International trade is one of the leading discussions taken not only in South Africa
but worldwide on daily basis. The importance of international trade is that one
country can be able to assist the other country to meet its needs. The level of
economic growth is important in any country not only in South Africa.
The purpose of this study is to examine the impact of foreign trade on economic
growth in South Africa. The findings of this study will demonstrate the light about
positive and negative effects of international trade on economic growth. The
empirical analysis is conducted by using a time series data from 199001 - 201302
quarterly obtained from South African Reserve Bank (SARB) and Organisation of
Economic Co-operation Development (OECD). The study follows a Cointegrated
vector autoregression (CVAR) which contains the following: Augmented Dickey-Fuller
(ADF) and Phillips-Perron (PP) tests for stationarity. The model is also taken
through the Johansen cointegration test and Vector error correction model (VECM).
VECM approach will be followed if cointegration amongst the variables has been
established.
The findings of the study are that all variables have unit root. The cointegration
model emphasizes the long run equilibrium relationship between dependent and
independent variables. The empirical results for the Johansen cointegration test
reject the null hypothesis of no cointegration and suggest the presence of a long
term relationship among all the variables. Empirical investigation reveals that three
variables such as inflation rate , export and exchange rates are positively related to
GOP while other one variable such as import is negatively related to GOP. The
conclusion drawn from this work is that there is a correlation amongst GOP and its
independent variable. This dissertation recommends that The South African
government must start strengthening the competiveness of export by making sure
that it is always balanced with the import. / Thesis (M.Sc. (Economics) North-West University, Mafikeng Campus, 2013
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:nwu/oai:dspace.nwu.ac.za:10394/15166 |
| Date | January 2013 |
| Creators | Mogoe, Seipati |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis |
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