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Original Research
Foreign direct investment, trade openness and growth nexus in Lesotho
Journal of Economic and Financial Sciences | Vol 10, No 1 | a10 |
DOI: https://doi.org/10.4102/jef.v10i1.10
| © 2017 Leseko Makhetha, Joel Rantaoleng
| This work is licensed under CC Attribution 4.0
Submitted: 06 December 2017 | Published: 06 June 2017
Submitted: 06 December 2017 | Published: 06 June 2017
About the author(s)
Leseko Makhetha, National University of Lesotho, South AfricaJoel Rantaoleng, Lesotho Post Bank, South Africa
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This paper examines the long-run relationship among FDI, trade openness and growth in Lesotho for the period 1980-2011. The results show a long-run relationship between output, FDI and trade openness. The VAR Granger causality shows a unidirectional causal relationship running from trade openness, FDI to output and from output, FDI to trade openness. FDI was found to be insignificant in explaining growth of output in both the long and short run. Trade openness was found to be significant with a negative impact on output growth in the long run but was found to be insignificant in the short run.
Keywords
Lesotho; FDI; Trade Openness; ARDL cointegration; VAR Granger causality/Block; Exogeneity Wald tests
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