Long-run cointegration between foreign direct investment, direct investment and unemployment and South Africa

Nampasa Chella () and Andrew Phiri
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Nampasa Chella: Department of Economics, Nelson Mandela University

No 1714, Working Papers from Department of Economics, Nelson Mandela University

Abstract: The primary objective of this paper is to investigate the relationship between foreign direct investment, domestic investment and unemployment in South Africa. Our mode of empirical investigation is the autoregressive distributive lag (ARDL) cointegration model which provides the advantage of accommodating for a mixture of levels stationary and difference stationary time series variables and is applied to quarterly data collected between 1970 and 2014. Our empirical results point to the existence of a negative effect of domestic investments on unemployment levels whereas foreign direct investment appears to have no significant effect on reducing unemployment levels. Collectively, these results hold crucial implications for South African policymakers.

Keywords: FDI; domestic investment; unemployment; ARDL; cointegration; South Africa; developing country. (search for similar items in EconPapers)
JEL-codes: C22 C32 E22 E24 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2017-11, Revised 2017-11
New Economics Papers: this item is included in nep-int and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Long-run cointegration between foreign direct investment, direct investment and unemployment in South Africa (2017)
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