Department of Economicshttp://hdl.handle.net/20.500.11837/1972024-03-19T11:07:29Z2024-03-19T11:07:29ZThe impact of oil price volatility on economic growth in South Africa : a cointegration approachMatekenya, Weliswahttp://hdl.handle.net/20.500.11837/9942018-02-15T10:51:37Z2013-01-01T00:00:00ZThe impact of oil price volatility on economic growth in South Africa : a cointegration approach
Matekenya, Weliswa
Oil is an essential commodity in the South African economy and a source of energy that is used for electricity generation, heating, and cooking. It is vital for the transportation system on which the very livelihood of the economy depends. 14% of South African primary energy needs are met by oil while 95% of crude oil is imported, primarily, from Saudi Arabia and Iran. This study investigates the impact of oil price volatility on economic growth in South Africa from 1994Q1-2010Q4. The study employs the VECM and shows that there exists both a long run and short run relationship between the following variables: crude oil price, GDP, gross fixed investment, real interest rate and real exchange rate. In a long-run analysis there is a positive relationship between oil price and GDP while there is negative relationship in the short-run. The study also shows that, as an oil importing country, South Africa‟s economic growth depends on imported oil which makes the country vulnerable to oil price shocks. Based on the findings of this study it is recommended that policy interventions should include both monetary and fiscal policies. It is in this regard that promoting a regional integration in order to reduce oil dependence, by optimizing electricity supplies across the region, is essential. This will improve efficiency and, owing to economies of scale, lower generation costs.
2013-01-01T00:00:00ZThe determinants of foreign direct investment inflows in South AfricaMajavu, Anathihttp://hdl.handle.net/20.500.11837/9612018-02-15T10:51:37Z2015-01-01T00:00:00ZThe determinants of foreign direct investment inflows in South Africa
Majavu, Anathi
This study attempts to identify the determinants of FDI inflows into South Africa using annual data for the period from 1980 to 2012. Firstly, it provides an overview of FDI and the state of macroeconomic variables in South Africa. Secondly, it provides a review of the literature, both theoretical and empirical, on the proposed factors that determine FDI inflows. Based on the empirical literature review, The Johnsen cointegration method was chosen to analyse the long-term relationship between the variables of interest which is a VAR based model. The empirical results revealed that there is a long-term relationship between FDI and its determinants as specified in the study. The Vector Error Correction Model was estimated to analyse both the short-run and long-run determinants of FDI inflows. The empirical results revealed that GDP, Openness, inflation, exchange rate, corporate tax and a measure of financial crisis are important determinants of FDI inflows into South Africa. The Granger Causality was estimated to analyse if there is a causal relationship between FDI and other variables such as GDP, the results revealed that there is a uni-directional causality from GDP to FDI. These results were consistent with the long-run cointegrating vector. This suggests that authorities need to take into account factors which hamper the growth of the economy given its importance to attracting FDI inflows. In addition, the financial crisis variable was found to be negative and significant in determining the flow of FDI into the country. This point out that factors beyond the country’s boarder have a large bearing on the flow of FDI into the country. This in part questions the sustainability of foreign capital as a form of development finance given in the face of a crisis it diminishes.
2015-01-01T00:00:00ZThe impact of foreign direct investment on labour productivity of the automotive sector in South AfricaLawana, Nozukohttp://hdl.handle.net/20.500.11837/9592018-02-15T10:51:37Z2016-01-01T00:00:00ZThe impact of foreign direct investment on labour productivity of the automotive sector in South Africa
Lawana, Nozuko
The determinants of Foreign Direct Investment (FDI) and its effects on macroeconomic growth in developing countries have been investigated exhaustively by numerous researchers. The dominant message that has emerged from these studies is that FDI promotes growth. However, few studies have dealt with the influence of FDI on labour productivity in the automotive industry. The aim of this study was to examine the impact of FDI on labour productivity in this industry in South Africa, covering the period 1995 to 2013. The Johansen cointegration test was utilised to analysis the long-term relationship between FCI and labour productivity. The empirical results revealed that there is a long-term relationship between the two variables. The Vector Error Correction Model was also estimated to examine the short-term relationship between the variables. The empirical results revealed that FDI has a positive statistical significant impact on labour productivity in South Africa. The results suggest that policies aimed at enhancing FDI should be pursued as this enhances productivity in the automotive sector which will spill over to other sectors of the economy.
2016-01-01T00:00:00ZDynamic interactions between stock markets and banks in South Africa : testing for market disciplining of banksSyden, Mishihttp://hdl.handle.net/20.500.11837/9582018-02-15T10:51:37Z2015-01-01T00:00:00ZDynamic interactions between stock markets and banks in South Africa : testing for market disciplining of banks
Syden, Mishi
Literature on the significance of vibrant financial system is vast and conclusive, more so on the need for strong banking system for sustainable inclusive growth. This study take cognisant of such literature and explores the possible links between stock markets and banking system, with emphasis on testing the presence of market disciplining of banks. The study analysed South African individual bank panel data for the period 1994-2014. The study makes the following contributions: testing of market discipline of banks by stock markets in a developing economy, albeit this new strand in banking sector research has been fairly a preserve for developed countries across literature; testing stock market channel of monetary policy transmission in South Africa; exploring robust estimations to mitigate downfalls with short and unbalanced panels; controlling for financial crisis as well as covering a period of Basel II & III which emphasizes market discipline as a third pillar. The role of stock market discipline in aiding regulators and supervisors in ensuring efficiency and stability of the banking system is phenomenal internationally as seen by the recognition in Basel II & III, however its effectiveness has not been empirically tested in developing countries like South Africa. Diverse panel data estimation techniques producing robust/ corrected standard errors have been employed on the data making use of STATA 13. The study also made use on Pooled Mean Group estimates as well as dynamic fixed effects for robustness checks. The empirical results indicate that indeed stock market indicators are omitted variables in the traditional bank lending channel model and that the specified stock market channel model has no omitted variables. The presence of a stock market channel of monetary policy transmission in South Africa is established and thus vindicating the appropriate intermediate target for the central bank to be price level (inflation), with price stability being the ultimate goal. Furthermore the results point to the ability of stock markets to monitor and influence the banks (market discipline of banks) as indeed stock markets have been found to be significantly linked to banks’ operations as being information aggregator and provider. The results have varied implications for policy and further research.
2015-01-01T00:00:00Z