Trade and Investment Dynamics in South Africa: Implications for Environmental Sustainability

Authors : Hasan Harmancı, Hasan Umutlu

Pages : 17-34

View : 61 | Download : 33

Publication Date : 2025-06-30

Article Type : Research Paper

Abstract :With climate change and environmental pollution worsening each year, especially developing countries are seeking to attract environmentally friendly foreign direct investment (FDI) while reducing dependence on imported energy. In countries like South Africa that rely heavily on coal and other fossil fuels, environmental pollution is increasing, sustainable development is being hampered and the importance of renewable energy sources is becoming more and more recognized. This study examines the relationships between renewable energy consumption, ecological footprint (EF), trade balance and FDI in South Africa over the period 1990-2021 using ARDL bounds test and finds that there is a long run cointegration relationship between these variables. The Toda-Yamamoto causality test results show that the variables affect each other in the long run; FDI, renewable energy consumption and trade balance affect EF, while EF and trade balance affect FDI. An increase in renewable energy consumption contributes to environmental improvement, while an improvement in the trade balance can reduce South Africa\\\'s EF. The study also suggests that the use of renewable energy can positively affect the trade balance and provides policy recommendations, constraints and suggestions for future research.
Keywords : Yenilenebilir Enerji, Ekolojik Ayak İzi, Ticaret Dengesi, Doğrudan Yabancı Yatırımlar, Güney Afrika

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