The real exchange rate-foreign direct investment controversy in South Africa: an application of ARDL approach
This paper examines the relationship between real exchange rate and foreign direct investment. We apply autoregressive distributed lag (ARDL) bounds testing method to estimate short and long-run relationships between the series in South Africa over the period of 1987-2016. The results reveal long-ru...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Canadian Center of Science and Education
2017
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| Online Access: | http://psasir.upm.edu.my/id/eprint/60600/ http://psasir.upm.edu.my/id/eprint/60600/1/60600.pdf |
| _version_ | 1848854240478363648 |
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| author | Dahir, Ahmed Mohamed Mahat, Fauziah Amin Noordin, Bany Ariffin Ab Razak, Nazrul Hisyam |
| author_facet | Dahir, Ahmed Mohamed Mahat, Fauziah Amin Noordin, Bany Ariffin Ab Razak, Nazrul Hisyam |
| author_sort | Dahir, Ahmed Mohamed |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | This paper examines the relationship between real exchange rate and foreign direct investment. We apply autoregressive distributed lag (ARDL) bounds testing method to estimate short and long-run relationships between the series in South Africa over the period of 1987-2016. The results reveal long-run cointegration relationships among variables are confirmed, implying real exchange rate, domestic market size stimulate the foreign direct investment in the long run. Furthermore, there is significant Granger unidirectional causality foreign direct investment to real exchange rate in short and long run and from market size to trade openness in a short run. This finding further suggests that the exchange rate instability are likely to be substantially harmful to a positive effect of FDI and should be avoided in South Africa. |
| first_indexed | 2025-11-15T11:06:43Z |
| format | Article |
| id | upm-60600 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T11:06:43Z |
| publishDate | 2017 |
| publisher | Canadian Center of Science and Education |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-606002018-06-08T00:25:42Z http://psasir.upm.edu.my/id/eprint/60600/ The real exchange rate-foreign direct investment controversy in South Africa: an application of ARDL approach Dahir, Ahmed Mohamed Mahat, Fauziah Amin Noordin, Bany Ariffin Ab Razak, Nazrul Hisyam This paper examines the relationship between real exchange rate and foreign direct investment. We apply autoregressive distributed lag (ARDL) bounds testing method to estimate short and long-run relationships between the series in South Africa over the period of 1987-2016. The results reveal long-run cointegration relationships among variables are confirmed, implying real exchange rate, domestic market size stimulate the foreign direct investment in the long run. Furthermore, there is significant Granger unidirectional causality foreign direct investment to real exchange rate in short and long run and from market size to trade openness in a short run. This finding further suggests that the exchange rate instability are likely to be substantially harmful to a positive effect of FDI and should be avoided in South Africa. Canadian Center of Science and Education 2017 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/60600/1/60600.pdf Dahir, Ahmed Mohamed and Mahat, Fauziah and Amin Noordin, Bany Ariffin and Ab Razak, Nazrul Hisyam (2017) The real exchange rate-foreign direct investment controversy in South Africa: an application of ARDL approach. International Journal of Economics and Finance, 9 (11). pp. 207-217. ISSN 1916-971X; ESSN: 1916-9728 http://ccsenet.org/journal/index.php/ijef/article/view/71450 10.5539/ijef.v9n11p207 |
| spellingShingle | Dahir, Ahmed Mohamed Mahat, Fauziah Amin Noordin, Bany Ariffin Ab Razak, Nazrul Hisyam The real exchange rate-foreign direct investment controversy in South Africa: an application of ARDL approach |
| title | The real exchange rate-foreign direct investment controversy in South Africa: an application of ARDL approach |
| title_full | The real exchange rate-foreign direct investment controversy in South Africa: an application of ARDL approach |
| title_fullStr | The real exchange rate-foreign direct investment controversy in South Africa: an application of ARDL approach |
| title_full_unstemmed | The real exchange rate-foreign direct investment controversy in South Africa: an application of ARDL approach |
| title_short | The real exchange rate-foreign direct investment controversy in South Africa: an application of ARDL approach |
| title_sort | real exchange rate-foreign direct investment controversy in south africa: an application of ardl approach |
| url | http://psasir.upm.edu.my/id/eprint/60600/ http://psasir.upm.edu.my/id/eprint/60600/ http://psasir.upm.edu.my/id/eprint/60600/ http://psasir.upm.edu.my/id/eprint/60600/1/60600.pdf |