Proponents of open account contend that Foreign Direct Investment (FDI) promotes the growth of infrastructure through positive externalities. However empirical evidence on whether FDI promote growth in developing countries remains inconclusive. This paper investigates the comovement between FDI, the South African Construction Sector (SACS) output and the Gross Domestic Product (GDP). The data on FDI, SACS and GDP were extracted from the UNCTAD data base for the years 1970 through 2008. The study used econometric methodology including unit root test, Johansen cointegration and Granger causality tests to analyse the data. The result indicates that FDI, SACS, and GDP are stationary after first difference.
|Title of host publication||Proceedings of the 26th Annual ARCOM Conference|
|Publication status||Published - 1 Jan 2010|
- gross domestic product
- foreign direct investment
- South Africa
- construction sector