The relationship between transport infrastructure and output growth in rural nodal municipalities within South Africa

Fatima Jili and Sanele Gumede
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Fatima Jili: University of KwaZulu-Natal
Sanele Gumede: University of KwaZulu-Natal; South Africa

International Journal of Research in Business and Social Science (2147-4478), 2024, vol. 13, issue 6, 138-147

Abstract: Transport infrastructure is an integral part of economic and social development in many countries, including South Africa. Economic growth theories state that a sound transport system enhances accessibility and output. Despite this, rural areas in South Africa face widespread poverty, poor infrastructure and limited access to essential services. This paper aims to examine the impact of transportation infrastructure investment on the output growth of rural nodal district municipalities in South Africa. This study focuses on two main objectives 1) investigating the relationship between transport infrastructure investment and output growth in rural nodal district municipalities and 2) understanding the causal relationship between transportation infrastructure investment and output growth in rural nodal district municipalities—this analysis uses panel data from 2012 to 2019. We used Fisher type (ADF and PP) panel unit root tests (Maddala & Wu,1999) to determine if the variables were stationary. Additionally, we employed Pedroni tests (1999) to ascertain the presence of cointegration among the variables. Once cointegration was confirmed, our study utilised the Panel VECM. A Panel Granger was then conducted to analyse the direction of causality between transportation infrastructure investment and output growth. This study recommends that the government should improve investments in transportation to improve the output of rural nodal district municipalities. Key Words:Transport Infrastructure Investment, Output Growth, Rural Nodal District Municipalities

Date: 2024
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