3. Electronic Theses and Dissertations (ETDs) - All submissions

Permanent URI for this community

https://wiredspace.wits.ac.za/handle/10539/45

Browse

Now showing 1 - 9 of 9

A re-evaluation of the estimated overcharge by the South African cement cartel
(2022) Brunette, Alexander
The topic of overcharge estimation regarding cartels is scarce in both the international and domestic regard. This paper aims to re-estimate the overcharge by the South African cement cartel after it was forced to disband following the end of the apartheid regime. In order to avoid the problem of spurious regression results, the time series data are thoroughly analysed for unit roots. To combat the presence of the confirmed nonstationarity, an error correction model is employed in order to yield more accurate estimates. When controlling for nonstationarity, it is found that the price overcharge is higher than that provided by static ordinary least squares regressions and is on par with more recent estimates.
Dimensions of health and well-being in South Africa
(2022) Dobreva, Ralitza
Recent welfare research has widened its focus, incorporating dimensions of satisfaction and health, while relative status, inequality, and perception-based indicators have come to the fore in the array of material well-being measures. This thesis focuses on the relationship between health and material well-being. It has two aims: first, to investigate the reliability of self-rated health (SRH) as an overall health measure in the South African context; and second, to examine the relationships between SRH and socioeconomic status and inequality, taking into account the role of perceptions. Further, the innate gender disparities in these relationships are explicitly recognised throughout. Chapters 2 and 3 approach the first aim from opposing angles. Chapter 2 addresses the reporting heterogeneity in SRH, which is its main disadvantage. The heterogeneous reporting patterns found are similar for men and women, with notable differences in the role of household material resources and location type. Nevertheless, the analysis corroborates international evidence that SRH is an internally consistent measure when employed in panel data analysis. Chapter 3 tests the validity of SRH in the South African context, based on its main advantage as a predictor of the most reliable health indicator: death. Chapter 4 examines the relationships of health with absolute income, rank, and inequality, using both measured and perceived indicators of rank and inequality. The findings show that perceived measures of rank and inequality have a greater impact on SRH than measured indicators, and these effects are stronger for women.
Essays on competition and technical efficiencies in South Africa’s medical scheme industry
(2022) Ndlovu, Thabang
According to existing economic literature there are idiosyncratic elements within healthcare markets that prevent normal market forces, such as competition, to shape the healthcare industry in the same manner as other industries. The reasons for this are regulatory barries to entry, fixed costs, the role of insurance, information frictions and asymmetries. More so, the healthcare sector is comprised of various interconnected sub-sectors that all have their own institutions and nuances. In the South African Context, the Health Market Inquiry, which was conducted by the Competition Commission of South Africa, submit that the South African healthcare sector comprises a complex set of interrelated stakeholders that interact in markets that are not transparent and not quite understood. Given this, the primary objective of conducting this doctoral study was to understand the competition and efficiency dynamics within South African healthcare insurer markets through a collection of related empirical papers on competition and efficiency. Annual firm level data on South African medical schemes was used to study various economic theories using panel data econometric techniques. The results suggest that open medical schemes tended to be more efficient than restricted medical schemes in terms of technical, scale and pure technical efficiency over the sample period. More so, the empirical results reveal that there is room for improvement in terms of efficiencies for both open and restricted medical schemes. This is specifically true for restricted medical schemes. In addition, the empirical results seem to support the view that firms with market power, operating in highly concentrated markets, will limit competition and will operate under a reduced efficiency level. Further, the empirical results revealed that both the structureconduct-performance and efficient structure hypotheses can be rejected in relation to South African medical schemes. The empirical evidence further suggests support for differing hypotheses for open and restricted medical schemes when traditional structural approaches to assessing competition are employed. Moreover, the empirical evidence suggests that the market for restricted medical schemes is highly concentrated and operating under a reduced efficiency level which produces less than desirable outcomes. These findings are supported when nonstructural approaches to competition are employed as the empirical results from the nonstructural approaches to assessing competition suggest that both open and restricted medical schemes are operating under conditions of monopolistic competition. Furthermore, once efficiency is incorporated in the model, the empirical findings still reveal conditions of monopolistic competition
Essays on decomposition of output growth and Total Factor Productivity (TFP) in Sub-Saharan Africa and South Africa’s nine provinces
(2022) Green, Christian Floris
International experience has revealed that countries (national level) and the regions in a country (sub-national level) grow at different rates. Explaining the difference in these growth rates and identifying the sources of this growth have been the focus of growth theory, i.e., neoclassical (exogenous) growth theory advanced by Solow (1956) and Swan (1956) and new (endogenous) growth theory introduced by Romer (1986) and Lucas (1988). Underpinned by these two growth theories, numerous economic studies have established that the difference in growth rates at a national and sub-national level can be attributed to factors such as institutional quality, financial development and human capital (health), while the sources of growth are physical capital, human capital (education), labour, and Total Factor Productivity (TFP). However, the standard growth accounting and cross-country analyses, the empirical techniques of neoclassical and new growth theories do not adequately clarify the sources of growth and their relative impact. The three essays of this PhD thesis use Stochastic Frontier Analysis (SFA), as an alternative empirical technique, to address these limitations. This PhD thesis thus contributes to the growth literature on the importance of the different factors [specifically, institutional quality, financial development and human capital (health)] to the growth rate and the relative importance of the different sources of growth at a national and sub-national level. The growth elements in Sub-Saharan Africa (SSA) (national level) and South Africa’s nine provinces (subnational level) are decomposed through the use of SFA to establish: (i) in Essay 1, that Financial Development (FD) impacts on Technical Efficiency (TE) through Institutions (I), with banking development more important than stock market development in contributing to financial development and consequently increases in productive efficiency, in SSA; (ii) in Essay 2, that in contrast to the established growth literature, physical capital accumulation is more important than TFP in driving the growth in South Africa’s nine provinces and (iii) in Essay 3, that consistently with the literature, health (public health expenditure) has a significant impact on the Technical Efficiency (TE) of South Africa’s nine provinces. To allow the financial sector (banks and stock exchanges) to play its catalytic role in facilitating productive efficiency and economic growth in SSA, policy makers should ensure an appropriate institutional environment (e.g., addressing issues of property rights and government effectiveness). For growth to be sustainable in South Africa’s nine provinces, each provincial government should increase the relevant capital investments [e.g., public sector Gross Fix Capital Formation (GFCF)] and invest in productivity enhancing factors (e.g., human capital, both education and health) that would enrich its growth potential based on its unique requirements.
Infrastructure, institutional quality and infrastructure financing gaps: the casee of selected afreican countries
(2022) Nyamkure, Blondel
The aim of this thesis is to examine three related issues around institutions, infrastructure and economic growth of Sub-Saharan Africa (SSA) economies. The first essay (Chapter Two) chronicles the evolution of the SSA region’s gaps in infrastructure needs and financing. We observed that the SSA region’s infrastructure investment and financing gaps are widening and ballooning over time across the four infrastructure types. We also found evidence of positive and significant correlation between infrastructure quality and institutional quality among a sub-sample of former British colonies in the SSA region, which turn to be weak and insignificant in case of other former colonies. This is also influenced by the influence of the legal origins on the infrastructure development in the SSA region. Also, of interest is the observation that the SSA region’s debt is approaching unsustainable level, in which 40% of this debt burden is as a result of leakages through bureaucrats’ rent-seeking and managerial inefficiency tendencies necessitated by porous, opaque and weak institutions. This serves as a possible reason why the infrastructure investment and financing gaps for SSA economies is continuously widening over time despite funds; more of their funding requirements are lying idle under mutual management funds’ custody, which the region is failing to tape into. Therefore, to close its infrastructure investment and financing gaps, relevant authorities of SSA countries must develop great strong institutions, implement radical structural reforms which crowd-in and promote private sector participation in infrastructure projects. Also, given the complementarity between infrastructure stock and human capital, there is need to massively invest in soft infrastructure such as education and health care. Due to the conspicuous antecedent literature dearth on the institution-infrastructure nexus, the main thrust of the second essay (Chapter Three) is to estimate the static and dynamic threshold level of institutional quality that will ensure stimulation of infrastructure development through efficient use of public debt (PD), government (GR) financial sector funds (FMD) and services as well as crowd in foreign direct investment (FDI) inflows in a panel of 46 Sub-Saharan African region between 2000 and 2017. For robustness of results, we employed a Hansen fixed effects threshold approach, Fully Modified Ordinary Least Squares (FMOLS) static models and Seo and Shin (2016) and Seo et al. (2019) recent theorized dynamic panel threshold regression approaches as informed by the New Institutional Economics theory. For our estimation approach, we adopted non-linear ii asymmetric static and dynamic modeling which gained prominence in recent econometric literature. The dynamic panel data threshold model was estimated using the Seo and Shin (2016) theoretical first differenced Generalized Method of Moments (FDGMM) estimation technique as operationalized by Seo et al. (2019). Though it varies with the aspect of economic and political institutional quality measure and whether entangled or disaggregated, overall, the results revealed that the effect of institutional quality on infrastructure development is nonlinear, with thresholds ranging between 45 – 90% in the static case and 56 – 82% in the dynamic case. This provides support for the use of a threshold regression model, with institutional quality serving as the threshold variable. Further probing was done using PD, FMD, GR and FDI as additional transition variables. In terms of the threshold level, the findings show that the index of institutional quality that will ensure the efficient use of infrastructure in stimulating growth is 0.61. The study also found that, on average, most countries in the region are operating below this threshold level, hence their huge infrastructural investment and financing gaps as well as underdevelopment observed in Chapter Two. The conclusion that is drawn from the analysis is that poor institutional quality is one of the factors hampering development of infrastructure of SSA regional countries. Coupled with a huge debt burden, low institutional quality also hinders efficient allocation of funds by financial institutions towards infrastructure development and reduction of FDI inflow to SSA regional economies. Legal origin has also been found to play a pivotal role in shaping the SSA region’s state of infrastructure development. The major strength of this study is that the methodology employed for the threshold analysis is exhaustive since it encompasses both static and dynamic panel data models developed for single and multiple threshold(s) value(s). Weak political institutions have been found to be a major drag to SSA’s infrastructure development. Thus, it is recommended that governments in the region need to formulate and implement policies targeted at improving the level of economic and political institutional quality in their countries, which can crowd-in both domestic (public and private) and foreign infrastructure investors. Essay three (Chapter four) examines the non-linear threshold effect of infrastructure, quantity, quality and access on economic growth using a rich and robust sample of 46 SSA countries. The study was provoked by the observation that despite its largest infrastructure investment and financing gaps, the SSA region also scored the least on all infrastructure iii aspects across the globe. Furthermore, economy growth of SSA economies stalled post the global financial crisis and inequality and poverty trends were on an upward trajectory. From antecedent literature, we identified the following drawbacks: (a) The literature did not determine the minimum amount of infrastructure quality or quantity which is needed to boost growth; (b). Lack of ascertainment on whether infrastructure quality and quantity has a U or inverted U-shaped effect on growth; (c). Though infrastructure access is directly and indirectly linked to welfare issues, inclusive growth and SDGs, it was conspicuously omitted and(d). at the literature did not explore whether infrastructure quantity, quality and access has complementarity or substitutability effect on growth. These issues form the basis and contribution of this study to the body of existing knowledge. Thus, this study strived to close these gaps by employing a static model (Hansen fixed effects) and dynamic model (System Generalized Methods of Moments (SGMM). We found that, firstly, the infrastructure quantity, quality and access have positive effect on growth of the SSA region, with quantity on the top followed by access and lastly quality. Secondly, the three infrastructure dimensions act as complements as opposed to substitutability since combining the three infrastructure aspects yield more growth benefits than their individual effect. Thirdly, infrastructure quantity and quality have a non-linear U-shaped effect on economic growth of SSA with optimum minima thresholds levels of 60% and 71%, respectively while that of infrastructure quality is linear. Best growth benefits will accrue to the SSA region when the quantity dimension of infrastructure is combining or interacting with both quality and accessibility, followed by quantity and quality and lastly quantity and access. Fourth, relative to the world average benchmark (excluding SSA), the growth benefit of 14.25% per annum accrues to the SSA region if it closes its overall infrastructure gap. In a more granular form, closing the quantity infrastructure gap would deliver higher growth benefit of 8.67% per year, followed by increasing infrastructure accessibility of 3.92% per annum and lastly catching up in terms of quality will raise growth by 1.66% per year. We observed that major contributors were electricity power, road network and improved drinking water. We recommend that SSA governments, development financial institutions (DFIs) and the private sector across the globe, like sovereign wealth funds, pension funds, and insurance companies devote financial resources towards infrastructure investment in the SSA region for it to reach
Merger control - does it matter for South Africa? A review of the IMERYS South Africa (PTY) LTD and andalusite resouces (PTY) LTD merger
(2022) Chomela, Beverley Shongile
In April 2015, the Competition Commission of South Africa (“Commission”) prohibited the merger wherein Imerys South Africa (Pty) Ltd (“Imerys SA”) intended to acquire Andalusite Resources (Pty) Ltd (“AR”) (“the Imerys SA and AR merger”). Mergers happen quite often and sometimes in industries that are strategic for the development of a country. It is therefore important that the decisions taken by the competition authorities are the correct ones, and to understand the impact that these merger decisions have on the industries affected. Using the Critical Loss Analysis (“CLA”) technique, this research paper has evaluated whether the decision by the South African competition authorities to prohibit the Imerys SA and AR merger was correct. Using the CLA, this research tests whether the economic arguments relied upon by the authorities are internally consistent. The paper finds that the authorities were correct in prohibiting the merger between the two firms. This research finds that that the entire premise which the merging parties were basing their arguments on for the approval of the merger was not true. The merging parties were arguing that they would be capacity constrained in the next two to five years following the merger, which meant that even absent the merger, prices of andalusite would increase. This paper finds that Imerys SA and AR are still not capacity constrained and that the decision to prohibit the merger was correct. If the merger had not been prohibited prices of andalusite would have increased by at least five times more than the pre-merger price levels. This shows that merger control proved to be a good tool for promoting competition and protecting consumer welfare in this case. Therefore, merger control of the kind that South Africa has does matter for the South African economy since it ensures that authorities are able to assess and prevent mergers that lead to build up of market power and ensures that consumers (and small and medium sized firms) are able to get competitive prices
Technical cooperation and sub-Saharan Africa’s development dilemma
(2022) Siyanbola, Adedamola Akeem
It has been established by Chenery and Strout (1966) that developing countries do not have sufficient capital that can bring about their much-needed growth and development. In addition to foreign investment (in terms of foreign direct investment (FDI) and foreign portfolio investment), foreign aid has in recent times become a much sought after method of augmenting their stock of capital. This thesis examines the impact of technical cooperation (TC), a subset of foreign aid on the development dilemma that plays out in Sub-Saharan Africa. We chose TC because of its direct impact on development, particularly human development. This thesis employs a three essay method to achieve its objective. Chapter one and chapter five give the introduction and conclusion of the thesis respectively. The middle chapters examine the impact of technical cooperation on development in the region with the assistance of three interlinked essays. The first examines the role of technical cooperation in the development of human capacities in Sub-Saharan Africa while the second essay looks at the impact of technical cooperation on educational development in the region. The third essay focuses on the role of technical cooperation on health outcomes in Sub-Saharan Africa. The objective of the first essay is to examine the role of TC in the development of human capacities through the use of the Human Development Index (HDI) of the United Nation Development Programme (UNDP). It further examines whether the impact is predicated on good policy and institutional quality and whether productivity is the transmission mechanism for TC to human development in Sub-Saharan Africa. We use the Kripfganz (2017) variant of the generalized method of moment (GMM), which permits both linear and non-linear moment conditions and the two-stage sequential regression with analytical second-stage standard error correction of Kripfganz and Schwarz (2015) to analyse our data. Our results show that TC significantly influences human development in SubSaharan Africa (SSA). It also enhances policy formulation, coordination, evaluation, and 6 institutional quality which leads to improved human development. The study also indicates that improvement in productivity is a veritable transmission channel through which TC is routed to human development. The second paper (Chapter three) examines the effectiveness of technical cooperation on educational outcomes in Sub-Saharan Africa. The study analyses panel data of Sub-Saharan African countries for the period 1996 -2018 based on a dynamic autoregressive distributed lag (ARDL) technique. The result suggests that technical cooperation and institutional quality have a significant negative effect on educational attainment while per capital income and gender inequality have a significant positive effect on educational attainment in SSA. In addition, it was found that the lag of educational attainment affects the current, indicating that there is a consistent relationship between the past periods of educational attainment and the present. The study recommends the need to reposition the institutional and policy environment in SSA countries by instituting a more serious and swift legal prosecution of corrupt cases especially those that have to do with foreign aid and grants for education The third essay (Chapter four) investigates the effect of technical cooperation on health outcomes in Sub-Saharan Africa. Previous literature has either focused on SDG-related or non-SDG-related health targets but not both. This study estimates a pool of data from SubSaharan Africa from 1996 to 2018 via the dynamic panel Generalized Method of Moments (GMM) approach. The estimates of the static model suggest that technical cooperation flows to Sub-Saharan Africa translate to an increase in infant mortality rate and immunization. The result of the dynamic panel model finds that immunization is the only component among all the health targets that increase with technical cooperation in Sub-Saharan Africa. However, government health expenditure shows a significant effect on both the SDG and non-SDGrelated health targets tested in the study. It was shown to increase with increased life expectancy, health facilities, and infectious diseases and to decrease with infant mortality rate. The study emphasises the need to reposition technical cooperation to directly stimulate not only immunisation but also other SDG and non-SDG-related health targets. This may be through a prototype model used in the immunisation programme that engages the local government in the provision of house-to-house technical assistance in areas that can improve life expectancy, health facilities and reduce infant mortality rate and infectious diseases in SSA
The distributional impact of foregin direct investment at the local municipal level in South Africa
(2022) Ibrahim, Tomilayo
In recent years, Foreign Direct Investment (FDI) has increased substantially and has spurred the interest of researchers to determine its impact on developing economies. Studies have examined its impact on a wide array of factors including growth, poverty, and inequality. A review of empirical literature on FDI in South Africa revealed that studies did not consider the importance of the spatial interaction effect across local municipalities on FDI inflow. Hence, the study examined the distributional impact of FDI on poverty, income inequality and domestic investment in municipalities at local level in South Africa for the period 2000-2016. It employed Fixed Effects (FE) as the diagnostic tool and the baseline for comparing spatial models. Furthermore, it contributes to empirical research by using spatial regression estimations to account for spatial interactions effect across local municipalities. Several key findings were discovered from the study. First, it finds that FDI contributes significantly to reducing poverty in local municipalities in South Africa. The study also observed the presence of spatial interactions across local municipalities when examining the impact of FDI on poverty. This indicates that FDI inflow in local municipality ‘i” contributes to poverty reduction in neighbouring municipalities. Second, there was no evidence of FDI impacting income inequality in municipalities at the local level. The study also finds that higher income level provinces such as Gauteng are associated with higher levels of income inequality. Lastly, the study suggests that FDI has no relationship with domestic investment at local municipal level in South Africa. This is because FDI is mainly natural-resource based and present in local regions while domestic investment is market-based and present in the urban regions of South Africa. As a result, the study also found no spatial correlation between FDI and domestic investment. The findings of the study has significant policy implications. In order to further reduce poverty in local municipalities, policies to stimulate equal distribution of FDI across regions should be encouraged. Each municipality need to identify their local advantage to attract FDI, therefore, policy initiatives to discover and develop them would be beneficial in attracting more foreign investment. Likewise, backward, and forward linkage should be encouraged to ensure that foreign investors source their inputs locally and engage business owners in advertising and marketing their finished goods.
Wealth and suburban stratification in Cape Town: Investigating the persisting effect of housing segregation
(2022) Chikte, Aliya
This report aims to provide an estimate for the post-Apartheid distribution of growth in residential housing wealth, disaggregated according to historical race-based spatial classifications. Economic policies to address inequality in one of the world’s most unequal contexts have primarily centred on increasing income transfers and expanding the social wage. Despite the removal of legally codified race-based discrimination, inequality in South Africa is increasing both between and within racial groups. The objective of this report is to use the case study of Cape Town in South Africa to demonstrate whether housing wealth plays a role in consolidating, enhancing, or reducing divergence. The paper addresses a gap in the literature by accounting for the impact of race-based socio-spatial penalties on contemporary housing asset values, appreciation, and the accumulation of wealth in an urban and contemporary South African context. Data from the Cape Town General Valuations (GV) roll during 2012 and 2015 is used in combination with Census and historical Apartheid race-based spatial classifications to conduct descriptive and hedonic regression analyses. It is shown that houses in formerly White areas, on average, have a higher initial endowment and grow at 2 percentage points more per year compared to houses in previously Black and Coloured neighbourhoods. Although the difference in growth appears modest, it is shown that during the first 20 years of democracy in South Africa, there was an 8-fold difference, on average, in the additional gains from residential housing between previously White and Black areas.

Browse

Browsing 3. Electronic Theses and Dissertations (ETDs) - All submissions by School "Economics and Finance"

Results Per Page

Sort Options