Page 67 - DUT ICGA Abstract Book

IMPACT OF FOREIGN DIRECT INVESTMENT AND DOMESTIC INVESTMENT ON ON ECONOMIC GROWTH IN IN SOUTH AFRICA: A A A TIME SERIES ANALYSIS
Andile Mhlabane
University of Mpumalanga Email: 201880946@ump ac za Rachel Nishimwe-Niyimbanira (PhD)
Lecturer (Economics) University of Mpumalanga Email: R Niyimbanira@ump ac za Abstract
South Africa has made great strides since post-apartheid in in in in in increasing its investment through foreign cash inflows and domestic investment This research tries to establish the effects of Foreign Direct Investment (FDI) and domestic investment on on economic growth in in South Africa Guided by the unit root test results this study uses Autoregressive Distributed Lag (ARDL) cointegration technique as as well as as the vector error correlation model to investigate effect of FDI and domestic invest invest on on on economic growth in in in South Africa from the the period of of of 1990-2019 To assess the the validity of of of a a a a a model used a a a a a number of of of diagnostic tests were conducted including heteroskedasticity multicollinearity and normality tests The study found a a a a a a a statistically significant positive long run relationship between domestic investment and economic growth Conversely the study found a a a a a a a a negative relationship that is is not statistically significant between FDI and economic growth This finding is is fin in in in in in in line with a a number of studies including those conducted fin in in in in in in South Africa Possibly due to high levels of unemployment in South Africa the study found a a a a negative relationship between population growth growth and economic growth growth The study concludes that policy makers should implement investment investment policies and and promote promote strategies that will reduce linkages in in in in investment investment to foster and and promote promote job creation political and social stability as as well as as sustainability in in in encouraging economic growth KEYWORDS: Foreign Direct Investment domestic investment economic growth growth population growth growth South Africa Book of Abstracts 65