Examining the external-factors-led growth hypothesis for the South African economy.
Heliyon
; 6(5): e04009, 2020 May.
Article
em En
| MEDLINE
| ID: mdl-32490235
ABSTRACT
Reducing unemployment rate and achieving a sustainable economic growth underscore the Sustainable Development Goal 8. Our study investigates a new model that specifies the external-factors-led growth hypothesis for the South African economy. The independent variables include trade openness, external debt, FDI and exchange rate against GDP as the targeted variable. The ARDL approach was adopted after achieving a mixed order of integration from the stationarity test using traditional unit root tests. All external factors were found to exert a positive influence on economic expansion. Trade openness and exchange rate specifically, exert significant influence on economic growth, which means that an improvement in these factors will proportionately favour economic expansion. In essence, a 1% improvement in trade openness and exchange rate will generate an equivalent of 0.30% and 0.19% increase in GDP in the long-run. On average, trade openness, exchange rate and external loan are beneficial to the economy of South Africa. Thus, recommend the need for the authority concern to open more line of bilateral trade to enable the economy to fully tap from the benefits accrued from indulging in economic openness.
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Temas:
ECOS
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Aspectos_gerais
Bases de dados:
MEDLINE
Tipo de estudo:
Health_economic_evaluation
/
Prognostic_studies
Idioma:
En
Revista:
Heliyon
Ano de publicação:
2020
Tipo de documento:
Article
País de afiliação:
Nigéria