ECONOMETRIC ANALYSISOF THE IMPACT OF FOREIGN DIRECTINVESTMENT ON ECONOMIC GROWTH IN NAMIBIA: EVIDENCEFROM ANNUAL DATA

The driving objective of the study was to measure in quantitative terms theinfluence of foreign direct investment on economic growth through cointegrationtechniques. Namibia was used as a case study. Annualdataset stretching from1990 to 2014 was also applied. The imperative findings arising from the studyconstitutes the following: The study found long-run relationships among all thevariables under consideration in the econometric model. The estimated long-runequation also indicates a positive association between the explanatory variablesand real gross domestic product. In particular, net foreign direct capital was foundto have a stronger influence on economic growth compared to openness and realforeign exchange rate. Correspondingly, aunidirectional relationship runningfrom real exchange rate to net foreign direct investments was found. In addition,amongst the three explanatory variables used in the model, openness and netforeign direct investment contributed more towards innovations in economicgrowth during the forecast horizon compared to real exchange rate variable.Theresearch paper concludes by creating opportunities for further investigations