The Nexus between Foreign Direct Investment and Electricity Consumption in South Africa

Nyiko Worship Hlongwane, Realeboga Mahapa and Tselane Confidence Nthebe
Additional contact information
Nyiko Worship Hlongwane: School of Economics, North-West University, South Africa.
Realeboga Mahapa: School of Economics, North-West University, South Africa.
Tselane Confidence Nthebe: School of Economics, North-West University, South Africa.

International Journal of Energy Economics and Policy, 2023, vol. 13, issue 5, 213-220

Abstract: The study investigates the nexus between foreign direct investment inflows and electricity consumption in South Africa. The study utilized borrowed time series data sourced from the World Bank and South African Reserve Bank spanning from 1970 to 2020. The study employs a Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) models to investigate the nexus between foreign direct investment inflows and electricity consumption in South Africa. The results of the Johansen cointegration test revealed the presence of cointegration relationships between the variables in the study. The results of the FMOLS and DOLS revealed negative statistically significant and insignificant relationship between electricity consumption and foreign direct investment inflows in South Africa, respectively. Other results revealed that economic growth has a positive statistically significant relationship with foreign direct investment inflows. The Granger causality results revealed unidirectional causality running from economic growth to foreign direct investment inflows. The study recommends that the government and policymakers must revise policies on electricity consumption and economic growth to attract foreign direct investment inflows in South Africa.

Keywords: Foreign Direct Investment; Electricity Consumption; FMOLS; DOLS; South Africa (search for similar items in EconPapers)
JEL-codes: C32 G11 Q40 Q48 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econjournals.com/index.php/ijeep/article/download/14460/7469 (application/pdf)
https://www.econjournals.com/index.php/ijeep/article/view/14460 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eco:journ2:2023-05-25

Access Statistics for this article

International Journal of Energy Economics and Policy is currently edited by Ilhan Ozturk

More articles in International Journal of Energy Economics and Policy from Econjournals
Bibliographic data for series maintained by Ilhan Ozturk ().