Browsing by Subject "ARDL"

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    The effect of financial development on economic growth: the case of South Africa
    (2022) Kawamya, Ackim; Nikolaidou, Eftychia
    This study examines the effect of financial development on economic growth in South Africa. South Africa is an interesting case study, as it provides a relatively rich environment in terms of data. While the finance and business sector has grown significantly in the last ten years becoming a major contributor to gross domestic product, the South African economy has been struggling to register positive output in the preceding years. The study utilizes an Autoregressive Distributed Lag approach to cointegration and a Solow model to consider the role of banks, financial institutions, and financial markets independently. The results reveal that financial institutions have a considerable role in fostering economic development in the long run in South Africa. Conversely, financial market indicators do not have long run effects on growth in South Africa and in the short run, financial markets negatively influence growth. High foreign participation in the financial markets including ease of capital flows and currency volatility could be reasons for this result.
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    The impact of foreign direct investment on economic growth in Lesotho
    (2025) Nkhasi, Rethabile; Nikolaidou, Eftychia
    This study evaluates the impact of the inflow of foreign direct investment (FDI) on Lesotho's economic growth in both the short- and long-run from 1977 to 2020. Three versions of the exogenous model guided by Solow (1956), Mankiw Gregory et al. (1992), and World Bank (1990) and augmented by FDI are used and then estimated by the Auto-Regressive Distributed Lag (ARDL) approach to cointegration. The findings show that FDI's influence on economic growth is negligible, while capital investment (i.e. gross fixed capital formation) and human capital induce economic growth in both the long-run and the short-run. It is also noted that population growth is detrimental to economic growth in both periods whereas trade openness only exerts a positive influence on economic growth in the long-run. The policy implications that are derived from this study suggest amendments in land allocation policies and increased governmental support for the investment promotion agency, LNDC, which currently relies on limited income sources. Moreover, the paper recommends that policymakers boost technological progress by regularly updating school curricula and promoting trade, particularly in tech-intensive sectors.