The economic growth impact of commercial casinos in South Africa

Abstract

Abstract: The controversial subject of casinos as an economic growth tool has received extensive supportive and opposing research over the last decade or so, becoming more and more popular as an economic growth tool. However, the extensive literature on the economic impact of casinos has not always been backed up by empirical support to justify its means as an economic growth mechanism. Research conducted by Walker and Jackson (1998) noted this shortcoming and applied econometric analysis to provide more information on the relationship between casino growth and economic growth in the USA. However, no similar study could be found in South Africa, a country where casinos has long been used as an economic growth tool. The aim of this minor dissertation is to shed some light on the relationship between casino growth and economic growth in South Africa by using the Granger causality statistical test. The results found that casino growth causes economic growth supports the use of casinos as an economic growth tool in South Africa. Finding causality from casino growth to economic growth creates the incentives to also test the degree of causality and analyse the structure behind casino growth causing economic growth. Both these incentives were also analysed in this minor dissertation. A weak causal relationship was found from casino growth to economic growth and supplying vital information by segment analysis of the various channels by which casinos effect economic growth.M.Com

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