Foreign Direct Investment, Non-Renewable Energy and Economic Growth: An Empirical Analysis from South Africa
Purpose This study aims to examine the connection between foreign direct investment, non-renewable energy, and economic growth in South Africa. Methodology The data was collected from the World Bank’s website from 1990 to 2020. The VECM and Granger causality approaches were employed to evalua...
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| Format: | Article |
| Language: | English |
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BMER Consultancy
2023-12-01
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| Series: | Reviews of Management Sciences |
| Subjects: | |
| Online Access: | https://rmsjournal.com/index.php/admin/article/view/233 |
| _version_ | 1827390715429126144 |
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| author | Ahmed ADEKUNLE |
| author_facet | Ahmed ADEKUNLE |
| author_sort | Ahmed ADEKUNLE |
| collection | DOAJ |
| description |
Purpose
This study aims to examine the connection between foreign direct investment, non-renewable energy, and economic growth in South Africa.
Methodology
The data was collected from the World Bank’s website from 1990 to 2020. The VECM and Granger causality approaches were employed to evaluate the connection between Economic growth, FDI, and Non-renewable energy.
Findings
The findings show that a long-term equilibrium relationship exists among the variables. Further, the result of the Vector Error Correction Model (VECM), shows a coefficient value of 0.0038 indicating the short-term adjustment speed of the system towards its long-run equilibrium. The result of Granger causality shows no bidirectional Granger causality among any of the variables. There is a Unidirectional Causality between GDPC and NRENW.
Conclusion
The study concluded that non-renewable energy can enhance economic growth in these countries, but it can aggravate the degradation of the environment. Essentially, foreign direct investment (FDI) significantly and negatively affects growth, suggesting that FDI entry into African nations negatively affects the environment.
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| first_indexed | 2024-03-08T16:56:46Z |
| format | Article |
| id | doaj.art-50be692473d3471b9922297d9e3fefba |
| institution | Directory Open Access Journal |
| issn | 2709-9601 2709-961X |
| language | English |
| last_indexed | 2024-03-08T16:56:46Z |
| publishDate | 2023-12-01 |
| publisher | BMER Consultancy |
| record_format | Article |
| series | Reviews of Management Sciences |
| spelling | doaj.art-50be692473d3471b9922297d9e3fefba2024-01-04T20:20:24ZengBMER ConsultancyReviews of Management Sciences2709-96012709-961X2023-12-015210.53909/rms.05.02.0233Foreign Direct Investment, Non-Renewable Energy and Economic Growth: An Empirical Analysis from South AfricaAhmed ADEKUNLE0Walter Sisulu University Purpose This study aims to examine the connection between foreign direct investment, non-renewable energy, and economic growth in South Africa. Methodology The data was collected from the World Bank’s website from 1990 to 2020. The VECM and Granger causality approaches were employed to evaluate the connection between Economic growth, FDI, and Non-renewable energy. Findings The findings show that a long-term equilibrium relationship exists among the variables. Further, the result of the Vector Error Correction Model (VECM), shows a coefficient value of 0.0038 indicating the short-term adjustment speed of the system towards its long-run equilibrium. The result of Granger causality shows no bidirectional Granger causality among any of the variables. There is a Unidirectional Causality between GDPC and NRENW. Conclusion The study concluded that non-renewable energy can enhance economic growth in these countries, but it can aggravate the degradation of the environment. Essentially, foreign direct investment (FDI) significantly and negatively affects growth, suggesting that FDI entry into African nations negatively affects the environment. https://rmsjournal.com/index.php/admin/article/view/233Foreign direct investmentNon-renewable energyGranger causalityVECMSouth Africa |
| spellingShingle | Ahmed ADEKUNLE Foreign Direct Investment, Non-Renewable Energy and Economic Growth: An Empirical Analysis from South Africa Reviews of Management Sciences Foreign direct investment Non-renewable energy Granger causality VECM South Africa |
| title | Foreign Direct Investment, Non-Renewable Energy and Economic Growth: An Empirical Analysis from South Africa |
| title_full | Foreign Direct Investment, Non-Renewable Energy and Economic Growth: An Empirical Analysis from South Africa |
| title_fullStr | Foreign Direct Investment, Non-Renewable Energy and Economic Growth: An Empirical Analysis from South Africa |
| title_full_unstemmed | Foreign Direct Investment, Non-Renewable Energy and Economic Growth: An Empirical Analysis from South Africa |
| title_short | Foreign Direct Investment, Non-Renewable Energy and Economic Growth: An Empirical Analysis from South Africa |
| title_sort | foreign direct investment non renewable energy and economic growth an empirical analysis from south africa |
| topic | Foreign direct investment Non-renewable energy Granger causality VECM South Africa |
| url | https://rmsjournal.com/index.php/admin/article/view/233 |
| work_keys_str_mv | AT ahmedadekunle foreigndirectinvestmentnonrenewableenergyandeconomicgrowthanempiricalanalysisfromsouthafrica |