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DECTI Trade Seminar: Foreign Direct Investment in Apartheid and Post-Apartheid South Africa: An Augmented Knowledge-Capital Model

Speaker: Gnanaraj Chellaraj, World Bank

Abstract:  In this paper inbound and outbound FDI between South Africa and a sample of industrialized and developing countries are analyzed for the period 1984-2006. The sample is split into apartheid and post-apartheid periods.  South Africa attracted vertical, low wage seeking FDI from industrialized countries during the apartheid era, and this has not changed during the post-apartheid era. South Africa’s FDI in Sub-Saharan African countries is low wage seeking. During the post-apartheid period, a ten percent increase in the skill abundance of partner industrialized countries relative to South Africa resulted in an average annual 16.83 percent increase in inbound FDI stocks or US$ 125.44 million from the average parent. A ten percent increase in South African skill abundance relative to the developing countries of Sub-Saharan Africa resulted in an average annual 18.26 percent increase in outbound FDI stocks, or US $29.24 million to the average recipient.

For Information: Anna Regina Rillo Bonfield

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