THE FDI-GROWTH NEXUS IN SOUTH AFRICA:  A RE-EXAMINATION USING QUANTILE REGRESSION APPROACH

Hlalefang KHOBAI; Nicolene HAMMAN; Thando MKHOMBO; Simba MHAKA; Nomahlubi MAVIKELA; Andrew PHIRI

doi:10.2478/subboec-2018-0013

Authors

Hlalefang KHOBAI North West University, Republic of South Africa
Nicolene HAMMAN Nelson Mandela University, Republic of South Africa
Thando MKHOMBO Nelson Mandela University, Republic of South Africa
Simba MHAKA Nelson Mandela University, Republic of South Africa
Nomahlubi MAVIKELA Nelson Mandela University, Republic of South Africa https://orcid.org/0000-0002-8235-3234
Andrew PHIRI Department of Economics, Faculty of Economics and Mangement Science, Nelson Mandela University, Port Elizabeth, South Africa. Tel. +27 41 504 2650, Email: phiricandrew@gmail.com https://orcid.org/0000-0003-1775-3546

DOI:

https://doi.org/10.2478/subboec-2018-0013

Keywords:

FDI, Economic growth, Quantile regression, Global financial crisis, South Africa.

Abstract

This study sought to contribute to the growing empirical literature by investigating the effects of FDI on per capita GDP growth for South Africa using time series data collected between 1970 and 2016. Compared to the majority of previous studies, we use quantile regressions which investigates the effects of FDI on economic growth at different distributional quantiles. Puzzling enough, the empirical results show that FDI has a negative influence on welfare at extremely low quantiles whereas at other levels this effect turns insignificant. Contrary, the effects of domestic investment on welfare is positive and significant at all levels. Collectively, these results have important implications for policymakers in South Africa.

JEL Classification: C21, C31, E22, F43, O40.

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