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Trade Balance, Investment and GDP Nexus: South Africa Revisited.
- Source :
-
African Journal of Development Studies . Dec2020, Vol. 10 Issue 4, p187-207. 21p. - Publication Year :
- 2020
-
Abstract
- Trade and investment are recognized as sources of economic growth in developing and developed countries, including South Africa. This paper investigates the relationship between these three variables for the period 2002Q2-2018Q4. The autoregressive distributed lag approach showed that there is a beneficial and significant relationship on gross domestic product from trade balance and investment. Additionally, employing Granger Causality test, a unidirectional granger causal relationship was traced from GDP to trade balance and investment, but not otherwise. There was also evidence of bidirectional causal relationship between trade balance and investment. To create a balance between exports and imports, supply side policies such as lower taxes or provision of subsidies on domestic producers should be enforced. Investment in technology and infrastructural development is required to boost total investment, which will in turn fasten economic activity and raise GDP. Therefore, the call by the South African president to improve investment and exports growth is an ideal undertaking. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 26343630
- Volume :
- 10
- Issue :
- 4
- Database :
- Academic Search Index
- Journal :
- African Journal of Development Studies
- Publication Type :
- Academic Journal
- Accession number :
- 174228644
- Full Text :
- https://doi.org/10.31920/2634-3649/2020/v10n4a10