- Title
- The nexus between savings, investment and foreign capital in South Africa : an application of the Feldstein-Horioka puzzle
- Creator
- Mtolo, Inga
- Subject
- Investments, Foreign -- South Africa Saving and investment -- South Africa Capital movements -- South Africa
- Date
- 2018
- Type
- Thesis
- Type
- Masters
- Type
- MCom
- Identifier
- http://hdl.handle.net/10353/8968
- Identifier
- vital:34177
- Description
- This study investigates the relationship between savings, investment and foreign capital in South Africa, with special focus on the application of the Feldstein-Horioka theory. South Africa is a country that is still faced with relatively low saving levels. Given the low savings experienced by the country, available literature has alluded that foreign capital has played a greater role as the major driver of private investment expenditure in South Africa. Based on this background, the study empirically investigates the relationship between savings, investment and foreign capital utilising the Autoregressive Distributed Lag Model estimation technique for the period 1965 to 2015. The empirical results revealed that there is a positive and significant relationship between savings and investment in South Africa. The empirical results also show that for the period 1995 to 2015, the different types of external financial flows utilized in the study and investment have a positive relationship. These results have been consistent with our apriori expectations and other prior studies. This suggests that, in the case of South Africa, apart from interest rates, there are other factors that determine investment. The positive relationship between investment and foreign capital flows suggest that policies which are aimed at attracting the different types of foreign financial flows should be implemented.
- Format
- 108 leaves
- Format
- Publisher
- University of Fort Hare
- Publisher
- Faculty of Management and Commerce
- Language
- English
- Rights
- University of Fort Hare
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| Thumbnail | File | Description | Size | Format | |||
|---|---|---|---|---|---|---|---|
| View Details | SOURCE1 | Mtolo 1.pdf | 1 MB | Adobe Acrobat PDF | View Details |