: http://hdl.handle.net/10962/177964 , vital:42894
- Description: Over several decades past, developing countries have received increased amounts of Foreign Direct Investment (FDI). This form of investment has been welcomed because of the perceived benefits attached to it. FDI is seen as an important driver of economic development for many nations. For South Africa specifically, GDP growth rates have remained less than required, unemployment rates have reached staggering levels, poverty and inequality levels are increasing and the list goes on. Considering the perceived benefits of FDI, one may argue that FDI can play a crucial role in reducing the mentioned challenges facing the nation, however, only if directed to initiatives contributing to growth and employment. The 2015 Investment Policy Framework for Sustainable Development includes an action menu promoting investment in sectors relating to the achievement of the Sustainable Development Goals (SDGs). Therefore, this study is aimed at investigating the relationship between sector FDI and sector growth in addition to investigating the effect of sector FDI on sector employment over the period 2000Q1 to 2016Q4 for six of South Africa’s economic sectors. The reason for such a study is based on the premise that developing nations such as South Africa lack sound trade and industrial policies favorable to foreign investors. This then leads to the nation failing to attract higher volumes of FDI which could be used to address structural challenges facing the country. It is therefore important to identify sectors in which FDI has resulted in growth and employment so that when policies are considered, the right FDI is targeted. A comprehensive review of existing theoretical and empirical literature showed that FDI does result in economic growth for developed and developing countries, although FDI crowds out domestic investment in the short run. Literature on the effect of FDI on employment showed diverse effects. Some studies found FDI to increase employment overall, other studies found FDI to increase employment only during periods of restructuring and some studies found FDI to result in job losses. For South African sectors, the present study finds that the financial services sector receives the highest volume of South African FDI, followed by the mining and quarrying sector and the manufacturing, however, FDI in all six sectors under study is associated with increased growth and employment. This finding suggests that the financial services sector has received increased volumes of FDI as a result of financialization of the South African economy. It is this increased FDI in the financial services sector that is directed to income redistribution from the real sector to the finance sector. This study employed econometric techniques and methods of analysis to investigate the relationship between sector FDI and sector growth, and the effect of sector FDI on sector employment. Panel cointegration tests were conducted for all six sectors included in the study to establish if long run equilibrium relationships exist among integrated variables. The Johansen-Fisher panel cointegration test revealed that there is evidence of cointegration in four of the six sectors. Since cointegration was established, the study proceeded to perform the Dumitrescu-Hurlin panel causality analysis and estimate a Panel Vector Error Correction Model (VECM). Results from the causality analysis found a unidirectional causality relationship between FDI and GDP growth, while the panel VECM found FDI to have a significant effect on growth in all sectors. The Seemingly Unrelated Regression (SUR) model employed to investigate the effect of FDI on employment found FDI to have an insignificant effect on employment in all sectors included, although the signs of the coefficients suggest that FDI is associated with increased employment and rising wages is associated with increased productivity growth. Since this study finds that FDI is associated with increased GDP growth in all six sectors under study, policy makers should devise strategies to attract FDI in sectors such as the transportation, storage and communication sector and the electricity, gas and water sector as FDI in these sectors are associated with increased growth however, they receive very low levels of FDI. There are a number of reasons for this, therefore, government institutions and policy makers should investigate the reasons for these low levels of FDI inflows into these sectors so that they can devise further strategies to address these reasons and perhaps attract higher levels of FDI into these sectors. Spillover benefits play a major role in host nations participating in FDI therefore, prior to entering into bilateral treaty agreements, policy makers should ensure that foreign investors are compelled to create jobs, offer training and qualifications etc. through their investments so that some of the SDGs can be achieved. Additionally, this study finds a positive, statistically insignificant relationship between FDI and employment. FDI may not have a significant relationship on employment due to jobless growth and capital-intensive growth rather than labor-intensive growth. Such a situation calls for government intervention. Skills shortage is a rising problem in South Africa; therefore, investors choose to employ advanced technologies rather than people. Under such circumstances, governments are encouraged to invest resources into skills development so that human capital are not completely replaced by technology. , Thesis (MCom) -- Faculty of Commerce, Economics and Economic History, 2021
- Full Text:
- Date Issued: 2021-04
Understanding the South African international investment position and the valuation effects: subtitle if needed. If no subtitle follow instructions in manual
- Authors: Hlati, Sisamnkelo
- Date: 2021-04
- Subjects: Investments, Foreign -- South Africa , South Africa -- Economic conditions , Economics
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10948/51534 , vital:43298
- Description: This study examines the relationship between the South African Net International Investment Positions and the valuation effects over a period of 47 years from 1970 to 2017. To investigate the long run relationship between NIIP and the determinants thereof, this current study made use of the bounds test technique and the results indicate that a long run relationship exist. In which case, the autoregressive distributed lag model to empirically investigate the impact of the current account balance, capital account balance and the valuation effects on the South African NIIP was conducted and this current study finds out that there is a long run positive relationship between the current account balance and the South African NIIP. However, the study noted that the impact of the current account balance is volatile and this could be due to the net investment income payments (in a form of interest and dividend) made to foreign investors, which constitute a proportionately large share of the South African current account deficit. The capital account balance exhibits a positive long run impact on the South African NIIP in line with theory. The valuation effects on the other hand indicate a relatively stable impact on the South African NIIP, while in the long run have a positive impact on NIIP. The positive impact of the valuation effects could be due to gains being relatively larger than losses in the long run. , Thesis (MCom) -- Faculty of Business and Economic Sciences, Economics, 2021
- Full Text:
- Date Issued: 2021-04
- Authors: Hlati, Sisamnkelo
- Date: 2021-04
- Subjects: Investments, Foreign -- South Africa , South Africa -- Economic conditions , Economics
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10948/51534 , vital:43298
- Description: This study examines the relationship between the South African Net International Investment Positions and the valuation effects over a period of 47 years from 1970 to 2017. To investigate the long run relationship between NIIP and the determinants thereof, this current study made use of the bounds test technique and the results indicate that a long run relationship exist. In which case, the autoregressive distributed lag model to empirically investigate the impact of the current account balance, capital account balance and the valuation effects on the South African NIIP was conducted and this current study finds out that there is a long run positive relationship between the current account balance and the South African NIIP. However, the study noted that the impact of the current account balance is volatile and this could be due to the net investment income payments (in a form of interest and dividend) made to foreign investors, which constitute a proportionately large share of the South African current account deficit. The capital account balance exhibits a positive long run impact on the South African NIIP in line with theory. The valuation effects on the other hand indicate a relatively stable impact on the South African NIIP, while in the long run have a positive impact on NIIP. The positive impact of the valuation effects could be due to gains being relatively larger than losses in the long run. , Thesis (MCom) -- Faculty of Business and Economic Sciences, Economics, 2021
- Full Text:
- Date Issued: 2021-04
The influence of multinational corporations in promoting foreign direct investment in the South African business environment
- Van der Berg, Jan Gabriel Mara
- Authors: Van der Berg, Jan Gabriel Mara
- Date: 2019
- Subjects: Investments, Foreign -- South Africa , Business enterprises Business Organisations Industrial promotion
- Language: English
- Type: Thesis , Doctoral , DPhil
- Identifier: http://hdl.handle.net/10948/44213 , vital:37131
- Description: One of the major driving forces behind international trade over the past thirty years has been Foreign Direct Investment (FDI). Due to the importance of FDI, a vast amount of research has been conducted on the various elements that make up FDI. There has also been widespread research done to measure the impact of FDI on host countries, and attempts have been made to determine the long-term benefits thereof. Despite the existent research on FDI, there is a dearth of literature on the unique situation in South Africa (due to the country’s fragmented past) and the impact of FDI on the South African economy. This study attempts to address this research gap and to add to the existent body of knowledge on FDI market entry. Thus, the primary objective of this study was to examine the impact of multinational corporations (MNCs) in promoting the entry of FDIs in South Africa, and the effectiveness of these investments in the South African business environment. The comprehensive literature review in this study included a discussion of the background to the pre- and post-apartheid South African economy, and the various efforts made by the South African government to facilitate sustainable economic growth through various economic policies. FDI was identified as one of the four major indicators of economic growth and was therefore investigated as a concept, strategy and driver of change. The South African marketing environment was analysed in order to assist in the identification of variables that are conducive to FDI. The final section of the literature review utilised three cases to better illustrate and understand the different challenges, market entry strategies and long-term implications of FDI. In this study, the independent variables (international marketing environment, stakeholder intervention, government considerations, resources and FDI incentives) were identified as influencing the mediating variable (FDI market entry strategy) and the dependent variables (competitiveness, sustainability, trade agreements and commitment of traders). These independent variables were selected to construct a hypothesised model and the research hypotheses. To this end, an empirical investigation was conducted, the measuring instrument used in this investigation was a questionnaire, which was assembled with the help of insights gained from secondary sources. The study respondents were selected through convenience sampling. A total of 210 respondents participated in the study, and 165 useable questionnaires were subjected to statistical analysis. The data collected for this study was subjected to five phases of analysis: exploratory factor analysis to assess validity; Cronbach’s alpha was used to test for internal consistency reliability; descriptive statistics to describe the fundamental features of the data by providing a statistical summary and analysis; and the nine hypotheses pertaining to the relationships between different variables were assessed using inferential statistical procedures, Pearson’s product correlation and regression analysis. This led to the adaptation of the hypothesised model and the hypotheses so as to indicate the changes resulting from the EFA. The findings of this study reveals that external stakeholder intervention as well as FDI incentives and resources effectively influence FDI market entry strategy in the South African business environment. The study results further reveal that the promotion of FDI market entry strategy positively influences competitiveness, sustainability, trade agreements and commitment of traders in the South African business environment. For MNCs to be successful in the expansion of FDI market entry strategy in the South African business environment, the study recommends that it is important to consider the availability of potential local partners, proximity to trading routes, reduction of the costs involved in supplying the market, the effect of tariff barriers and a competitive domestic economy. It is further recommended that MNCs need to focus on the utilisation of reliable and effective equipment in order to enable the productive management of operations in the South African business environment. The study also recommends the South African business environment as a strategic investment destination for the promotion of FDI market entry strategy as it offers low production costs in particular trading locations. This study has contributed to the field of FDI and the FDI market entry strategies employed by MNCs in South Africa. The research findings identified the international marketing (SLEPTS) factors through an assessment of the South African marketing environment, as these factors are deemed important for FDI to occur. The study also highlights the critical international marketing factors that could be used to improve local conditions through a mixture of incentives and policy re-alignment, so as to be more conducive to attracting large scale FDI. The hypothesised model developed for this study contributed to identifying the influence of external stakeholders on the successful market entry of FDI into South Africa, a critical element that MNCs usually only identify after market entry is complete. Evidence from the study shows that the South African government should direct FDI incentives towards those sectors in the economy that stand to benefit the most from the spill-over effects of FDI, in order to maximise the impact of FDI on the local economy. The research also indicates that elements such as restrictive legislation and government corruption may, to a certain degree, hinder FDI; therefore, these issues need to be addressed through legislation. It is recommended that all local efforts to attract FDI are industry or sector focussed, and that they are guided by government policies towards the greater benefit of the South African economy. Furthermore, the study found that the relationship between the host country and the MNC is critical to achieving sustainability in the long-term; therefore, it is suggested that the South African government improves its relationship with local businesses and MNCs that are looking to invest in South Africa. To conclude, it was found that South Africa has a very important role to play in attracting global FDI to Africa, as it has an accessible market based on geographic location, trade channels and traditional linkages with African and European networks.
- Full Text:
- Date Issued: 2019
- Authors: Van der Berg, Jan Gabriel Mara
- Date: 2019
- Subjects: Investments, Foreign -- South Africa , Business enterprises Business Organisations Industrial promotion
- Language: English
- Type: Thesis , Doctoral , DPhil
- Identifier: http://hdl.handle.net/10948/44213 , vital:37131
- Description: One of the major driving forces behind international trade over the past thirty years has been Foreign Direct Investment (FDI). Due to the importance of FDI, a vast amount of research has been conducted on the various elements that make up FDI. There has also been widespread research done to measure the impact of FDI on host countries, and attempts have been made to determine the long-term benefits thereof. Despite the existent research on FDI, there is a dearth of literature on the unique situation in South Africa (due to the country’s fragmented past) and the impact of FDI on the South African economy. This study attempts to address this research gap and to add to the existent body of knowledge on FDI market entry. Thus, the primary objective of this study was to examine the impact of multinational corporations (MNCs) in promoting the entry of FDIs in South Africa, and the effectiveness of these investments in the South African business environment. The comprehensive literature review in this study included a discussion of the background to the pre- and post-apartheid South African economy, and the various efforts made by the South African government to facilitate sustainable economic growth through various economic policies. FDI was identified as one of the four major indicators of economic growth and was therefore investigated as a concept, strategy and driver of change. The South African marketing environment was analysed in order to assist in the identification of variables that are conducive to FDI. The final section of the literature review utilised three cases to better illustrate and understand the different challenges, market entry strategies and long-term implications of FDI. In this study, the independent variables (international marketing environment, stakeholder intervention, government considerations, resources and FDI incentives) were identified as influencing the mediating variable (FDI market entry strategy) and the dependent variables (competitiveness, sustainability, trade agreements and commitment of traders). These independent variables were selected to construct a hypothesised model and the research hypotheses. To this end, an empirical investigation was conducted, the measuring instrument used in this investigation was a questionnaire, which was assembled with the help of insights gained from secondary sources. The study respondents were selected through convenience sampling. A total of 210 respondents participated in the study, and 165 useable questionnaires were subjected to statistical analysis. The data collected for this study was subjected to five phases of analysis: exploratory factor analysis to assess validity; Cronbach’s alpha was used to test for internal consistency reliability; descriptive statistics to describe the fundamental features of the data by providing a statistical summary and analysis; and the nine hypotheses pertaining to the relationships between different variables were assessed using inferential statistical procedures, Pearson’s product correlation and regression analysis. This led to the adaptation of the hypothesised model and the hypotheses so as to indicate the changes resulting from the EFA. The findings of this study reveals that external stakeholder intervention as well as FDI incentives and resources effectively influence FDI market entry strategy in the South African business environment. The study results further reveal that the promotion of FDI market entry strategy positively influences competitiveness, sustainability, trade agreements and commitment of traders in the South African business environment. For MNCs to be successful in the expansion of FDI market entry strategy in the South African business environment, the study recommends that it is important to consider the availability of potential local partners, proximity to trading routes, reduction of the costs involved in supplying the market, the effect of tariff barriers and a competitive domestic economy. It is further recommended that MNCs need to focus on the utilisation of reliable and effective equipment in order to enable the productive management of operations in the South African business environment. The study also recommends the South African business environment as a strategic investment destination for the promotion of FDI market entry strategy as it offers low production costs in particular trading locations. This study has contributed to the field of FDI and the FDI market entry strategies employed by MNCs in South Africa. The research findings identified the international marketing (SLEPTS) factors through an assessment of the South African marketing environment, as these factors are deemed important for FDI to occur. The study also highlights the critical international marketing factors that could be used to improve local conditions through a mixture of incentives and policy re-alignment, so as to be more conducive to attracting large scale FDI. The hypothesised model developed for this study contributed to identifying the influence of external stakeholders on the successful market entry of FDI into South Africa, a critical element that MNCs usually only identify after market entry is complete. Evidence from the study shows that the South African government should direct FDI incentives towards those sectors in the economy that stand to benefit the most from the spill-over effects of FDI, in order to maximise the impact of FDI on the local economy. The research also indicates that elements such as restrictive legislation and government corruption may, to a certain degree, hinder FDI; therefore, these issues need to be addressed through legislation. It is recommended that all local efforts to attract FDI are industry or sector focussed, and that they are guided by government policies towards the greater benefit of the South African economy. Furthermore, the study found that the relationship between the host country and the MNC is critical to achieving sustainability in the long-term; therefore, it is suggested that the South African government improves its relationship with local businesses and MNCs that are looking to invest in South Africa. To conclude, it was found that South Africa has a very important role to play in attracting global FDI to Africa, as it has an accessible market based on geographic location, trade channels and traditional linkages with African and European networks.
- Full Text:
- Date Issued: 2019
The impact of foreign direct investment (FDI) on economic growth in South Africa
- Authors: Ansong, Ama Yiadomaa
- Date: 2018
- Subjects: Investments, Foreign -- South Africa , Infrastructure (Economics) -- South Africa Gross domestic product -- South Africa Economic development -- South Africa South Africa -- Economic conditions
- Language: English
- Type: Thesis , Masters , MPhil
- Identifier: http://hdl.handle.net/10948/21494 , vital:29527
- Description: Numerous studies have investigated FDI and the possible benefits for African countries in terms of job creation opportunities, technology transfers, growth and development. Despite these potential benefits, FDI also has its negative effects on the host country in terms of market dominance, profit repatriation and loss of tax revenue if tax incentives are offered. In an effort to attract more FDI, host countries have undertaken various policy incentives to attract foreign investors. This study examines the trends and determinants of FDI flows to South Africa and other African countries. The period chosen for this study is from 1990- 2016. The study commences with a background study of FDI and GDP. Various literature offerings and different schools of thought with regard to FDI are also deliberated. To offer a better understanding of the relationship between FDI and GDP, econometric estimation was employed. The econometric estimation methods employed were, Unit Root, Johansen Cointegration, Vector Error Correction (VECM), Impulse Response Test, Variance Decomposition and the Granger Causality Test. Based on Granger causality test it can be concluded that South Africa’s economic growth attracts FDI and not vice versa. South Africa must therefore focus on growing its economy to attract more FDI.
- Full Text:
- Date Issued: 2018
- Authors: Ansong, Ama Yiadomaa
- Date: 2018
- Subjects: Investments, Foreign -- South Africa , Infrastructure (Economics) -- South Africa Gross domestic product -- South Africa Economic development -- South Africa South Africa -- Economic conditions
- Language: English
- Type: Thesis , Masters , MPhil
- Identifier: http://hdl.handle.net/10948/21494 , vital:29527
- Description: Numerous studies have investigated FDI and the possible benefits for African countries in terms of job creation opportunities, technology transfers, growth and development. Despite these potential benefits, FDI also has its negative effects on the host country in terms of market dominance, profit repatriation and loss of tax revenue if tax incentives are offered. In an effort to attract more FDI, host countries have undertaken various policy incentives to attract foreign investors. This study examines the trends and determinants of FDI flows to South Africa and other African countries. The period chosen for this study is from 1990- 2016. The study commences with a background study of FDI and GDP. Various literature offerings and different schools of thought with regard to FDI are also deliberated. To offer a better understanding of the relationship between FDI and GDP, econometric estimation was employed. The econometric estimation methods employed were, Unit Root, Johansen Cointegration, Vector Error Correction (VECM), Impulse Response Test, Variance Decomposition and the Granger Causality Test. Based on Granger causality test it can be concluded that South Africa’s economic growth attracts FDI and not vice versa. South Africa must therefore focus on growing its economy to attract more FDI.
- Full Text:
- Date Issued: 2018
The impact of portfolio investment on economic growth in South Africa
- Authors: Tenderere, Morris
- Date: 2015-01
- Subjects: Investments, Foreign -- South Africa , Portfolio management , Capital market
- Language: English
- Type: text
- Identifier: http://hdl.handle.net/10353/25603 , vital:64338
- Description: The main objective of this study was to investigate the impact of foreign portfolio investmenton economic growth in South Africa. South Africa, just like other several developing countries has recorded large capital inflows in recent years, reversing a trend of outflows. Much of this new capital inflow has been in the form of portfolio investment. This has been attributed to large domestic capital markets in South Africa. This surge in portfolio flows has raised the question whether these flows will be sustained or will instead be reversed in the near future. Some observers argue that the recent flows are inherently unsustainable because in many cases they have short maturities. In light of this, this study, then, sought to establish the impact of portfolio investment on economic growth in South Africa. The study used annual data from 1990 to 2012. The data was tested for stationarity using the Phillips Perron and Augmented Dickey–Fuller tests. This was followed by cointegration, after which thevector error correction modelling was carried out. Diagnostic checks, impulse response and variable decomposition were also conducted. Estimation results revealed that there is a positive relationship between foreign portfolio investments and economic growth in South Africa. The study recommended that the SARB and the government should remove all impediments that make it hard for foreign investors to invest in South Africa. The SARB should also keep interest rates at a rate that is high enough to attract foreign portfolios into South Africa. , Thesis (MCom) -- Faculty of Management and Commerce, 2015
- Full Text:
- Date Issued: 2015-01
- Authors: Tenderere, Morris
- Date: 2015-01
- Subjects: Investments, Foreign -- South Africa , Portfolio management , Capital market
- Language: English
- Type: text
- Identifier: http://hdl.handle.net/10353/25603 , vital:64338
- Description: The main objective of this study was to investigate the impact of foreign portfolio investmenton economic growth in South Africa. South Africa, just like other several developing countries has recorded large capital inflows in recent years, reversing a trend of outflows. Much of this new capital inflow has been in the form of portfolio investment. This has been attributed to large domestic capital markets in South Africa. This surge in portfolio flows has raised the question whether these flows will be sustained or will instead be reversed in the near future. Some observers argue that the recent flows are inherently unsustainable because in many cases they have short maturities. In light of this, this study, then, sought to establish the impact of portfolio investment on economic growth in South Africa. The study used annual data from 1990 to 2012. The data was tested for stationarity using the Phillips Perron and Augmented Dickey–Fuller tests. This was followed by cointegration, after which thevector error correction modelling was carried out. Diagnostic checks, impulse response and variable decomposition were also conducted. Estimation results revealed that there is a positive relationship between foreign portfolio investments and economic growth in South Africa. The study recommended that the SARB and the government should remove all impediments that make it hard for foreign investors to invest in South Africa. The SARB should also keep interest rates at a rate that is high enough to attract foreign portfolios into South Africa. , Thesis (MCom) -- Faculty of Management and Commerce, 2015
- Full Text:
- Date Issued: 2015-01
The impact of financial development on private investment in south Africa
- Authors: Mukuya, Prisca R
- Date: 2014
- Subjects: Economic development -- South Africa , Gross domestic product -- South Africa , Investments, Foreign -- South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11488 , http://hdl.handle.net/10353/d1018210 , Economic development -- South Africa , Gross domestic product -- South Africa , Investments, Foreign -- South Africa
- Description: Empirical evidence and theoretical propositions suggest that financial development is strongly correlated to private investment because financial development positively affects investments by affecting capital accumulation, altering savings rate or by channelizing savings to various capital producing technologies. This study empirically investigated the impact of financial development on private investment in South Africa using quarterly data for the period 1994/01 to 2011/04. This study assess whether the theoretical and empirical propositions can be supported in South Africa. Cointegration tests using the Johansen approach (1988) were conducted to examine if there is a stable relationship in the level of private investment and financial development in South Africa. As a proxy for financial sector development, credit to private sector as per cent of GDP and stock market development were employed. Other variables that affect investment such as real interest rates and real GDP were also included in the model. Results of the study indicate that stock market development and real GDP have a positive relationship with private investment. Bank credit to the private sector however showed a negative relationship with private investment. A negative relationship was also noted for the relationship between private investment and real interest rates.
- Full Text:
- Date Issued: 2014
- Authors: Mukuya, Prisca R
- Date: 2014
- Subjects: Economic development -- South Africa , Gross domestic product -- South Africa , Investments, Foreign -- South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11488 , http://hdl.handle.net/10353/d1018210 , Economic development -- South Africa , Gross domestic product -- South Africa , Investments, Foreign -- South Africa
- Description: Empirical evidence and theoretical propositions suggest that financial development is strongly correlated to private investment because financial development positively affects investments by affecting capital accumulation, altering savings rate or by channelizing savings to various capital producing technologies. This study empirically investigated the impact of financial development on private investment in South Africa using quarterly data for the period 1994/01 to 2011/04. This study assess whether the theoretical and empirical propositions can be supported in South Africa. Cointegration tests using the Johansen approach (1988) were conducted to examine if there is a stable relationship in the level of private investment and financial development in South Africa. As a proxy for financial sector development, credit to private sector as per cent of GDP and stock market development were employed. Other variables that affect investment such as real interest rates and real GDP were also included in the model. Results of the study indicate that stock market development and real GDP have a positive relationship with private investment. Bank credit to the private sector however showed a negative relationship with private investment. A negative relationship was also noted for the relationship between private investment and real interest rates.
- Full Text:
- Date Issued: 2014
Why has South Africa been relatively unsuccessful at attracting inward foreign direct investment since 1994?
- Authors: Fulton, Mark Hugh John
- Date: 2014
- Subjects: Investments, Foreign -- South Africa , Investments, Foreign -- Africa, Southern , Investments, Foreign -- Chile , Investments, Foreign -- Botswana , Economic development -- South Africa , Economic development -- Developing countries , Political corruption -- Economic aspects -- South Africa , South Africa -- Economic policy -- 1994-
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:1097 , http://hdl.handle.net/10962/d1013056
- Description: Foreign Direct Investment (FDI) flows into South Africa have been very low for several decades, and this research examines the reason(s) why this has been the case since 1994. There is a common belief amongst economists that there is a positive relationship between the amount of FDI received and economic growth, thus the desire to attract greater FDI inflows. A literature review was conducted to establish the determinants of FDI globally and then data were collected and assessed to test which causes are most important. The performance of developing nations in attracting FDI was first compared with that of the developed nations. Thereafter, a regional breakdown of FDI flows was presented, with a particular focus on the Southern African region. FDI inflows to South Africa since 1994 were compared against the identified determinants of FDI, as well as with FDI inflows into two other major mining economies, Chile and Botswana. The friendliness of the government towards business was identified as a significant determinant of FDI inflows and the importance of this factor in explaining FDI inflows into environment in South Africa was looked at in more depth. It was found that many investors perceive the South African government as hostile towards business and as corrupt and/or inefficient. The empirical results show that this negative perception helps explain the FDI inflows attracted by South Africa since 1994. Therefore, increased friendliness to business by the government should increase future inward FDI flows into South Africa.
- Full Text:
- Date Issued: 2014
- Authors: Fulton, Mark Hugh John
- Date: 2014
- Subjects: Investments, Foreign -- South Africa , Investments, Foreign -- Africa, Southern , Investments, Foreign -- Chile , Investments, Foreign -- Botswana , Economic development -- South Africa , Economic development -- Developing countries , Political corruption -- Economic aspects -- South Africa , South Africa -- Economic policy -- 1994-
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:1097 , http://hdl.handle.net/10962/d1013056
- Description: Foreign Direct Investment (FDI) flows into South Africa have been very low for several decades, and this research examines the reason(s) why this has been the case since 1994. There is a common belief amongst economists that there is a positive relationship between the amount of FDI received and economic growth, thus the desire to attract greater FDI inflows. A literature review was conducted to establish the determinants of FDI globally and then data were collected and assessed to test which causes are most important. The performance of developing nations in attracting FDI was first compared with that of the developed nations. Thereafter, a regional breakdown of FDI flows was presented, with a particular focus on the Southern African region. FDI inflows to South Africa since 1994 were compared against the identified determinants of FDI, as well as with FDI inflows into two other major mining economies, Chile and Botswana. The friendliness of the government towards business was identified as a significant determinant of FDI inflows and the importance of this factor in explaining FDI inflows into environment in South Africa was looked at in more depth. It was found that many investors perceive the South African government as hostile towards business and as corrupt and/or inefficient. The empirical results show that this negative perception helps explain the FDI inflows attracted by South Africa since 1994. Therefore, increased friendliness to business by the government should increase future inward FDI flows into South Africa.
- Full Text:
- Date Issued: 2014
Foreign direct investment and socio-economic development : the South African example
- Authors: Mukosera, Precious Sipho
- Date: 2013
- Subjects: Investments, Foreign -- South Africa , Investments, Foreign -- Government policy -- South Africa , South Africa -- Economic policy , South Africa -- Economic conditions
- Language: English
- Type: Thesis , Masters , MA
- Identifier: vital:9142 , http://hdl.handle.net/10948/d1018760
- Description: It is widely accepted by governments of many developing countries that Foreign Direct Investment (FDI) is crucial to the socio-economic development of their nations and have developed various policies in an effort to attract FDI, as a result. FDI is a crucial source of technology, capital and skills for developing countries for economic growth that may ultimately lead to poverty reduction, employment creation and modernisation. However, results from many studies have been inconclusive and have failed to find a direct link between the increase of FDI and the associated socio-economic development of recipient nations. South Africa is no exception to this debate as it seeks to turn its back on decades long apartheid, which has entrenched poverty in the majority of its population and exacerbated social tensions. The main socio-economic challenges that South Africa faces include high unemployment, skills shortages, poverty and high inequality, and the 2008/2009 global financial and economic crisis has exacerbated the crisis. Despite these challenges South Africa‘s macro-economic strategies have had a good reputation since 2000. The monetary policy has turned out to be more transparent and predictable, and a sound fiscal policy has sustained its framework. The study analyses the role that FDI plays in the socio-economic development of South Africa since 1995 by focusing on selected case studies: ABSA Bank, General Motors South Africa (GMSA) and the Mining Sector of South Africa. The research concludes that although ABSA Bank has implemented several corporate social responsibility (CSR), and various employee development programmes, there is hardly any evidence to suggest that Barclays Bank‘s takeover of ABSA Bank has positively impacted on these programmes. General Motors South Africa (GMSA), which came into South Africa many decades ago through a Greenfield Investment, has played a positive role in the economy of the Eastern Cape Province as well as that of South Africa, having created jobs directly and indirectly. The company has also designed and implemented various educational, housing as well as health and awareness programmes for its employees and for the communities. Mining companies that operate in South Africa formed partnerships in the communities in which they operate in an effort to improve the lives of people. While these various projects have been a source of employment, they have had a limited impact on the core causes of social problems surrounding the mines. Many of these root causes relate to core business practices of the mining companies, especially employee recruitment, wages and housing. These root causes where witnessed in the Lonmin tragedy and in other strikes that spread throughout the sector in 2012. The study concludes that although FDI does play a role in the socio-economic development of South Africa, especially Greenfield investment, the same argument could not be made on Mergers and acquisitions (M&As). Finally, the South African government needs to play a proactive role in ensuring that foreign companies that invest in the country need to be well aware of the socio-economic needs of South Africa, and be willing to play a positive role in that regard.
- Full Text:
- Date Issued: 2013
- Authors: Mukosera, Precious Sipho
- Date: 2013
- Subjects: Investments, Foreign -- South Africa , Investments, Foreign -- Government policy -- South Africa , South Africa -- Economic policy , South Africa -- Economic conditions
- Language: English
- Type: Thesis , Masters , MA
- Identifier: vital:9142 , http://hdl.handle.net/10948/d1018760
- Description: It is widely accepted by governments of many developing countries that Foreign Direct Investment (FDI) is crucial to the socio-economic development of their nations and have developed various policies in an effort to attract FDI, as a result. FDI is a crucial source of technology, capital and skills for developing countries for economic growth that may ultimately lead to poverty reduction, employment creation and modernisation. However, results from many studies have been inconclusive and have failed to find a direct link between the increase of FDI and the associated socio-economic development of recipient nations. South Africa is no exception to this debate as it seeks to turn its back on decades long apartheid, which has entrenched poverty in the majority of its population and exacerbated social tensions. The main socio-economic challenges that South Africa faces include high unemployment, skills shortages, poverty and high inequality, and the 2008/2009 global financial and economic crisis has exacerbated the crisis. Despite these challenges South Africa‘s macro-economic strategies have had a good reputation since 2000. The monetary policy has turned out to be more transparent and predictable, and a sound fiscal policy has sustained its framework. The study analyses the role that FDI plays in the socio-economic development of South Africa since 1995 by focusing on selected case studies: ABSA Bank, General Motors South Africa (GMSA) and the Mining Sector of South Africa. The research concludes that although ABSA Bank has implemented several corporate social responsibility (CSR), and various employee development programmes, there is hardly any evidence to suggest that Barclays Bank‘s takeover of ABSA Bank has positively impacted on these programmes. General Motors South Africa (GMSA), which came into South Africa many decades ago through a Greenfield Investment, has played a positive role in the economy of the Eastern Cape Province as well as that of South Africa, having created jobs directly and indirectly. The company has also designed and implemented various educational, housing as well as health and awareness programmes for its employees and for the communities. Mining companies that operate in South Africa formed partnerships in the communities in which they operate in an effort to improve the lives of people. While these various projects have been a source of employment, they have had a limited impact on the core causes of social problems surrounding the mines. Many of these root causes relate to core business practices of the mining companies, especially employee recruitment, wages and housing. These root causes where witnessed in the Lonmin tragedy and in other strikes that spread throughout the sector in 2012. The study concludes that although FDI does play a role in the socio-economic development of South Africa, especially Greenfield investment, the same argument could not be made on Mergers and acquisitions (M&As). Finally, the South African government needs to play a proactive role in ensuring that foreign companies that invest in the country need to be well aware of the socio-economic needs of South Africa, and be willing to play a positive role in that regard.
- Full Text:
- Date Issued: 2013
The impact of foreign debt on economic growth in South Africa
- Authors: Shayanewako, V B
- Date: 2013
- Subjects: Debts, External -- South Africa -- Eastern Cape , Investments, Foreign -- South Africa , Government spending policy -- South Africa , Economic development -- South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11477 , http://hdl.handle.net/10353/d1015140 , Debts, External -- South Africa -- Eastern Cape , Investments, Foreign -- South Africa , Government spending policy -- South Africa , Economic development -- South Africa
- Description: This study analyses the economic impact between foreign debt and economic growth in South Africa. By fitting a production function model to annual data for the period 1980-2011, the study examines the dynamic effect of debt service, capital stock and labour force on the economic growth of the country. By following Cunningham (1993), it has identified the long-run and short-run causal relationships among the included variables. The results indicate that the debt servicing burden has a negative effect on the productivity of labour and capital, and thereby affect economic growth adversely. The results also illustrate that the debt service ratio tends to negatively affect GDP and the rate of economic growth in the long-run, which, in turn, reduces the ability of the country to service its debt. Similarly, the estimated error correction term shows the existence of a significant long-run causal relationship among the specified variables. Overall, the results suggest the existence of short-run and long-run causal relationships running from debt service to GDP.
- Full Text:
- Date Issued: 2013
- Authors: Shayanewako, V B
- Date: 2013
- Subjects: Debts, External -- South Africa -- Eastern Cape , Investments, Foreign -- South Africa , Government spending policy -- South Africa , Economic development -- South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11477 , http://hdl.handle.net/10353/d1015140 , Debts, External -- South Africa -- Eastern Cape , Investments, Foreign -- South Africa , Government spending policy -- South Africa , Economic development -- South Africa
- Description: This study analyses the economic impact between foreign debt and economic growth in South Africa. By fitting a production function model to annual data for the period 1980-2011, the study examines the dynamic effect of debt service, capital stock and labour force on the economic growth of the country. By following Cunningham (1993), it has identified the long-run and short-run causal relationships among the included variables. The results indicate that the debt servicing burden has a negative effect on the productivity of labour and capital, and thereby affect economic growth adversely. The results also illustrate that the debt service ratio tends to negatively affect GDP and the rate of economic growth in the long-run, which, in turn, reduces the ability of the country to service its debt. Similarly, the estimated error correction term shows the existence of a significant long-run causal relationship among the specified variables. Overall, the results suggest the existence of short-run and long-run causal relationships running from debt service to GDP.
- Full Text:
- Date Issued: 2013
The effect of foreign direct investment on economic growth: evidence from South Africa
- Authors: Mazenda, Adrino
- Date: 2012
- Subjects: International Monetary Fund , Investments, Foreign -- South Africa , Economic development -- South Africa , International finance , Finance -- Developing countries
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11462 , http://hdl.handle.net/10353/d1007027 , International Monetary Fund , Investments, Foreign -- South Africa , Economic development -- South Africa , International finance , Finance -- Developing countries
- Description: Foreign direct investment amongst other mechanisms provides capital inflow meant to stimulate economic growth. Apart from promoting economic growth, FDI can also lead to increase in employment, technology, technical knowhow and managerial skills. South Africa has implemented various policy initiatives in attempts to attract foreign investment. This study investigates on the effect of foreign direct investment on economic growth, with particular reference to the South African economy. The period of study is from 1980 to 2010. The study begins by reviewing literature on economic growth and foreign direct investment. South Africa’s macroeconomic background is examined to determine the trends in FDI inflows and economic growth. An empirical model linking theoretical and empirical literature on the effect of FDI on economic growth is estimated using the Johansen cointegration and VECM framework. Variables specified in the methodology include real gross domestic product (RGDP), foreign direct investment (FDI), domestic investment (INVE), real exchange rate (REXCH) and foreign marketable debt (DEBT). The long run results showed that FDI, REXCH and DEBT have a negative impact on growth. INVE has a positive impact on growth. Short run results indicated that there is no strong pressure on RGDP to restore long-run equilibrium whenever there is a disturbance. The short run lag of FDI was found to exert a positive impact on growth. The impulse response and variance decomposition analysis complemented the long and short-run findings. Shocks on REXCH, and DEBT generated a negative response on RGDP. The shocks were not significantly different from zero and were transitory. Results from the variance decomposition analysis revealed that the fundamentals explain some, but not all, of the variations of RGDP. For the fifth year forecast error variance RGDP explains the largest component of the variation followed by INVE, REXCH, FDI and DEBT. After a period of ten years, the influence of RGDP and INVE declines, whereas REXCH, FDI and DEBT increase. Conclusions and policy recommendations were made using these results.
- Full Text:
- Date Issued: 2012
- Authors: Mazenda, Adrino
- Date: 2012
- Subjects: International Monetary Fund , Investments, Foreign -- South Africa , Economic development -- South Africa , International finance , Finance -- Developing countries
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11462 , http://hdl.handle.net/10353/d1007027 , International Monetary Fund , Investments, Foreign -- South Africa , Economic development -- South Africa , International finance , Finance -- Developing countries
- Description: Foreign direct investment amongst other mechanisms provides capital inflow meant to stimulate economic growth. Apart from promoting economic growth, FDI can also lead to increase in employment, technology, technical knowhow and managerial skills. South Africa has implemented various policy initiatives in attempts to attract foreign investment. This study investigates on the effect of foreign direct investment on economic growth, with particular reference to the South African economy. The period of study is from 1980 to 2010. The study begins by reviewing literature on economic growth and foreign direct investment. South Africa’s macroeconomic background is examined to determine the trends in FDI inflows and economic growth. An empirical model linking theoretical and empirical literature on the effect of FDI on economic growth is estimated using the Johansen cointegration and VECM framework. Variables specified in the methodology include real gross domestic product (RGDP), foreign direct investment (FDI), domestic investment (INVE), real exchange rate (REXCH) and foreign marketable debt (DEBT). The long run results showed that FDI, REXCH and DEBT have a negative impact on growth. INVE has a positive impact on growth. Short run results indicated that there is no strong pressure on RGDP to restore long-run equilibrium whenever there is a disturbance. The short run lag of FDI was found to exert a positive impact on growth. The impulse response and variance decomposition analysis complemented the long and short-run findings. Shocks on REXCH, and DEBT generated a negative response on RGDP. The shocks were not significantly different from zero and were transitory. Results from the variance decomposition analysis revealed that the fundamentals explain some, but not all, of the variations of RGDP. For the fifth year forecast error variance RGDP explains the largest component of the variation followed by INVE, REXCH, FDI and DEBT. After a period of ten years, the influence of RGDP and INVE declines, whereas REXCH, FDI and DEBT increase. Conclusions and policy recommendations were made using these results.
- Full Text:
- Date Issued: 2012
The impact of private capital flows on economic growth in South Africa
- Authors: Dzangare, Gillian
- Date: 2012
- Subjects: Economic development -- South Africa , Capital movements -- South Africa , Investments, Foreign -- South Africa , Development economics -- South Africa , Interest rates -- South Africa , Free trade -- South Africa , Cointegration -- South Africa , South Africa -- Commercial policy
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11472 , http://hdl.handle.net/10353/d1007134 , Economic development -- South Africa , Capital movements -- South Africa , Investments, Foreign -- South Africa , Development economics -- South Africa , Interest rates -- South Africa , Free trade -- South Africa , Cointegration -- South Africa , South Africa -- Commercial policy
- Description: In this study an analysis of the long-term equilibrium relationship between economic growth measured as real GDP growth and private capital inflows is explored. The link between private capital inflows and economic growth is well-documented in the literature. However, a void in the literature relates to examining the cointegrating relationship between private capital inflows and economic growth particularly for South Africa. It is widely claimed that private capital inflows foster economic growth by closing the savings/investment gap. However, clarity on this point is necessary because of the seemingly unclear nature of the relationship in the literature. The exact form of this relationship as well as the nature of capital flows that could impact on real growth requires further investigation. Moreover, what exactly happens to this relationship in an economic crisis such as recently recorded in the global financial crisis is not clear. The analysis is undertaken by employing cointegration and vector error correction modeling approach using quarterly data for the period 1989q4-2009q4. This study employs the Johansen (1998) cointegration test. This technique distinguishes itself since it establishes the long run relationship between variables. Thereafter, residual diagnostic checks are performed on the variables. Our results show among others, that private capital inflows have impacted positively on the growth of the South African economy. The areas for further research that emerge from this study include the effect of some government policies on economic growth that should also receive more attention in the future since political instability slows down investment.
- Full Text:
- Date Issued: 2012
- Authors: Dzangare, Gillian
- Date: 2012
- Subjects: Economic development -- South Africa , Capital movements -- South Africa , Investments, Foreign -- South Africa , Development economics -- South Africa , Interest rates -- South Africa , Free trade -- South Africa , Cointegration -- South Africa , South Africa -- Commercial policy
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11472 , http://hdl.handle.net/10353/d1007134 , Economic development -- South Africa , Capital movements -- South Africa , Investments, Foreign -- South Africa , Development economics -- South Africa , Interest rates -- South Africa , Free trade -- South Africa , Cointegration -- South Africa , South Africa -- Commercial policy
- Description: In this study an analysis of the long-term equilibrium relationship between economic growth measured as real GDP growth and private capital inflows is explored. The link between private capital inflows and economic growth is well-documented in the literature. However, a void in the literature relates to examining the cointegrating relationship between private capital inflows and economic growth particularly for South Africa. It is widely claimed that private capital inflows foster economic growth by closing the savings/investment gap. However, clarity on this point is necessary because of the seemingly unclear nature of the relationship in the literature. The exact form of this relationship as well as the nature of capital flows that could impact on real growth requires further investigation. Moreover, what exactly happens to this relationship in an economic crisis such as recently recorded in the global financial crisis is not clear. The analysis is undertaken by employing cointegration and vector error correction modeling approach using quarterly data for the period 1989q4-2009q4. This study employs the Johansen (1998) cointegration test. This technique distinguishes itself since it establishes the long run relationship between variables. Thereafter, residual diagnostic checks are performed on the variables. Our results show among others, that private capital inflows have impacted positively on the growth of the South African economy. The areas for further research that emerge from this study include the effect of some government policies on economic growth that should also receive more attention in the future since political instability slows down investment.
- Full Text:
- Date Issued: 2012
Determinants of foreign direct investments in the motor industry in South Africa
- Authors: Onceya, Siyabulela
- Date: 2011
- Subjects: Investments, Foreign -- South Africa , Automobile industry and trade -- South Africa , Motor industry -- South Africa , Industrial policy -- South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11459 , http://hdl.handle.net/10353/545 , Investments, Foreign -- South Africa , Automobile industry and trade -- South Africa , Motor industry -- South Africa , Industrial policy -- South Africa
- Description: The recent surge in foreign capital inflows into developing countries has generated interest among researchers wanting to analyse the major determinants of Foreign Direct Investments in the motor industry (FDIsm). This dissertation investigates the determinants of FDI in the motor industry in South Africa. The underpinning theoretical literature in this study is the Micro-level theory of FDI and the Eclectic theory as well as empirical literature from several authors. The study used quarterly time series data, which covers the period 1994q1- 2008q4. FDIs are modeled as the function of economic growth, interest rates, exchange rate, education and the openness of the country. The variables in the model are tested for stationarity. Cointegration analysis was also used to test for long run relationships between the variables. The trace and the maximum eigenvalue tests suggest that there are at least two cointegration relationships, an error correction modelling technique is used to establish the determinants of foreign direct investment. The error correction model was estimated which provided both long run and short run parameter estimates. The results show that economic growth, education and the openness of the country are positively related to foreign direct investment in the motor industry. Interest rates and exchange rates negatively affect foreign direct investment in the motor industry in South Africa. The results of this study are also supported by the impulse response and variance decomposition tests. The policy recommendation that emanate from this study is that efforts should be made to boost the level of economic growth in order to enhance and attract more foreign investors. It is therefore important for the government to purse policies that will encourage economic growth.
- Full Text:
- Date Issued: 2011
- Authors: Onceya, Siyabulela
- Date: 2011
- Subjects: Investments, Foreign -- South Africa , Automobile industry and trade -- South Africa , Motor industry -- South Africa , Industrial policy -- South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11459 , http://hdl.handle.net/10353/545 , Investments, Foreign -- South Africa , Automobile industry and trade -- South Africa , Motor industry -- South Africa , Industrial policy -- South Africa
- Description: The recent surge in foreign capital inflows into developing countries has generated interest among researchers wanting to analyse the major determinants of Foreign Direct Investments in the motor industry (FDIsm). This dissertation investigates the determinants of FDI in the motor industry in South Africa. The underpinning theoretical literature in this study is the Micro-level theory of FDI and the Eclectic theory as well as empirical literature from several authors. The study used quarterly time series data, which covers the period 1994q1- 2008q4. FDIs are modeled as the function of economic growth, interest rates, exchange rate, education and the openness of the country. The variables in the model are tested for stationarity. Cointegration analysis was also used to test for long run relationships between the variables. The trace and the maximum eigenvalue tests suggest that there are at least two cointegration relationships, an error correction modelling technique is used to establish the determinants of foreign direct investment. The error correction model was estimated which provided both long run and short run parameter estimates. The results show that economic growth, education and the openness of the country are positively related to foreign direct investment in the motor industry. Interest rates and exchange rates negatively affect foreign direct investment in the motor industry in South Africa. The results of this study are also supported by the impulse response and variance decomposition tests. The policy recommendation that emanate from this study is that efforts should be made to boost the level of economic growth in order to enhance and attract more foreign investors. It is therefore important for the government to purse policies that will encourage economic growth.
- Full Text:
- Date Issued: 2011
Trends and determinants of inward foreign direct investment to South Africa
- Authors: Rusike, Tatonga Gardner
- Date: 2008
- Subjects: International business enterprises -- South Africa , Investments, Foreign -- South Africa , Economic development -- South Africa , Macroeconomics -- South Africa , Foreign exchange rates -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:995 , http://hdl.handle.net/10962/d1002730 , International business enterprises -- South Africa , Investments, Foreign -- South Africa , Economic development -- South Africa , Macroeconomics -- South Africa , Foreign exchange rates -- South Africa
- Description: Foreign direct investment (FDI) is seen as a way to provide the needed capital inflow to stimulate growth in a domestic economy. FDI can also result in increased employment levels, managerial skills and increase in technology. In efforts to attract FDI, host countries have undertaken various policy incentives to attract foreign investors. This study analyses the trends and determinants of inward FDI to South Africa for the period 1975-2005. The study starts by reviewing FDI literature on its determinants and provides the macroeconomic background and FDI related policies undertaken in South Africa. The trend and sectoral analysis provides the actual nature of FDI flows to South Africa. An empirical model linking theoretical and empirical determinants of FDI is estimated using the Johansen cointegration and VECM framework. The study also augments the cointegration framework with impulse response and variance decomposition analyses to complement the long and short run determinants of FDI. Dummy variables are used in each of the estimated FDI models to take into account the possibility of structural breaks. Results show that relative to the size of the economy and to other developing countries, South Africa still receives low levels of inward FDI. Only are few years are exceptional i.e. 1997, 2001 and 2005. From the sectoral distribution, the financial sector is now the major recipient of FDI followed by the mining and manufacturing sectors. The emergence of the financial sector could suggest that FDI motives could have shifted from the natural resource seeking and market seeking to efficiency seeking FDI. The United Kingdom emerges as the major source of FDI to South Africa followed by United States of America and Germany. Empirical analysis indicated that openness, exchange rate and financial development are important long run determinants of FDI. Increased openness and financial development attract FDI while an increase (depreciation) in the exchange rate deters FDI to South Africa. Market size emerges as a short run determinant of FDI although it is declining in importance. Most of the impulse response analysis confirmed the VECM findings. Variance decomposition analysis showed that FDI itself, imports and exchange rate explain a significant amount of the forecast error variance. The influence of market size variable is small and declining over time.
- Full Text:
- Date Issued: 2008
- Authors: Rusike, Tatonga Gardner
- Date: 2008
- Subjects: International business enterprises -- South Africa , Investments, Foreign -- South Africa , Economic development -- South Africa , Macroeconomics -- South Africa , Foreign exchange rates -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:995 , http://hdl.handle.net/10962/d1002730 , International business enterprises -- South Africa , Investments, Foreign -- South Africa , Economic development -- South Africa , Macroeconomics -- South Africa , Foreign exchange rates -- South Africa
- Description: Foreign direct investment (FDI) is seen as a way to provide the needed capital inflow to stimulate growth in a domestic economy. FDI can also result in increased employment levels, managerial skills and increase in technology. In efforts to attract FDI, host countries have undertaken various policy incentives to attract foreign investors. This study analyses the trends and determinants of inward FDI to South Africa for the period 1975-2005. The study starts by reviewing FDI literature on its determinants and provides the macroeconomic background and FDI related policies undertaken in South Africa. The trend and sectoral analysis provides the actual nature of FDI flows to South Africa. An empirical model linking theoretical and empirical determinants of FDI is estimated using the Johansen cointegration and VECM framework. The study also augments the cointegration framework with impulse response and variance decomposition analyses to complement the long and short run determinants of FDI. Dummy variables are used in each of the estimated FDI models to take into account the possibility of structural breaks. Results show that relative to the size of the economy and to other developing countries, South Africa still receives low levels of inward FDI. Only are few years are exceptional i.e. 1997, 2001 and 2005. From the sectoral distribution, the financial sector is now the major recipient of FDI followed by the mining and manufacturing sectors. The emergence of the financial sector could suggest that FDI motives could have shifted from the natural resource seeking and market seeking to efficiency seeking FDI. The United Kingdom emerges as the major source of FDI to South Africa followed by United States of America and Germany. Empirical analysis indicated that openness, exchange rate and financial development are important long run determinants of FDI. Increased openness and financial development attract FDI while an increase (depreciation) in the exchange rate deters FDI to South Africa. Market size emerges as a short run determinant of FDI although it is declining in importance. Most of the impulse response analysis confirmed the VECM findings. Variance decomposition analysis showed that FDI itself, imports and exchange rate explain a significant amount of the forecast error variance. The influence of market size variable is small and declining over time.
- Full Text:
- Date Issued: 2008
Formulating the African National Congress' foreign investment policy in the transition to a post-apartheid South Africa: problems, pressures and constraints
- Authors: Carim, Xavier
- Date: 1995
- Subjects: Investments, Foreign -- South Africa , Political stability -- South Africa , African National Congress -- Foreign economic relations , South Africa -- Foreign economic relations , South Africa -- Economic policy , South Africa -- Economic conditions -- 1991-
- Language: English
- Type: Thesis , Masters , MA
- Identifier: vital:2764 , http://hdl.handle.net/10962/d1002974 , Investments, Foreign -- South Africa , Political stability -- South Africa , African National Congress -- Foreign economic relations , South Africa -- Foreign economic relations , South Africa -- Economic policy , South Africa -- Economic conditions -- 1991-
- Description: This study examines the wide-ranging and critical factors which have impacted on the African National Congress' (ANC) emerging foreign investment policy. It identifies and analyses the matrix of political and socio-economic factors which have combined at global and national levels to shape ANC policy perspectives towards foreign direct investment (FDI). In so doing, the study adopts an eclectic theoretical and methodological approach. It draws on various theoretical traditions to propose a framework that is heuristic and contingent, rather than axiomatic. With regard to foreign investment, in particular, it recommends a theoretical pluralism emphasising 'engagement' through praxis and sound political (state) action. The study argues that the ANC has reconsidered many of its basic assumptions on the nature of the post-apartheid economy and discusses the reasons for those shifts. The reasons include, in particular, global political and economic trends and the balance of forces in South Africa. These have combined to ensure the ANC's broad acceptance of an 'open-door policy' towards FDI so long as it occurs on terms not inconsistent with national objectives. The emerging policy sees the state playing an active role in encouraging and guiding FDI to specific areas and sectors supportive of broad-based development. Foreign investors will be encouraged to form joint ventures with emerging black businesses and agree to foster training, skills development and affirmative action. Harnessing the benefits of FDI will be important for the success of wider strategies designed to place the economy on a firmer, more sustainable growth path.
- Full Text:
- Date Issued: 1995
- Authors: Carim, Xavier
- Date: 1995
- Subjects: Investments, Foreign -- South Africa , Political stability -- South Africa , African National Congress -- Foreign economic relations , South Africa -- Foreign economic relations , South Africa -- Economic policy , South Africa -- Economic conditions -- 1991-
- Language: English
- Type: Thesis , Masters , MA
- Identifier: vital:2764 , http://hdl.handle.net/10962/d1002974 , Investments, Foreign -- South Africa , Political stability -- South Africa , African National Congress -- Foreign economic relations , South Africa -- Foreign economic relations , South Africa -- Economic policy , South Africa -- Economic conditions -- 1991-
- Description: This study examines the wide-ranging and critical factors which have impacted on the African National Congress' (ANC) emerging foreign investment policy. It identifies and analyses the matrix of political and socio-economic factors which have combined at global and national levels to shape ANC policy perspectives towards foreign direct investment (FDI). In so doing, the study adopts an eclectic theoretical and methodological approach. It draws on various theoretical traditions to propose a framework that is heuristic and contingent, rather than axiomatic. With regard to foreign investment, in particular, it recommends a theoretical pluralism emphasising 'engagement' through praxis and sound political (state) action. The study argues that the ANC has reconsidered many of its basic assumptions on the nature of the post-apartheid economy and discusses the reasons for those shifts. The reasons include, in particular, global political and economic trends and the balance of forces in South Africa. These have combined to ensure the ANC's broad acceptance of an 'open-door policy' towards FDI so long as it occurs on terms not inconsistent with national objectives. The emerging policy sees the state playing an active role in encouraging and guiding FDI to specific areas and sectors supportive of broad-based development. Foreign investors will be encouraged to form joint ventures with emerging black businesses and agree to foster training, skills development and affirmative action. Harnessing the benefits of FDI will be important for the success of wider strategies designed to place the economy on a firmer, more sustainable growth path.
- Full Text:
- Date Issued: 1995
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