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

Namapsa Chella and Andrew Phiri

MPRA Paper from University Library of Munich, Germany

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)
Date: 2017-11-02
New Economics Papers: this item is included in nep-int and nep-mac
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Related works:
Working Paper: Long-run cointegration between foreign direct investment, direct investment and unemployment and South Africa (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:82371

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