**Author details**

The plot of the cumulative sum of recursive residuals (CUSUM) and cumulative sum of squares recursive residuals (CUSUMQ ) of the model presented in **Figure 1** indicates stability in the coefficients over the sample period as they fall within the

*Perspectives on Economic Development - Public Policy, Culture, and Economic Development*

The study investigated drivers of international investment decisions in South Africa by means of time series secondary data from the South African Reserve Bank and Quantec EasyData. The bound testing autoregressive distribution lag approach and the Granger causality analysis were employed to achieve the aim of the study. The long-run analysis revealed that all the regressors have a positive relationship

with FDI, but they were not statistically significant with the exception of the dummy with the p-value of 0.0020 which means it is statistically significant. Whilst the outcomes of this study about a positive association between FDI and some of the regressors like labour productivity, interest rates and infrastructural investment seem to be in line with studies such as [39–41], respectively, the findings of a positive relationship between FDI and labour unrest seem to be in inconsistent with [42] who found that labour unrest has a negative impact on FDI. The presence of cointegration was confirmed by the short-run analysis which also confirmed that any deviation from the long-run equilibrium is corrected to return to the long-run equilibrium after a shock. On the other hand, the pairwise Granger causality test

results showed bidirectional causality between FDI and labour unrests.

Empirical findings suggest that government should ensure stable macroeconomic policies. Likewise, policies which promote increase in labour productivity should be encouraged, and labour disputes that result into prolonged strike actions must be minimised; hence consideration of modifying labour laws and regulations is

**Null Hypothesis Obs F-Statistic Prob.** IL does not Granger Cause FDI 39 1.019 0.371 FDI does not Granger Cause IL 0.098 0.907 PL does not Granger Cause FDI 39 0.882 0.423

critical bounds indicated by the 5% significance parameters.

**5. Conclusions**

**Figure 1.** *Stability test results.*

submitted.

**98**

**Appendices and nomenclature**

Itumeleng Pleasure Mongale\* and Livhuwani Baloyi Faculty of Management and Law, University of Limpopo, South Africa

\*Address all correspondence to: itumeleng.mongale@ul.ac.za

© 2019 The Author(s). Licensee IntechOpen. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/ by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
