What Drives Foreign Portfolio Investment Flows in South Africa?

Authors : Nuru Giritli, Sununu Bah Ibrahim

Pages : 368-380

Doi:10.19168/jyasar.598067

View : 16 | Download : 7

Publication Date : 2020-04-30

Article Type : Research

Abstract :Abstract: The aim of this study is to examine the macroeconomic indicators that pull and/or push foreign portfolio investment (FPI) inflows in South Africa. The ARDL method of co-integration and the bounds test are employed to establish a dynamic relationship between the macroeconomic indicators. The bounds test revealed that there is a long run relationship between FPI and its regressors where all the push and pull variables determine the FPI significantly. The short-run relationship between the FPI and its regressors are also estimated alongside with the rate at which diverging variables return to equilibrium after a short-run shock. Both pull and push variables are significant determinants of FPI in the short-run and it returns to the long-run equilibrium at the speed of 73 percent after a short-run shock.
Keywords : Foreign portfolio investment, Push and pull factors, South Africa