Skip to main content

Modeling the nexus between coal consumption, FDI inflow and economic expansion: does industrialization matter in South Africa?

Udi, J., Bekun, F.V and Adedoyin, F., 2020. Modeling the nexus between coal consumption, FDI inflow and economic expansion: does industrialization matter in South Africa? Environmental Science and Pollution Research, 27, 10553-10564.

Full text available as:

[img]
Preview
PDF (OPEN ACCESS ARTICLE)
Udi2020_Article_ModelingTheNexusBetweenCoalCon.pdf - Published Version
Available under License Creative Commons Attribution.

537kB

DOI: 10.1007/s11356-020-07691-x

Abstract

This study examines the role of industrialization in the energy-growth-FDI nexus for the case of South Africa using data over the period 1970 to 2018. The empirical exercise was conducted using Pesaran Autoregressive Distributed Lag (ARDL) bounds testing approach. To accomplish our study objective, we analyze stationarity properties of the series using the unit root test after which we applied Bayer-Hanck (B-H) combined technique to cointegration to assess whether a long-run relationship exists among the series. Empirical results show that a 1% change in FDI account for 0.002% and 0.013% increase in economic expansion in the short- and long- run respectively. Also, a 1% increase in coal consumption influence GDP negatively by 0.083% and 0.207% in the short- and long- run respectively. Furthermore, a 1% increase in total natural resource rent positively affects GDP by 0.02% and 0.05% respectively in the short- and long- run. Industrialization, on the other hand, demonstrates a positive and significant impact on the economic growth process both in the short and long run. Industrialization contributes 0.506% and 1.274% to economic expansion both in the short and long run respectively. The causality tests suggest that a one-way causal link running from FDI to industrialization, and from industrialization to coal consumption exists. Finally, FDI inflow drives Total Natural Resource rents in South Africa. This study also gives reliable growth and energy policy proposals to policymakers applicable to countries around the globe.

Item Type:Article
ISSN:0944-1344
Uncontrolled Keywords:Coal consumption; FDI inflow; economic expansion; industrialization; South Africa
Group:Faculty of Management
ID Code:33241
Deposited By: Unnamed user with email symplectic@symplectic
Deposited On:17 Jan 2020 11:44
Last Modified:08 Apr 2020 11:41

Downloads

Downloads per month over past year

More statistics for this item...
Repository Staff Only -