The relationship between infrastructure and foreign investment inflows to South Africa

 

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dc.contributor.advisor Alhassan, Abdul Latif en_ZA
dc.contributor.author Taole, Tšepo Ntšoane en_ZA
dc.date.accessioned 2018-11-23T06:58:39Z
dc.date.available 2018-11-23T06:58:39Z
dc.date.issued 2018 en_ZA
dc.identifier.citation Taole, T. 2018. The relationship between infrastructure and foreign investment inflows to South Africa. University of Cape Town. en_ZA
dc.identifier.uri http://hdl.handle.net/11427/29080
dc.description.abstract Foreign direct investment (FDI) has emerged as a major source of external capital for developing countries in Asia, South and Central America and Sub-Saharan Africa. However, Sub-Saharan Africa's share of global FDI compares unfavourably with that garnered by other developing regions in the world. Until recently, South Africa has been the top recipient of FDI inflows among SSA countries as it has benefitted from the relatively stable macroeconomic and political environment. South Africa is, however, afflicted by significant deficits in the quality and quantity of economic and social infrastructure. Empirical studies on the significance of infrastructure development and FDI inflows at country level in SSA are limited, as are empirical studies on the determinants of FDI inflows to SSA countries. It is against this backdrop that this research sets out to examine the relationship between infrastructure and FDI inflows to South Africa between 1970 and 2015. Secondary time series data on indicators for infrastructure quality, infrastructure investment, market size, financial market development, macroeconomic stability, and trade openness was collected for empirical analysis. In accordance with time series analysis of macro-economic data, unit root and cointegration tests were performed prior to estimation of the error correction model. The results of the research indicate that infrastructure quality, financial market development, trade openness, and market size all had a positive impact on FDI inflows in the long run, although significantly so in the case of the latter two indicators. Infrastructure investment stability had a negative but insignificant impact, while inflation had a negative but statistically significant impact on FDI inflows. In the short run, only trade openness and financial market development had a positive but statistically insignificant impact on FDI inflows. The other indicators reflected a negative and insignificant impact on FDI inflows. The results of the research suggest that besides advancing macroeconomic stability, the South African government should also foster inclusive economic growth and development which can enhance the country's attractiveness for FDI over the long-term. en_ZA
dc.language.iso eng en_ZA
dc.subject.other Development Finance en_ZA
dc.title The relationship between infrastructure and foreign investment inflows to South Africa en_ZA
dc.type Master Thesis
uct.type.publication Research en_ZA
uct.type.resource Thesis en_ZA
dc.publisher.institution University of Cape Town
dc.publisher.faculty Faculty of Commerce en_ZA
dc.publisher.department Research of GSB en_ZA
dc.type.qualificationlevel Masters
dc.type.qualificationname MCom en_ZA
uct.type.filetype Text
uct.type.filetype Image
dc.identifier.apacitation Taole, T. N. (2018). <i>The relationship between infrastructure and foreign investment inflows to South Africa</i>. (Thesis). University of Cape Town ,Faculty of Commerce ,Research of GSB. Retrieved from http://hdl.handle.net/11427/29080 en_ZA
dc.identifier.chicagocitation Taole, Tšepo Ntšoane. <i>"The relationship between infrastructure and foreign investment inflows to South Africa."</i> Thesis., University of Cape Town ,Faculty of Commerce ,Research of GSB, 2018. http://hdl.handle.net/11427/29080 en_ZA
dc.identifier.vancouvercitation Taole TN. The relationship between infrastructure and foreign investment inflows to South Africa. [Thesis]. University of Cape Town ,Faculty of Commerce ,Research of GSB, 2018 [cited yyyy month dd]. Available from: http://hdl.handle.net/11427/29080 en_ZA
dc.identifier.ris TY - Thesis / Dissertation AU - Taole, Tšepo Ntšoane AB - Foreign direct investment (FDI) has emerged as a major source of external capital for developing countries in Asia, South and Central America and Sub-Saharan Africa. However, Sub-Saharan Africa's share of global FDI compares unfavourably with that garnered by other developing regions in the world. Until recently, South Africa has been the top recipient of FDI inflows among SSA countries as it has benefitted from the relatively stable macroeconomic and political environment. South Africa is, however, afflicted by significant deficits in the quality and quantity of economic and social infrastructure. Empirical studies on the significance of infrastructure development and FDI inflows at country level in SSA are limited, as are empirical studies on the determinants of FDI inflows to SSA countries. It is against this backdrop that this research sets out to examine the relationship between infrastructure and FDI inflows to South Africa between 1970 and 2015. Secondary time series data on indicators for infrastructure quality, infrastructure investment, market size, financial market development, macroeconomic stability, and trade openness was collected for empirical analysis. In accordance with time series analysis of macro-economic data, unit root and cointegration tests were performed prior to estimation of the error correction model. The results of the research indicate that infrastructure quality, financial market development, trade openness, and market size all had a positive impact on FDI inflows in the long run, although significantly so in the case of the latter two indicators. Infrastructure investment stability had a negative but insignificant impact, while inflation had a negative but statistically significant impact on FDI inflows. In the short run, only trade openness and financial market development had a positive but statistically insignificant impact on FDI inflows. The other indicators reflected a negative and insignificant impact on FDI inflows. The results of the research suggest that besides advancing macroeconomic stability, the South African government should also foster inclusive economic growth and development which can enhance the country's attractiveness for FDI over the long-term. DA - 2018 DB - OpenUCT DP - University of Cape Town LK - https://open.uct.ac.za PB - University of Cape Town PY - 2018 T1 - The relationship between infrastructure and foreign investment inflows to South Africa TI - The relationship between infrastructure and foreign investment inflows to South Africa UR - http://hdl.handle.net/11427/29080 ER - en_ZA


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