Search results

Abstract
In terms of macro-economic policy, gross fixed capital formation, which is the major component of domestic investment, is seen as an important process that could accelerate economic growth. This study re-examines the controversial issue of causality between domestic investment, employment and economic growth using South African data. The traditional assumption of causality running from investment to economic growth has remained inconclusive while empirical findings on the investment and employment growth nexus are also largely unsettled. The study makes use of quarterly data from 1995Q1 to 2016Q4 within the framework of the Johansen cointegration and Vector Error Correction Models (VECM). The empirical findings suggest that a long run relationship exists between domestic investment, employment and economic growth, with causality running from economic growth to investment and not vice versa. The results also demonstrate that investment has a positive long-run impact on employment. The empirical evidence further suggests bi-directional causality between employment and economic growth, while evidence of uni-directional causality, from investment to employment, is also found. The major implication of the study is that although there is bi-directional causality between economic growth and employment, economic growth does not translate to increased employment in the long run confirming "jobless growth". Investment is found to be a positive driver of employment in the South African economy in the long-run. The study concludes that, in order to stimulate employment, investment enhancing policies, such as low interest rates and a favourable economic environment should be put in place to accelerate growth. Measures to promote economic growth, such as improved infrastructural facilities and diversification of the economy, should be further engineered so as to encourage increased investment.

This paper explores the relationship between gross fixed capital formation, financial development, and economic growth in Africa. The study used 39 African countries from 1997 to 2017. The study adopted five financial development indicators. The study employed Augmented Mean Group and Common Correlated Effects Mean Group estimation techniques for the estimations. From the study, Bank Deposit to GDP is statistically significant, it has a negative effect on economic growth, and it shows dual causality, Bank Deposit is inadequate in Africa but significant to economic growth. Broad Money to GDP, Domestic Credit to GDP, and Credit to Private Sector to GDP are all statistically insignificant to growth. They also have negative influence on economic growth. Broad Money shows dual causality with growth while both Domestic Credit, and Credit to Private Sector displays one way causality from economic growth. Gross Domestic Savings to GDP is statistically insignificant and it has a positive bearing on growth, it has one-way causality from growth. Broad Money is very limited in Africa to the extent that, the funds available for domestic transactions are barely enough to have any impact on economic growth. Domestic banks and financial institutions hardly gives credit to private sector and government institutions, due to high risk factor. Gross fixed capital formation has a positive bearing on economic growth. It displays bi-directional causality with economic growth. Financial development does not have a blanket relationship with economic growth, but rather it depends on the type of financial development indicator being used.

ABSTRACT In this study we examined with the use of Unit Root, Co-integration and Ordinary Least Square (OLS) method, the impact of Capital Flight on economic growth in Nigeria between 1981 and 2016. Asides capital flight (CAF), Gross Fixed Capital Formation (GFCF), Exchange Rate (EXR), Inflation (INF) and Terms of Trade (TOT) are the other independent variables used. The finding is that apart from the GFCF, the rest of the variables had negative impact on the country's GDP growth during the period under consideration. It is the opinion of the paper therefore, that the government should put in place appropriate policy framework and its implementation to ensure high productivity in the economy. This will not only guarantee availability of enough goods for foreign exchange earnings when exported, reduce inflation in the economy, encourage exports of excess produced goods rather than importing to complement inadequate produced goods. With this, the economy rather than fostering capital flight that leads to low GDP growth will do otherwise. Original Source URL : https://airccse.com/ijhas/papers/3318ijhas01.pdf For more details : https://airccse.com/ijhas/current.html#Nov

ABSTRACT In this study we examined with the use of Unit Root, Co-integration and Ordinary Least Square (OLS) method, the impact of Capital Flight on economic growth in Nigeria between 1981 and 2016. Asides capital flight (CAF), Gross Fixed Capital Formation (GFCF), Exchange Rate (EXR), Inflation (INF) and Terms of Trade (TOT) are the other independent variables used. The finding is that apart from the GFCF, the rest of the variables had negative impact on the country's GDP growth during the period under consideration. It is the opinion of the paper therefore, that the government should put in place appropriate policy framework and its implementation to ensure high productivity in the economy. This will not only guarantee availability of enough goods for foreign exchange earnings when exported, reduce inflation in the economy, encourage exports of excess produced goods rather than importing to complement inadequate produced goods. With this, the economy rather than fostering capital flight that leads to low GDP growth will do otherwise. Original Source URL : https://airccse.com/ijhas/papers/3318ijhas01.pdf for more details : https://airccse.com/ijhas/current.html#may

This study makes a modest contribution to the debates by empirically analyzing the relationship between Nigeria inflation trend and investment growth (gross fixed capital formation), using time series data from 1980 to 2015, obtained from the World Economic Outlook (WEO) database of the IMF and World Development Indicators (World Data Bank Online Version). It employs the Engle-Granger two step modeling (EGM) procedure to co-integration based on unrestricted Error Correction Model and Pair wise Granger Causality tests. From the analysis, my findings indicate that inflation and gross fixed capital formation are cointegrated in this study. The error correction term of -0.76 is negatively signed and also significant at all conventional level indicating that when the variables wonder away from equilibrium following an exogenous shock, 76 percent of the disequilibrium is corrected after one year. Based on the result of granger causality, the paper concludes that causality exist between the two variables used in this study. Therefore, the policy implication of these findings is that government should adopt various policy measures (both monetary and fiscal) to reduce inflation to an acceptable level because the current inflationary trend in Nigeria is negatively affecting the realization of creativity and manufacturing of commodities with international competitive advantage.

This study investigates the impact of governance index and gross fixed capital formation on the economic growth of Brazil, Russia, India, China and South Africa (BRICS) using annual data from 2002 to 2019. This study employs Fixed Effect Model, Driscoll and Kraay standard error with fixed effect, Fully Modified Ordinary Least Square, Dynamic Ordinary Least Square (DOLS) and Panel Dumitrescu Hurlin Causality test. The study has divided the variables into two models where model I includes the impact of governance index (jointly) on economic growth while model II examines the impact of governance index on economic growth individually. The findings demonstrate that the governance index, gross fixed capital formation, population, control of corruption, and governance effectiveness have a positive and significant impact on economic growth, whereas regulatory quality showed a significant and negative impact on economic growth. Furthermore, regarding the Panel test, we notice the presence of unidirectional causality among the constituent variables. Therefore, this study suggests that the government should encourage economic development in the BRICS countries and move away from outdated ideas and poor institutional quality in favor of a new comprehensive reform to achieve excellent governance, population growth control, labor law changes, and corruption control.

Zsfassung in niederländ. Sprache