- Title
- Investigating the impact of capital account liberalization on economic growth: A case study of South Africa
- Creator
- Khumalo, Sibanisezwe A. (https://orcid.org/0000-0002-4330-9249)
- Subject
- Capital Movements--South Africa
- Subject
- Investment, Foreign--South Africa South Africa
- Subject
- Free Trade--South Africa
- Date
- 2011
- Type
- Master's theses
- Type
- text
- Identifier
- http://hdl.handle.net/10353/25800
- Identifier
- vital:64486
- Description
- The increased interest in capital flows has made it imperative to understand how they impact a particular economy. The Global drive for an interlinked world economy has increased the need for monetary authorities and Governments to able to effectively deal with any negative spins off from capital flows and also be able to take advantage of positive effects capital flows may have on an economy. The study seeks to understand how the change to lift restrictions on capital flows into the South African economy may have impacted on economic growth. The study analyses the relationship that existed between capital flows, that is to say foreign direct investment (FDI) and portfolio investment (P_I) and economic growth under the period of capital controls (1975 Q1 to 1994Q1). Then study will then analyse the same relationship but this time under the liberalised period (1994 Q2 to 2010 Q2) and compare how the long run relationship has changed after capital account liberalisation. The study uses an endogenous model to determine the relationship. The study unlike most will focus on a single economy, which is South Africa and not use panel data like most previous studies. The study found that in the short run capital account liberalising aided economic growth as both FDI and P_I became significant, with positive coefficients and also found that there is long run relationship between economic growth and capital flows. In the long run FDI is significant while P_I is not. After liberalisation FDI adjusted faster in the long run than before liberalisation on its impact on economic output. Also of note was that the study found that under capital controls the conditional variance was constant but after liberalisation the relationship between capital flows and economic growth became more sensitive to negative news and the conditional variance was not constant thus indication of increased volatility. To maximise from opening up of capital accounts the economy should maintain sound macroeconomic policies. This will help shield the economy from the external shocks and this maintain economic growth.
- Description
- Thesis (MA) -- Faculty of Management and Commerce, 2011
- Format
- computer
- Format
- online resource
- Format
- application/pdf
- Format
- 1 online resource (198 leaves)
- Format
- Publisher
- University of Fort Hare
- Publisher
- Faculty of Management and Commerce
- Language
- English
- Rights
- University of Fort Hare
- Rights
- All Rights Reserved
- Rights
- Open Access
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UFH Department of Economics
| Thumbnail | File | Description | Size | Format | |||
|---|---|---|---|---|---|---|---|
| View Details | SOURCE1 | Khumalo S. M.com.pdf | 2 MB | Adobe Acrobat PDF | View Details |