Does public infrastructure investment contribute to economic growth in South Africa?

Sammanfattning: For any developing country, infrastructure is at the core of economic growth and development. South Africa has a modern and well-developed transport infrastructure. The air and rail networks are the largest on the continent, and roads in good condition. To this degree of quality and quantity the purpose of this paper is to investigate whether or not public infrastructure investment contributes to economic growth, which is denoted as GDP per capita in this paper. The period of research is from 1960-2017. The Granger Causality method is applied, to find if a causal relationship exists between these two variables. Additionally, a log-log n OLS name of regression regression will beis run to see how variables, other than public infrastructure investment, affect GDP per capita. The endogenous growth theory is used as the main theory, in order to capture the essence of how the government endogenously affects output per capita in an economy. Findings reveal that there is a unidirectional relationship between public infrastructure investment and economic growth in South Africa. The direction of the causal relationship runs from public infrastructure investment to GDP per capita. Additionally, the infrastructure investment is found to be significant in the logged regression.  run. Which could impliesy that it affects economic growth. For further interest, a dummy variable was added in the regression to check whether the structural break in 1994 in South Africa has significantaffects the interpretation of the results.  changes in interpretation of results.This yielded in no significant changes in the results for infrastructure investment and GDP per capita.  (structural break and more important findings) (variables?) (what organisations can use these findings forFurther, Oorganisations and policy makers can use this paper as an indicator of how infrastructure investment plays a role in an economy, especially in developing countries.