Munich Personal RePEc Archive

Does corruption hampers inward FDI in South Africa from other African countries? a gravity model analysis

Mosikari, Teboho Jeremiah and Nthebe, Tselane Confidence and Eita, Joel Hinaunye (2018): Does corruption hampers inward FDI in South Africa from other African countries? a gravity model analysis.

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Abstract

The purpose of this paper is to investigate the relationship between corruption and FDI inflows from other African countries to South Africa. The study uses gravity model and employs panel data econometric technique such as pooled, fixed and random effects model. The results indicate that there is a significant negative relationship between corruption and FDI inflows from other African countries to South Africa. This implies that policy makers in South Africa should implement measures to curb corruption. This will help in attracting FDI inflows from other African countries and encourage the creation of job opportunities.

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