Interaction between socially responsible investment (SRI) sector and selected macroeconomic variables in South Africa
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The South African Socially Responsible Investment (SRI) Index was launched in 2004 in order to encourage JSE listed companies to comply with issues of environmental, economic and social sustainability. This study analysed the effect of private consumption, employment growth rate, government expenditure, gross domestic investment, import and exports on the SRI Index. Using a co-integration test, error correction model and Granger causality test, the study found a joint long run effect of these macroeconomic variables on the SRI Index. It was only private consumption which had a significant short-run effect on the SRI Index. In general, there was a two way causal relationship between the SRI Index and the selected macroeconomic variables. This study concluded that Sustainable SRIs play an important role in the development of the South African economy.