Journal of Indonesian Applied Economics
Vol. 12 No. 2 (2024): August 2024 (IN PRESS)

Assessing the link amid import, export and FDI within South Africa Economy

Adekunle, Ahmed (Unknown)



Article Info

Publish Date
31 Aug 2024

Abstract

Purpose Literature is generally in agreement that FDI promotes growth by enhancing export and stimulating import. Resting on this background, this study assesses the link amid import, export and FDI within South Africa economy.   Design/Methodology/Approach The study employed the Johansen cointegration test, Vector Error Correction Model (VECM) and granger causality test over the annual data which span through 1986-2021.   Findings The findings of the study show that export positively affect foreign direct investment (FDI), serving as both a source of income for the economy and a catalyst for FDI inflows. Additionally, imports also influence FDI positively permitting imports into the economy is a major indicator of economic liberalization which encourage FDI inflows. It is evident that there is only one direction of causality between FDI inflows and export. Since export serves as one of the sources of foreign direct investment (FDI) inflows, the study suggests that financial regulators increase the range of hedge tools and encourage exporters to use hedging to help them manage exchange-rate uncertainty thereby attracting more FDI inflows.   Research limitations/Implications The study possesses limitations such as data limitations and plenty-paradox framework. In the future, effort should be more focused on quarterly and panel data analysis to elaborate on this empirical issue.   Originality/value This research advances our understanding of FDI inflows nexus with other economic variables within the South African economy

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Journal Info

Abbrev

jiae

Publisher

Subject

Economics, Econometrics & Finance

Description

Journal of Indonesian Applied Economics (JIAE) is an online journal sponsored by the Faculty of Economics and Bussiness, Universitas Brawijaya. The purpose of this journal is to enhance the study of economic issues on all aspects of applied economics and ...