MCOM / Department of Economics / The study aimed to empirically examine the impact of foreign direct investment on economic growth in the Southern African Development Community countries for the period 1980-2015. The relation between foreign direct investment and economic growth has been a subject of extensive discussion in the economic literature. The debate revolves around the growth implications of foreign direct investment. The extraordinary increase in global FDI flows in the last three decades triggered an interest to investigate the growth implications of such huge amounts of cross-border capital movements. Owing to this surge in foreign direct investment flows and the effort countries are putting forth to attract it, it would seem straightforward to argue that foreign direct investment would convey net positive effects on economic growth of a host country. From a theoretical standpoint foreign direct investment has been shown to boost economic growth through technology transfer and diffusion. In light of the expected benefits of foreign direct investment, many empirical studies have been conducted on this subject matter. While the explosion of foreign direct investment flows is distinctive, the evidence accumulated on the growth effects remains mixed. Using fixed effect panel data analysis, on the overall, the findings of the study show a negative effect of FDI on economic growth in the SADC countries for the period 1980 to 2015. The findings are not in tandem with theoretical predictions from growth theorists and some empirical studies carried out on the same topic. The findings of the study imply that FDI does not seem to have an independent effect on economic growth for the panel of countries in the SADC region. This maybe because FDI flows to Africa and into the SADC countries, in particular, are channelled mainly to the extractive sector with little to no linkages with the other sectors of the host country economy. The findings of the study also show that the growth-enhancing potential of FDI is higher in middle-income countries than low-income countries in the SADC region.

MCom (Cost and Management Accounting) / Department of Accountancy / The relationship between a firm’s investment behaviour, financial constraints and the level of internally generated cash flows has been a subject of extensive discussion in finance literature. The discussion revolves around the effectiveness of investment cash flow sensitivity (ICFS) as a measure of financial constraints with contradicting conclusions. Empirical literature is also not in agreement about the best firm-specific proxy to distinguish firms into financially-constrained versus financially-unconstrained ones and the effect of the 2007 to 2009 global financial crisis on the ICFS of South African firms is still to be determined. There are very limited studies that have investigated ICFS in developing economies. This is important as institutional differences and capital market developments between developed and developing economies justify a separate study of South Africa as a developing economy. This study used data drawn from 131 Johannesburg Stock Exchange listed non-financial firms for the period 2003 to 2016 to establish the most suitable criterion for distinguishing firms into financially constrained versus unconstrained, to determine the effect of the 2007 to 2009 global financial crisis on the ICFS and to determine if ICFS is a good measure of financial constraints. The data for the 131 sampled firms was obtained from the financial statements on the IRESS database. The dataset was split into constrained versus unconstrained firms using three firm specific splitting variables: firm size, cash flow holding and dividends pay-out. The data was further split into panel 1 (2003 to 2006 covering the period before the global crisis); panel 2 (2006 to 2010 covering the period including the global financial crisis period) and panel 3 (2010 to 2016 covering the post global financial crisis period). The study utilised the system generalized moments method (GMM) regression model that yields consistent estimates even with unbalanced panel data sets and the Fixed Effects estimator. The models were both implemented on STATA 15 software. Samples split based on the dividend pay-out showed the highest ICFS for financially-constrained firms before, during and after the global financial crisis period. ICFS is highest during the period including the global financial crisis years compared to samples split using firm size and cash flow holding. The study concludes that dividends pay-out is the best criterion to distinguish firms into financially-constrained versus unconstrained; the global financial crisis constrained all firms; and that ICFS can be a good measure of financial constraints. The main limitation to the study was that it used a small sample size in relation to other international studies. / NRF