Original Research

Globalisation and economic growth in South Africa: Do we benefit from trade and financial liberalisation?

Elsabe Loots
South African Journal of Economic and Management Sciences | Vol 6, No 2 | a3311 | DOI: https://doi.org/10.4102/sajems.v6i2.3311 | © 2019 Elsabe Loots | This work is licensed under CC Attribution 4.0
Submitted: 31 July 2019 | Published: 30 June 2003

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Elsabe Loots, Department of Economics, Rand Afrikaans University, South Africa

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Abstract

This article investigates whether the process of globalisation, through trade and financial liberalisation, benefits economic growth in emerging market economies in general and in South Africa in particular. The analysis of trade openness and liberalisation in emerging market economies reveals that trade volume has a relative small impact on GDP per capita, while trade liberalisation led to an approximate 50 per cent increase on GDP per capita. The analysis of the financial dimension showed that capital account openness is associated with a 34 per cent increase in real GDP per capita growth over the period, while financial liberalisation seems to have a dramatic impact of approximately 136 per cent. In South Africa approximately 98 per cent of the current growth performance in the country can be explained by the forces of globalisation.

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