Making a case for foreign direct investments in the South African construction industry

Abstract

The construction industry plays a significant role in the aggregate output formation of any nation's economy. Financing construction projects are capital intensive, and most developing countries' low gross domestic savings necessitate seeking alternative routes for construction project financing. One such route is encouraging the flow of Foreign Direct Investments (FDI) into the construction industry in South Africa. Therefore, this paper investigates the factors influencing the flow of FDI into the South African construction industry. A quantitative technique was employed using professionals in the built environment as the target population. Data were elicited with the aid of a well-structured questionnaire, while data analysis was conducted with appropriate methods, which include the Cronbach alpha test, mean item score, and one-sample t-test. The findings from the study make theoretical contributions to the conversation on ways of boosting construction financing for improved economic development. It provides guidance to relevant stakeholders and prospective investors on the key factors influencing the flow of FDI in the South African construction industry.