The relationship between road infrastructure investment and economic growth in South Africa

Abstract

The aims of this dissertation is to investigate the relationship between road infrastructure investment and economic growth and other macro-economic variables such as ICT investment and labour input. Annual time series data between 1960 and 2013 are employed in this dissertation. The gross domestic product, road infrastructure investment, ICT investment and labour input are from the South African Reserve Bank. The quality of road infrastructure and ICT investment results in different decisions that influence business establishments and employment. The enhancement of economic growth requires upgrading, routine, preventative and emergency infrastructure maintenance. The Vector Auto regression (VAR) model was used for the implementation and forecasting of time series data. It was also used to examine the dynamic shock in one variable to another. The Cobb-Douglas production function was also used to test the relationship between infrastructure capital, labour input and ICT investment, whereas gross domestic product is considered as an output. The findings of the study shows the impact of road infrastructure investment, ICT stock and labour input that continues to have positive relation to economic growth.