Econometrics Assignment: An econometric analysis of the determinants of foreign direct investment in South Africa

Florian Ziegler · René Linden

Jan. 2008 · GRIN Verlag

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Research Paper (undergraduate) from the year 2006 in the subject Business economics - Operations Research, grade: 1,7, Nelson Mandela Metropolitan University, language: English, abstract: The assignment is concerned with an economic analysis of the determinants of foreign direct investment in South Africa. Foreign direct investment (FDI) is the name known to the process where a firm from a country provides capital to an existing or newly-created firm in another country. The FDI might depend on several determinants like for instance, GDP per capita, GDP growth rate per annum, ratio of gross fixed capital formation to GDP, rand-dollar exchange rate, interest rate, labour productivity index and unemployment rate. In this assignment five independent variables have been taken into account: labour productivity non agricultural sectors, GDP per capita, rand-dollar exchange rate, total employment non agricultural and real interest rate. Foreign direct investment, especially in South Africa, may cater for economic growth.