Title: Property rights, foreign direct investment and economic growth: a comparison of two southern African countries
Authors: Kunofiwa Tsaurai
Addresses: Department of Banking, Risk Management and Finance, University of South Africa, P.O Box 392, UNISA, 0003 Pretoria, South Africa
Abstract: This study investigated the relationship between property rights, FDI and economic growth in Zambia and Zimbabwe using the ARDL Bounds testing framework with annual time series data from 1985 to 2015. The study observed that there was no long run relationship between either property rights and FDI or property rights and economic growth in both countries. However, a co-integrating relationship between FDI and economic growth was established both in Zambia and Zimbabwe. Granger causality tests revealed a uni-directional causality relationship running from economic growth to FDI in Zambia in the long run whereas economic growth was found to have been positively influenced by FDI in the short run in Zimbabwe. Zambian responsible authorities are encouraged to implement economic growth promotion policies if they intend to increase FDI into the country. The study also urges the Zimbabwe authorities to step up FDI improvement initiatives in order to increase economic growth.
Keywords: property rights; FDI; growth; autoregressive distributive lag; ARDL; Zambia; Zimbabwe; Africa.
International Journal of Business and Globalisation, 2019 Vol.22 No.2, pp.172 - 187
Received: 25 Mar 2017
Accepted: 19 May 2017
Published online: 15 Mar 2019 *