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Item A series of experimental analyses into the Disposition Effect and its manifestations among South African investor teams(University of the Witwatersrand, Johannesburg, 2023) Shandu, Philani; Alagidede, IhmotepIn behavioural finance literature, there is a significant amount of both empirical and experimental evidence to suggest that prior outcomes impact investment decisions through cognitive biases which most (if not all) human investors succumb to. Among the most pervasive of these biases is the disposition effect, which manifests as the tendency of the investor to sell winning stocks too soon and hold on to losing stocks for too long (Shefrin and Statman, 1985). Critically, the disposition effect is understood to lead to suboptimal portfolio returns (i.e., suboptimal levels of investor welfare). While there have been several studies in other emerging markets, studies remain few in Africa and do not address some of the important issues underpinning the intensity and nature of the disposition effect among African investors. This thesis responds to this gap by designing and analysing several field experiments which explore causal relationships between psycho-social, public health-related, and socio-political factors and the emergence, prevalence, and intensity of the disposition effect among South African university student investor teams participating in the 2019, 2020, and 2021 runs of the Johannesburg Stock Exchange (JSE) Investment Challenge. The thesis is organised into three experimental studies, each speaking to specific theme/s that form the research’s core objective while employing unique data and sound econometric techniques known to be relevant to experimental analysis in finance studies. The first study in Chapter 2 of the thesis endeavours to determine (i) whether the disposition effect exists among South African investor teams, (ii) whether it is causally intensified by a set of psycho-social factors, and (iii) whether the disposition effect causally reduces investor welfare. Among the study’s main findings are that South African investor teams are susceptible to the disposition effect, and that their susceptibility to the bias causally attenuates their investor welfare. Furthermore, low female representation in an investor team is found to causally intensify the disposition effect, subsequently leading to a decrease in investor welfare. Using ii evidence from real-world observation, the study contributes to the literature on team gender diversity and investment decision-making, and – using Hofstede’s (2001) cultural dimensions – it offers a comprehensive account for how differences in culture may lead to differences in gender-related disposition effects across different nationalities. The study also introduces to the literature experimental evidence from the field that clearly demonstrates that – among South African investor teams – a causal relationship exists (i) between female representation and the disposition effect, and (ii) between the disposition effect and investor welfare.Item An analysis of the effectiveness of corporate social responsibility in the mining sector: a comparative study of South Africa and Zimbabwe mining companies(2020) Mandevere, MelodyOver the past years, Corporate Social Responsibility (CSR) has received increased attention from the corporate world and international organisations. There has been a call for an Africanised CSR agenda based on the African context since CSR activities being undertaken in developing countries do not address the root cause of poverty and fail to improve relations with local communities. There is concern over the sustainability of the CSR projects undertaken by mining companies in Zimbabwe and the motives behind CSR activities aimed at benefitting the mining companies’ shareholders and less on the community where they operate. CSR projects in Zimbabwe differ to that of South Africa although the companies are subsidiaries. This comparative study between Zimbabwe and South Africa’s mining sectors has been carried out to analyse the effectiveness of Corporate Social Responsibility activities. The study followed the interpretivism philosophy and the qualitative research design with multiple case studies in the two countries. The target population for the research were two companies with branches in Zimbabwe and South Africa. Hence four mines were chosen, two in Zimbabwe and two in South Africa. A total of 22 respondents were purposively selected consisting of community representatives, mining company representatives, non-governmental stakeholders and governmental stakeholders. Data was triangulated by integrating semi-structured interviews and secondary documents. The findings indicated that in South Africa there is more stakeholder inclusion and ownership of the CSR projects as compared to Zimbabwe. This is more attributed to the nature of the South African legislation on CSR that encourages stakeholder inclusion. The stakeholder inclusion and ownership contributes to project sustainability which then leads to effectiveness of CSR. The research also concluded that an Africanised CSR agenda should prioritize legal iii issues over others. This means African countries need to attend to their legislation so that CSR is mandatory with ‘social impact’ as the driving force. The study contributes to the CSR literature specifically as a comparative study between African countries. This is one of the few empirical studies that compare CSR in neighbouring developing countries. Moreover, the study also addresses whether there is a need for a more Africanised CSR to address the social challenges and understand the effectiveness of the Africanised CSR agenda leading to sustainable developmentItem An integrative cognitive-behavioural framework for predicting collective intelligence in small teams(2020) Yu-Jen Chen, JeffersonLeaders’ capability to empower their employees to form small intelligent teams will profoundly impact the competitiveness of their organisations, considering that unrelenting disruption and fierce competition are the norms in today’s business landscape. In part, owing to this reason, the study of collective intelligence (CI) has emerged as a notable interdisciplinary body of knowledge in recent years. Scholars have regarded CI as the socio-psychological concept that accounts for how team members can derive superior ideas leading to higher performance when working together as collectives instead of as individuals. The study of CI in adults is relatively new ground for management science and various research gaps persist. Not only does a well-validated CI predicting framework not exist, many CI studies were not carried out in settings that closely resemble the real-life organisational context. Some researchers even contest the legitimacy and the existence of CI. To study CI in small teams can be challenging. One of the pertinent challenges is that factors attributing towards the development of individual adults’ intelligence are not well-understood. Newly emerged studies have further highlighted the poor correlation between scores generated from widely-adopted intelligent quotients (IQ) tests and adults’ intelligence. Other studies have asserted that one cannot simply assign adults’ IQ as the results of their biological attributes and further advocate that it is more accurate to study what the cognitive-behaviours are that influence the intelligence of adults in the day-to-day context. In a similar trend of logic, CI researchers have greatly accentuated that an integrative cognitive-behavioural framework that can predict the CI of the small teams is well-needed but has not yet been established. Taking these scholarly recommendations as the basis for the research design, this study regards CI as an emergent asset that arises from the cognitive-behaviours between team members during the problem-solving and decision-making processes. This study assessed the causal relations between twenty hypotheses of three cognitive-behavioural clusters, viz. resource acquisition and utilisation (RAU), strategic thinking (ST) and team members exchange (TMX), and the CI of the Action Learning Project (ALP) teams based on the outcomes of ALP competitions. The lack of academic consensus on how these twenty cognitive-behaviours impact the CI of small teams provides added novelty to this research. Considering that ALP teams are subjected to an environment that shares a fair amount of similarities with the real-life corporate scenarios but with less interference by other complex issues, the empirical findings allow researchers to further their scholarly knowledge, practitioners to design better ALP content and leaders to empower their teams. A questionnaire was developed and tested before inviting research participants to rate their own cognitive-behaviours as individuals and concurrently to assess the same cognitive-behaviours of their teams as collectives. Seeing that CI studies commonly rely on participants’ self-reporting data about the perceptions on their own cognitive-behaviours only but hardly having been probed and compared against the outcome of the participants’ perceptions of their teams as collective, contrasting two surveying approaches allow this study to conclude which approach is more appropriate for CI related studies. The responses of 406 delegates from 12 programmes were deemed fit for use, and the datasets were subjected to various statistical calculations. The findings revealed that the two datasets obtained from the two surveying approaches produced two slightly different structural path models after they were subjected to both descriptive and inferential statistic techniques. The hypotheses were reassigned into different factor dimensionalities, and subsequently, the partial least squares structural equation modelling calculations were applied to these two models. The statistical results indicated that the H-null for one of the 20 hypotheses must be rejected. An explanation was offered. Subsequently, the factors accepted were ranked according to the degree of potential impact on the overall CI of the ALP teams. The plausible rationales and the implications of this ranking are discussed. In addition, it was found that the datasets obtained from the “Rate Team” surveying approach produced a slightly better CI predictability than the ones obtained from the “Rate Self” surveying approach. The suitability of the surveying approach for CI related study is then discussed. Despite the differences between these two structural path models being marginal, this study observed a profound contrast of the key insights of each model. For the model generated from “Rate Self” surveying approach, it underscores the importance of the RAU cognitive-behaviours. Whereas the model generated from “Rate Self” surveying approach advocates that small teams must pay equal emphasis to all three types of cognitive-behaviours (RAU, ST and TMX) in order to boost overall CI of the ALP teams. The findings challenge the popular management philosophy of “culture eats strategy for breakfast”. Instead, the outcome of the study draws attention to the equal importance of gathering and utilising resources, thinking strategically and harnessing helpful styles of interaction among team members. The limitations and contributions were discussed. Recommendations for future studies are also proposed based on the findings uncovered.Item An intersectionality of race and ethnicity: the glass ceiling in the banking sector in Kenya and South Africa(University of the Witwatersrand, Johannesburg, 2021-12) Genga,Cheryl Akinyi MargaretEven though progress has been made in the Kenyan and South African banking sector, Black African women remain a minority in Top Executive leadership positions. Previous research on the “glass ceiling” focuses on Black African women as one homogenous group not acknowledging the diversity dimensions of Black African women from Africa. Invisible factors such as race and ethnicity have been stated to contribute to the glass ceiling in the banking sector, yet this has not been investigated making Black African women more invisible. This research primarily aims to provide an understanding of the intersectionality of race, ethnicity, and career advancement of Black African women in the Kenyan and South African banking sector. This research further aims: to describe the obstacles that Black African women still face, to analyse the diversity of Black African women in management, to identify the reasons as to why some Black African women have been able to crack the glass ceiling in the Kenyan and South African banking sector and to give recommendations to stakeholders as to how they can help crack the glass ceiling for Black African women in the Kenyan and South African banking sector. To address the research objectives, this research applied a qualitative Intercatergorical Intersectionality Approach to provide an understanding of the relationship between race, ethnicity, and gender in the Kenyan and South African banking sector. This was facilitated by the use of semi-structured in-depth interviews and focus groups that were carried out with the participants being Black African women managers in the Kenyan and South African banking sector in Nairobi and Johannesburg, respectively. Data collected from the interviews were transcribed and analysed using thematic analysis in which themes and patterns were identified to address the research objectives. Firstly, findings from the research illustrated a relationship between race, ethnicity, and gender. The extent of the relationship between race, ethnicity, and gender was discussed by the role of race, the role of ethnicity, the intersectionality of race and gender, and the intersectionality of race, ethnicity, and gender in the career advancement of Black African women in the Kenyan and South African banking sector. Secondly, the findings identified the obstacles that Black African women still face in the banking sector, which were discussed and described into three groups: Black African women are their own worst enemies in the banking sector. Thirdly, the findings illustrated the diversity dimensions of Black African women managers from the Kenyan and South African banking sector in relation to their race, ethnicity, and the positions that they held in the banks they were working for. Fourthly, the findings highlighted reasons as to why some Black African women managers had cracked the glass ceiling (discussed with the use of the glass ceiling scale). Fifthly, the findings recommend that stakeholders have to be fully committed if they want to help Black African women crack the glass ceiling in the Kenyan and South African banking sector. In conclusion, through the findings, this research provides a conceptual framework to understand the glass ceiling in relation to the intersectionality of race, ethnicity, and gender of Black African women in the Kenyan and South African banking sector.Item An analysis of the effectiveness of Corporate Social Responsibility in the mining sector: a comparative study of South Africa and Zimbabwe mining companies(2021) Mandevere, MelodyOver the past years, Corporate Social Responsibility (CSR) has received increased attention from the corporate world and international organisations. There has been a call for an Africanised CSR agenda based on the African context since CSR activities being undertaken in developing countries do not address the root cause of poverty and fail to improve relations with local communities. There is concern over the sustainability of the CSR projects undertaken by mining companies in Zimbabwe and the motives behind CSR activities aimed at benefitting the mining companies’ shareholders and less on the community where they operate. CSR projects in Zimbabwe differ to that of South Africa although the companies are subsidiaries. This comparative study between Zimbabwe and South Africa’s mining sectors has been carried out to analyse the effectiveness of Corporate Social Responsibility activities. The study followed the interpretivism philosophy and the qualitative research design with multiple case studies in the two countries. The target population for the research were two companies with branches in Zimbabwe and South Africa. Hence four mines were chosen, two in Zimbabwe and two in South Africa. A total of 22 respondents were purposively selected consisting of community representatives, mining company representatives, non-governmental stakeholders and governmental stakeholders. Data was triangulated by integrating semi-structured interviews and secondary documents. The findings indicated that in South Africa there is more stakeholder inclusion and ownership of the CSR projects as compared to Zimbabwe. This is more attributed to the nature of the South African legislation on CSR that encourages stakeholder inclusion. The stakeholder inclusion and ownership contributes to project sustainability which then leads to effectiveness of CSR. The research also concluded that an Africanised CSR agenda should prioritize legal issues over others. This means African countries need to attend to their legislation so that CSR is mandatory with ‘social impact’ as the driving force. The study contributes to the CSR literature specifically as a comparative study between African countries. This is one of the few empirical studies that compare CSR in neighbouring developing countries. Moreover, the study also addresses whether there is a need for a more Africanised CSR to address the social challenges and understand the effectiveness of the Africanised CSR agenda leading to sustainable developmentItem Antecedents and consequences of online customer brand engagement in business-to-business in an emerging market(University of the Witwatersrand, Johannesburg, 2023) Sibanda, Tonderai Gilbert; Yvonne Kabeya , SainiThe purpose of the research is to study the antecedents and consequences of online CBE in the context of emerging markets and B2B. The role of mediators between CBE and its consequences is yet to be fully explored. CBE has not been studied much in the B2B context in emerging markets. Data was collected from ICT decision makers in South African and Kenya through an online survey on Qualtrics. In total, four studies were done, namely, a pilot study in South Africa, two main studies in South Africa using different samples and the last one in Kenya. A PLS structural equation modelling (SEM) was performed to test the hypothesis using SmartPLS4. A mediation analysis was done to check the effect on mediators between online CBE and its consequences. The research shows that involvement, brand equity, participation and brand love are antecedents of online CBE. Relationship quality amplifies the effect of online CBE on its consequences, namely loyalty, brand advocacy, brand preference and purchase intention. This research provides business and brand managers with ideas on how to approach online CBE in B2B. It shows that a multidimensional approach to online CBE is better because each of the online CBE components are affected by the antecedents differently and each one has a different effect on the consequences. Mediators amplify the effect of online CBE on its consequences. This thesis makes a contribution in four ways: a) It makes an incremental scholarly contribution by bringing together constructs from various cognate theories and study areas relating to relationship management; and investigates how the predictors of customer brand engagement and how customer brand engagement predicts the outcome variables, b) It makes a practical contribution in the sense that it adds to our understanding of the factors that influence customer brand engagement and the expected outcomes of customer brand engagement in practice, c) It also makes a contribution relating to the study of emerging market contexts by drawing data from more than one emerging market country, namely, South Africa and Kenya d) The thesis delves into highly significant and relevant topics, with a notable focus on introducing the construct (CBE) in the B2B context, ii incorporating data from emerging markets. This pioneering inclusion of CBE in a new context highlights the thesis's exceptional contribution, as well as originality, bridging a research gap and expanding knowledge in the field.Item Central bank communication: a survey and content analysis of the South African Reserve Bank’s monetary policy committee statements(2022) Segawa, ArnoldThe South African Reserve Bank (SARB), South Africa’s central bank, adopted inflation targeting in 2000. In 2000, the SARB adopted flexible inflation targeting as a monetary regime and in doing so, set its inflation target at 3%–6% for the CPIX (Coco and Viegi, 2020). However, for inflation targeting to prove effective, it remains vital that the monetary institution in question contains the expectations of the private sector primarily in line with the expectations channel of the transmission (Svensson, 1999). To this end, the role of effective communication has in the past two decades proved vital in monetary policy. This PhD dissertation seeks to evaluate the SARB’s communication strategy, with particular emphasis on its Monetary Policy Committee (MPC) statements, and thereafter appraise its interaction with the media and other market agents. This evaluation takes the shape of three studies, with particular focus firstly on SARB’s MPC statements over the past twenty-one years. This study assesses whether there has been more clarity in SARB’s communication over the past twenty-one years by relying on the Flesch and Flesch-Kincaid methods, which are widely accepted in central bank communication literature. In evaluating SARB’s communications and upon surveying the data, this section offers empirical evidence about SARB’s MPC meeting statements spanning more than two decades, clearly exhibiting its evolution. The second facet of the study examines whether the SARB’s MPC communications between 2010 and 2021 triggered causality in the subsequent news reports from the Mail & Guardian newspaper in South Africa. The study examines whether SARB’s post-MPC statements’ readability was reciprocated in the subsequent Mail & Guardian newspaper articles. Relying on the Flesch-Kincaid Grade Level score and Flesch Reading Ease Score methodology to survey both SARB’s MPC statements and the corresponding Mail & Guardian newspaper articles, a computation is created that is subsequently used to examine Granger causality.Item Cryptocurrencies and African financial markets: integration, risk analysis, and diversification(2021) Kumah, Seyram PearlThe international financial system has witnessed cryptocurrencies as new financial instruments with increased growth in both volume and value and unique risk (return) benefits. The cryptocurrency market is integrating with financial markets which may induce increased investor participation with the chance of excessive liquidity in the cryptocurrency market. This can impair financial stability should there be shocks to the cryptocurrency markets. However, there is as yet little established scientific knowledge about the impact of cryptocurrencies on financial markets with African financial markets completely untouched. Such knowledge is critical since shocks to cryptocurrency markets may have rippling effects on the financial markets. The thesis contributes to fill this gap by investigating the nexus between cryptocurrencies and traditional asset classes in the African financial markets. This may help in understanding the microstructure of financial markets in general and the functioning of African markets in particular for regulating the general financial system. The thesis is organized into four empirical essays, each focusing on a research problem. The first essay examines the level of integration between cryptocurrencies and African stock markets using wavelet-based methods. Findings suggest low degrees of integration between the markets at higher frequencies, but this grows stronger at medium frequencies and perfectly integrates at lower frequencies. Implying that stock markets in Africa are highly exposed to cryptocurrency market disruptions from the medium-term and international investors seeking to hedge their price risk in African stock markets using cryptocurrencies may have to look at the short-term. The phase difference arrow vectors and cross-correlation analysis implying lead (lag) effects are time-varying and heterogeneous, showing no particular cryptocurrency or stock market as leader or follower. Different markets have the potential to lead or lag other markets at varying scales which may induce arbitrage opportunities for international and local investors. The second essay tests the ability of cryptocurrencies as viable alternatives to African fiat currencies during turbulent and tranquil currency conditions implementing the ensemble empirical mode decomposition-based quantile-in-quantile regression. The essay establishes that cryptocurrencies behave differently from African fiat currencies, showing significant negative relationship during extreme fiat currency regimes at medium and lower frequencies. This suggests cryptocurrencies as viable alternative digital currencies and good hedges for African fiat currencies form the medium-term. This essay affords policymakers in Africa and across the globe seeking for viable alternative digital currencies to mitigate currency crises to consider cryptocurrencies from the medium-term. Forex traders may also compensate for losses from currency shocks by using cryptocurrencies to hedge USD/African fiat currency exchange rate risk. In the third essay, we perform cryptocurrency market risk analysis focusing on tail risk and frequency spillover connectedness. The FZL function for joint Value-at-Risk and Expected Shortfall was used to measure tail risk, compare the level of risk, and capital adequacy of cryptocurrencies. Findings suggest Ethereum and Steller as less risky, followed by Monero, Das, Litecoin, Bitcoin, and Ripple, implying that Ethereum and Steller require the least capital to absorb losses. Investigating the time-varying interconnectedness across cryptocurrencies, the study posits that cryptocurrencies are strongely interconnected at high frequencies suggesting contagion risk in the cryptocurrency market and that diversification opportunity is low in the short-term. The essay also evidences time-varying volatility shock transmissions across cryptocurrencies. Economic actors interested in cryptocurrencies can follow this easy to hedge, calculate margins, and capital required to ensure financial stability in the global economy. The fourth essay sheds light on the hedging properties of seven cryptocurrencies (Bitcoin, Litecoin, Ethereum, Das, Ripple, Monero, and Steller) for gold and crude oil price fluctuations at bear (bull) markets across time employing wavelet-based quantile-in-quantile regression. The essay finds that cryptocurrencies provide negative dependences for extreme gold and crude oil price fluctuations from the medium-term, and that all cryptocurrencies are hedges for gold price fluctuations but only four cryptocurrencies (Ethereum, Monero, Ripple, and Steller) are hedges for crude oil price volatilities. The essay also evidences bidirectional causal effects among the assets establishing that when the cryptocurrency market is bearish and the price of gold and crude oil is low, economic actors can hedge the downside risk of the commodities or cryptocurrencies across time using either of the assets. The essay provides precise information to economic agents on risk mitigating strategies for gold and crude oil marketsItem Culture, contraceptive attitudes and advertising perceptions: the case of rural Zimbabwe(2021) Jaravaza, Divaries CosmasThis study examined information processing and behavioural responses to reproductive health advertising in subsistence marketplaces, providing an opportunity to advance marketing science through deepening our understanding of rural consumers‘ patterns of advertising responses (cognitive and affective) and how they relate to values, social axioms, contraceptive attitudes and socio-demographic factors. Birth control and safe sexual practices are important concerns, but, are least understood in the institutional context of subsistence marketplaces (Burgess & Steenkamp, 2006). Study 1 was on relations between culture and contraceptive attitudes and study 2 was on latent classes of advertisements responses to advertisement stimuli designed for subsistence markets. Study 1 and 2 had 395 and 225 respondents respectively. Measurement scales for study 1 were: the Portrait Values Questionnaire, the Social Axioms Scale, and the Contraceptive Attitude Scale. Study 2 used the same scales which were used in study 1 plus Mitchell and Olson‘s (2000) Attitudes Towards the Ad Scale items to evaluate four poster advertisements designed through qualitative research in rural Zimbabwe. Structural equation modeling was done using the rigorous two step approach of Anderson and Gerbing (1988), of which study 1 established that resultant self-conservation and religiosity had positive relations to contraceptive attitudes, whilst, fate control had negative relations to contraceptive attitudes. In study 2, the best fitting model, using latent class analysis, identified three segments of subsistence women‘s cognitive and affective perceptions of poster ads. Rural women‘s public health poster ads responses have not been previously studied. The four poster ads and the cues designed specifically for the unique context of subsistence markets rural consumers are a contribution to advertising research and practice. Also this study is the first to combine contraceptive attitudes, culture and advertising perceptions. Important lessons on ads design, measurement properties of scales and constructs relations are outlinedItem Determinants of intrapreneurial performance within the banking industry in South Africa(University of the Witwatersrand, Johannesburg, 2022) Govender, Thanusha; B, UrbanThe ability for large corporates to remain competitive and grow ahead of the market in an era that has been defined by globalisation, the fourth industrial revolution, and more recently the COVID-19 pandemic has become increasingly difficult. Therefore, it is a critical imperative for organisations to develop a new capability that equips them to navigate the turbulent global macro-economic environment and complex business markets successfully. Globally, banks have experienced severe pressure to transform their business models from capital intense businesses into revenue diversification drivers through new fee-based services. Investors are leaning towards new generation banking models that serve customers holistically, intuitively, and better by employing “new age” technology solutions, as profitability levels within global banks have slipped below the cost of shareholder equity. Coupled with the reality on the ground pre-2020, COVID-19 has become a watershed transformation moment for banks. It has accelerated many long-term banking trends that have resulted in customer shifts in relation to their needs, behaviours and expectations and has subsequently impacted their recovery performance. As such, African banks need to pivot their focus towards growth and relevance by ensuring the establishment of a fundamentally different business model that provides integrated digital ecosystem solutions that go beyond traditional banking, and offer to ensure market competitiveness. Corporate entrepreneurship is a strategic capability that enables organisations to embed innovation as a core competency and simultaneously engage in explorative and exploitative activities, which are essential thrusts in the strategic renewal of a companyItem Determinants of successful coopetition between SMEs in SADC countries – implications for strategy and firm performance(2021) Feela, TshepoThe purpose of the study was to investigate the existence of coopetition (the simultaneous competition and collaboration between two or more firms) amongst the SMEs in the SADC as well as to ascertain whether these relationships have a positive effect on firm performance. Firm performance is divided into financial performance, strategic performance, and innovation performance. Furthermore, an additional aim is to investigate which variable(s) (foresight, risk aversion and exploiting opportunities) moderate the relationship between coopetition and firm performance. The results show that there is strong coopetition amongst SMEs in SADC and that coopetition has a positive and significant effect on firm performance. However, although no variable moderates this relationship, risk aversion has a positive and significant direct effect on firm performanceItem Developing and testing a framework for digital channel adoption in emerging markets(2021) Patel, Muhommed RiyaazThe adoption rate of mobile applications in South Africa and India, both emerging markets, is lower than in developed markets. Emerging economies are unable to use developed market solutions and realise operational efficiencies in business, which can impact customer experience and satisfaction. The effect of digitalisation through mobile commerce in South Africa and India is gaining momentum; from banking to e-commerce, the acceleration of digitalisation is evident across emerging markets. New technologies and platforms are reshaping traditional business models and mobile application adoption is key to digital transformation and commercialisation. However, the context-specific aspects that drive digital adoption in emerging economies may still benefit from further research. This study aims to enhance the literature in this field by examining mobile application adoption in South Africa and India. It develops a model that incorporates the Technology Acceptance Model, Domestication Theory, and Bottom-of-the-Pyramid emerging market characteristics through qualitative analysis. In doing so, the study investigates how digitalisation trends interface with traditional technology adoption models, emerging market characteristics, and domestication characteristics (such as lifestyle integration and community influence). Therefore, by applying a sequential mixed-methods approach, the study seeks to determine the factors that influence mobile application adoption in emerging markets, and to investigate the influence of ecosystems and bottom-of-the-pyramid characteristics on the adoption and usage of technology. The qualitative study provides insight into factors that influence mobile application adoption in India and South Africa from a theoretical framework that was developed from a qualitative analysis and tested empirically. The analysis of 31 semi-structured interviews, 15 from South Africa and 16 from India, is conducted using Computer Assisted Data Analysis Software (CAQDAS) NVivo 12. Subsequently, the data is coded and the themes validated. The quantitative study comprises 2 061 survey questionnaire responses: 1 009 from South Africa and 1 052 from India. These are analysed using SmartPLS path modelling, whereby two structural equation models are developed. The findings suggest that perceived ease of use, perceived risk, perceived value, privacy, user environment, lifestyle integration, customer feedback, awareness and access are all associated with digital adoption. Mediation analysis is also investigated. It shows that awareness and xxi customer feedback mediate the relationship between perceived risk and perceived ease of use. Tests for moderation indicate that access and affordability moderate the relationship between constructs (awareness, customer feedback, and lifestyle integration) as it pertains to intention to use. The developed theoretical framework provides a description of the drivers of digital adoption in emerging markets, specifically in South Africa and India. The findings suggest that participants in India are more knowledgeable than those in South Africa regarding the benefits and use of mobile apps. The study contributes to existing literature and discusses implications for researchers and practitioners.Item The effects of individual and organizational factors on ethical behavior in the South African construction industry(2019) Makonye, ChidoEmployees often face many difficult situations that demand ethical decision making from the viewpoint of society and organizations. Various factors influence the outcome of ethical or unethical decision-making and behaviour of employees. This paper briefly examined some of the major factors that may affect ethical behaviour in construction companies. The strength of these factors may vary from individuals to individuals, organizations to organizations, and situation to situation. The factors that were investigated are personal values, corporate ethical values and the organisational climate. Age and gender were used as moderators in this study. South Africa is a developing country in which many private and public organizations are being faced with a lot of fraud and corruption. It is not only in private organization but also the government. This call for an investigation on ethical behaviour but to solve a problem one must find the source of the problem. The study was designed to answer the major question: Are there any significance relationships between personal values, corporate values and organisational climate and ethical behaviour in the South African construction industry? The researcher employed a quantitative research method. Data collection was done by use of questionnaires distributed to various construction companies. A computer programmer called SPSS version 25 and Microsoft excel were used to analyse data. Descriptive statistics was used to interpret data collected from the first section of the questionnaire that is the biographic information. Linear regression and correlations were used to test the proposed hypothesis. Multiple regression was used to test the moderation effect of age and gender. The findings largely confirm previous studies that personal values and corporate values influence ethical behaviour. However contrary to some previous studies, there was no significant relationship between ethical behaviour and organisational climate. Conclusions, findings and recommendations were drawn from the results.Item Empirical Evaluation of the Possible Impacts of the Transformation of Microfinance Institutions in Africa(University of the Witwatersrand, Johannesburg, 2023) Karuitha, John King’athiaThis dissertation explores the impacts of Microfinance Institutions’ (MFIs) trans- formation from Non-Governmental Organizations (NGOs) model to profit-seeking commercial firms’ model. Specifically, the research examines the drivers of this MFI operating model transformation and the transformation’s attendant effects on financial inclusion in Africa. The study also explores the drivers of financial efficiency, social efficiency and joint socio-financial efficiency of Africa’s MFIs. Lastly, the study examines the prevailing financing structures of Africa’s MFIs and the factors associated with these MFIs’ choice of financing alternatives. Fundamentally, older MFIs and MFIs in civil law countries are more likely to convert their operational mode from the conventional NGO model to the for- profit, financially sustainable model. Additionally, larger MFIs and MFIs located in countries with “other” legal traditions and better institutional quality, are more likely to transform. However, stock market size negatively relates to the odds of transformation. Interestingly, the transformation to the for-profit model negatively affects the depth of MFIs’ outreach. MFIs with NGO-based models reach more women and advance smaller denomination loans. Similarly, NGO- type MFIs have markedly better social efficiency and socio-financial efficiency scores than other MFIs models. Only cooperatives and rural banks consistently outperform traditional NGO-type MFIs in financial efficiency. Stock market and private credit market sizes, proxies for financial sector development, negatively affect social and socio-financial efficiencies. Most MFIs in Africa attain both financial and social goals. However, rural banks and NGO-type MFIs are more likely to achieve the dual goals than other MFI legal forms. Age, size, financial development, institutional quality, legal tradition, and legal status are statistically significant factors in MFIs attaining joint financial and social objectives. Furthermore, at the firm level, size, age, legal status, and profitability drive MFIs’ choice of financing alternatives. For example, asset structure varies inversely with leverage. And at the country level, institutional quality varies inversely with deposits and donations, respectively. Overall, most of these results indicate that the transformation of MFIs in Africa, does not necessarily lead to financial sustainability; instead, it appears to be harmful to the financial inclusion goal. There also seems to exist a need to craft better financing models for MFIs to support their twin objectives of social outreach and sustainabiliyItem Enterprise risk management, corporate governance, performance and risk-taking behaviour of the insurance industry: empirical evidence from Ghana and South Africa(2022) Horvey, Sylvester SenyoThe growing complexities in the business environment have led to the adoption of enterprise risk management (ERM). ERM is a new approach to managing organisational risks holistically to achieve its goals. Regardless of the diversities in the business environment, ERM has become an essential factor for businesses and is believed to enhance shareholder value. Despite the growing number of studies on ERM, literature suffers some limitations regarding its proxies and inconclusive results between ERM and performance. This study adopts a more comprehensive measurement of ERM, which captures various characteristics (such asrisk governance, operational mechanisms, and quality of risk oversight) within the risk ecosystem. The study uses a panel regression technique on a sample of 33 and 63 insurers from Ghana and South Africa, respectively, covering 2015-2019. This thesis is centred on four thematic papers. Each focuses on a specific subject (s) at the heart of the problems or research questions being investigated. The first paper provides a comprehensive and systematic literature review on the measurement and performance of ERM. Google Scholar was the primary search tool for ERM literature spanning 2001 to 2020, and papers listed in SCImago journal ranking were discussed. The study finds that most studies rely on secondary sources, particularly the Chief Risk Officer’s appointment, as a simple ERM proxy. This is widely adopted in the literature due to the difficulty in assessing ERM information. The study recommends that empirical measurement of ERM rely on both primary and secondary data as they complement each other and allow more insight and factors to be considered for a robust ERM measurement. In terms of performance, the ERM literature reveals mixed findings, but enough evidence supports the assertion that ERM enhances firm profitability and value. The study suggests that scholars consider examining the ERM-performance relationship in emerging economies as most of these studies centred on the US and European economies. The second paper analyses the determinants of ERM adoption in Ghana and South Africa using a panel logistic regression technique. Building on the contingency theory, the study posits that several factors contribute to ERM adoption. The study finds that firm size, ownership, leverage, industrial diversification and the type of audit firm are positively associated with ERM adoption in both countries. Findings from the quantile regression also highlight that the initial levels of size, profitability and leverage reduce ERM adoption, and an extreme increase in these factors promotes iii ERM adoption, which implies a nonlinear direct U-shape relationship. On the contrary, the study sees an inverted U-shape for return on assets and leverage for Ghana. Industrial diversification, Big4 audit companies and ownership show consistent patterns of a significant positive effect on ERM adoption at different quantiles for both samples. The findings support the fact that insurers could improve their risk management system by considering the factors that significantly affect them. The third paper first examines the impact of ERM on insurance performance (underwriting performance and Return on Assets) and second investigates how corporate governance (CG) characteristics such as the board size, board independence, and gender diversity interact with ERM in affecting insurance performance. The major findings are summarised as follows: (1) a positive relationship exists between ERM and insurance performance for both countries; and (2) board size, board independence and gender diversity interact with ERM in affecting underwriting performance and return on assets. This was mostly positive and significant in both samples. The study suggests that insurers interested in ensuring an effective ERM system should leverage these corporate governance factors to appreciate the overall impact of ERM on performance. In the final paper, the study examines the linear and non-linear effects of ERM and CG on risktaking behaviour. The result from the linear regression elicits a significant positive relationship between ERM and risk-taking for both countries, implying that insurers with a strong ERM system are more likely to pursue higher risks. The empirical evidence also suggests that board size and board independence have a significant positive impact on risk-taking for both samples. In contrast, gender diversity shows an inverse relationship with risk-taking. Using the dynamic panel regression by Seo et al. (2019), the study confirms non-linearities between ERM, CG and risktaking. Evidence from the South African sample indicates that ERM significantly increases insurers’ risk-taking beyond the threshold level. Again, the South African sample shows significant threshold levels for board size, gender diversity and board independence at 10.03, 0.274 and 0.547, respectively. The Ghanaian sample also documents significant threshold levels at 7, 0.286, and 0.692. The study recommends that insurers consider the significant threshold levels to determine the optimum level of risk that must be pursued.Item Entrepreneurial potential and career choice regret: A focus on switching intention among employees and entrepreneurs in the DRC(University of the Witwatersrand, Johannesburg, 2023) Ephrem, Akilimali Ndatabaye; Murimbika, McEdwardThis thesis is made of four pieces. In the first piece, it is shown that as good as extant measurement scales of entrepreneurial potential might appear in the literature, they suffer from the lack of theory integration and clarity and are fragmented among ‘siloed’ scholars repeating each other without real progress. Through several studies, the thesis develops and validates a new entrepreneurial potential scale, therefore setting an important pre-condition for advancing entrepreneurship theory and practice. The remaining thesis problematizes that, despite the merit of extant studies on career decision regrets, they do not address important questions about the prevalence, the antecedents and consequences of regret arising from choosing entrepreneurship instead of paid employment and vice versa. The thesis examines the mediation role of career choice regret in the relationship between entrepreneurial potential and career switching intention, the moderated effect of entrepreneurial potential on career choice regret, and the moderated effect of the latter on career switching intention. The relationships between the constructs were examined by applying the PLS-SEM on data collected on 721 employees and 724 entrepreneurs from the DRC. In the second piece, it was found out that career choice regret partially mediates the effect of entrepreneurial potential on career switching intention. Thus, a contribution is made to the regret regulation theory by arguing and justifying that, what is or must be regulated is not regret only but also and most importantly the choice and the outcome. In the third piece, evidence is provided that the effect of entrepreneurial potential on career choice regret is moderated by duration in the career, social comparison, former career status, decision justifiability, and perceived environment’s supportiveness. Thus, the thesis reconsiders the regret regulation theory, in particular the propositions that relate to regret cyclicity, decision justifiability and external attributions of regret. In the fourth piece, the thesis examines when individuals consider reversing their career choices to manage regrets. By doing so, the thesis does not only test but also clarifies and extends the regret regulation theory in relation to the post- decision regret management strategies. The findings indicate that individuals consider reversing career choices to manage regrets when: (1) the foregone career is accessible and resistance to change does not prevail; (2) it is not yet too late to do so; (3) they never tried the forgone option or, mistakenly or strategically gave up on it; (4) the decision can benefit from sincere social support and approval of referent individuals; and (5) can advance valued active goals. Overall, the thesis offers novel human resource management and entrepreneurship policy implicationsItem Essays on cryptocurrencies and traditional assets in emerging market economies: dynamic modelling, connectedness, and spillovers(2020) Omane-Adjepong, MauriceThe last decade has experienced notable changes and unique innovations in the global financial system. In particular, the introduction of cryptocurrencies, pioneered by Bitcoin and later other alternative coins (best known as altcoins) by libertarian cryptographers after several efforts in the 1990s to usher in electronic currencies foundered, has been lauded and likewise received enormous attention worldwide, raising many concerns for governments, monetary authorities and other regulatory bodies. Originally designed as electronic cash for decentralised peer-to-peer online financial transactions, secured by cryptographic algorithms, cryptocurrency, a specialised kind of digital currency, in barely a decade of existence, is challenged with an identity crisis. The debate as to what cryptocurrency is, or has become looms in the minds of the general public, and it has been the subject of media commentary. At the same time, the limited amount of research on the topic has only raised more questions than answers. For instance, not only are the existing studies not attacking the root of the deepest questions posed by the rise of cryptocurrencies to date, but also they are not robustly studied methodologically. The depth of analysis is shallow, and the scope of the studies published on the subject matter so far is very limited, both in space and time. Additionally, the extent of the relatedness of the new digital currency market to traditional assets, especially in frontier and emerging economies remains a virgin field. This naturally raises additional concerns: does the emergence of cryptocurrencies offer any relevant economic benefits to these emerging market economies? What implications does this evolution hold for established financial systems? Answers to these questions, and many more are crucial for monetary policy effectiveness, legislation and regulation, financial system stability, the future of cryptocurrencies, and overarchingly, to illuminate the blind spots of the enthusiastic libertarian public, as well as the general investor community. iii In light of the above, this thesis makes a bold attempt at addressing some of the weaknesses of extant research, extend the frontiers of knowledge in this new financial instrument, and shed insights on cryptocurrencies in emerging market economies, proxied by those in the G20. The study produced interesting juxtapositions in three essays. The first essay examined the evolving characteristics of cryptocurrencies under five sub-themes, and presents a map for analysing the cryptocurrency market. We find that Bitcoin and the largest long-lived altcoins are collectively unique instruments that share features of paper money, security assets (mostly equities), and commodity money (such as gold and oil), making the digital currencies a “trinity-hybrid” financial instrument which could best operate under the private sector to complement emerging currencies and assets. For emerging market economies, cryptocurrencies, in our view, is a three-in-one financial instrument, if and only if its role is limited to exchange of goods and services, and helping facilitate transactions of various kinds. This, in turn, raises a number of possibilities for recalibrating the current financial architecture while addressing the regulatory changes that ought to be in place for a well-functioning diversified economy. The second empirical essay found evidence in favour of an extremely weakly correlated market, and later, multifaceted economic benefits of cryptocurrency in times where emerging market economies’ assets wander in distress. This positions the new currency market to the advantage of heterogeneous groups of emerging market investors. However, we caution that expectations of such derived economic benefits need to be examined further on a case by case basis, and in a measured manner, especially given that the cryptocurrency market is still at its embryonic stages of evolution. iv The third and final essay allays the fears of investors and market participants, and reveals for the first time that the cryptocurrency market is less influenced by existing highly integrated instruments, and has little effect on emerging markets, and consequently pose, for now, a negligible danger. At their current level of development, some economies are not yet exposed to the variety of developments in the world of electronic commerce and payment systems that make the algorithms that power the peer-to-peer decentralised ledger platforms seamless. This may change in the future. For now, we are sure that the coming into being of cryptocurrencies is an inevitable consequence of the financial sector paradigms of the last few decades, however, the distributional consequences across regions, countries and among different market participants are largely asymmetric. The insights gleaned from this study, therefore, open doors for policymakers to properly fine-tune their economies to maximise the upside potential presented by this asset class and minimise the downside risks, in the light of what has been learned about the role of cryptocurrencies so far.Item Essays on cryptocurrencies and traditional assets in emerging market economies: dynamic modelling, connectedness, and spillovers(2021) Omane-Adjepong, MauriceThe last decade has experienced notable changes and unique innovations in the global financial system. In particular, the introduction of cryptocurrencies, pioneered by Bitcoin and later other alternative coins (best known as altcoins) by libertarian cryptographers after several efforts in the 1990s to usher in electronic currencies foundered, has been lauded and likewise received enormous attention worldwide, raising many concerns for governments, monetary authorities and other regulatory bodies. Originally designed as electronic cash for decentralised peer-to-peer online financial transactions, secured by cryptographic algorithms, cryptocurrency, a specialised kind of digital currency, in barely a decade of existence, is challenged with an identity crisis. The debate as to what cryptocurrency is, or has become looms in the minds of the general public, and it has been the subject of media commentary. At the same time, the limited amount of research on the topic has only raised more questions than answers. For instance, not only are the existing studies not attacking the root of the deepest questions posed by the rise of cryptocurrencies to date, but also they are not robustly studied methodologically. The depth of analysis is shallow, and the scope of the studies published on the subject matter so far is very limited, both in space and time. Additionally, the extent of the relatedness of the new digital currency market to traditional assets, especially in frontier and emerging economies remains a virgin field. This naturally raises additional concerns: does the emergence of cryptocurrencies offer any relevant economic benefits to these emerging market economies? What implications does this evolution hold for established financial systems? Answers to these questions, and many more are crucial for monetary policy effectiveness, legislation and regulation, financial system stability, the future of cryptocurrencies, and overarchingly, to illuminate the blind spots of the enthusiastic libertarian public, as well as the general investor community. In light of the above, this thesis makes a bold attempt at addressing some of the weaknesses of extant research, extend the frontiers of knowledge in this new financial instrument, and shed insights on cryptocurrencies in emerging market economies, proxied by those in the G20. The study produced interesting juxtapositions in three essays. The first essay examined the evolving characteristics of cryptocurrencies under five sub-themes, and presents a map for analysing the cryptocurrency market. We find that Bitcoin and the largest long-lived altcoins are collectively unique instruments that share features of paper money, security assets (mostly equities), and commodity money (such as gold and oil), making the digital currencies a “trinity-hybrid” financial instrument which could best operate under the private sector to complement emerging currencies and assets. For emerging market economies, cryptocurrencies, in our view, is a three-in-one financial instrument, if and only if its role is limited to exchange of goods and services, and helping facilitate transactions of various kinds. This, in turn, raises a number of possibilities for recalibrating the current financial architecture while addressing the regulatory changes that ought to be in place for a well-functioning diversified economy. The second empirical essay found evidence in favour of an extremely weakly correlated market, and later, multifaceted economic benefits of cryptocurrency in times where emerging market economies’ assets wander in distress. This positions the new currency market to the advantage of heterogeneous groups of emerging market investors. However, we caution that expectations of such derived economic benefits need to be examined further on a case by case basis, and in a measured manner, especially given that the cryptocurrency market is still at its embryonic stages of evolution. The third and final essay allays the fears of investors and market participants, and reveals for the first time that the cryptocurrency market is less influenced by existing highly integrated instruments, and has little effect on emerging markets, and consequently pose, for now, a negligible danger. At their current level of development, some economies are not yet exposed to the variety of developments in the world of electronic commerce and payment systems that make the algorithms that power the peer-to-peer decentralised ledger platforms seamless. This may change in the future. For now, we are sure that the coming into being of cryptocurrencies is an inevitable consequence of the financial sector paradigms of the last few decades, however, the distributional consequences across regions, countries and among different market participants are largely asymmetric. The insights gleaned from this study, therefore, open doors for policymakers to properly fine-tune their economies to maximise the upside potential presented by this asset class and minimise the downside risks, in the light of what has been learned about the role of cryptocurrencies so farItem Essays on private capital flows and real sector growth in Africa(2021) Asamoah, Michael EffahGlobally, countries continue to implement policies aimed at the attraction and retention of capital flows due to its perceived significant effect on economic growth and development. The benefits of capital flows are touted as being able to drive down domestic interest rates, smooth consumption, transfer of technology and improve the functioning of the financial sector. In as much as there is a copious body of literature on capital flows and economic growth, there remain essential areas that the literature has been silent. Among these are capital flows and real sector growth in the light of the allocation puzzle; the real sector amid financial sector development and institutions; private capital flows-macroeconomic volatility-financial development connections, and thresholds in the capital flows-real sector growth dynamics. Filling these gaps will provide the needed knowledge and policy directions on how countries that are known to depend on capital flows can harness these flows for growth and development, especially at the level of the real sector. Using robust econometric procedures, this study examined four thematic areas of capital flows in Africa. The first essay investigated the evidence and/or otherwise of an allocation puzzle and bi-directional relationship between private capital flows and real sector growth. The study covered 42 Sub-Saharan African (SSA) countries between 1980 and 2017. We used growth in manufacturing, industry, agriculture, and services to capture the real sector and proxied private capital flows by foreign direct investment, portfolio equity flows, and private non-guaranteed debt. We employed the two-step dynamic systems GMM model to establish our empirical relationships. We found no evidence in support of the allocation puzzle, which suggests that SSA countries with relatively high growth in the real sector will attract more private capital. However, at a decomposed level, we established a bi-directional relationship of a positive association between debt flows and growth in agriculture and services, with no evidence of an allocation puzzle. Though we found a bi-directional association between debt and industrial growth, the association was detrimental in both directions. Also, the study established a two-way inverse reverse effect between equity flows and manufacturing growth. Finally, while the impact of foreign direct investment on the real sector is positive at the disaggregated level, there is a positive bi-directional effect between foreign direct investment and growths in manufacturing, industry, and service value additions. The study provides a strong foundation for an alternative source of financing, especially for the growth of the service and agriculture sectors regarding debt and equity, from the reliance on the traditional FDI. The findings also indicate parallel reactions between real sector growth and private capital in SSA. The second essay had two separate objectives fused into one. The first part examined the brinks of financial development at which private capital to Africa enhances growth at the level of the real sector. We deployed a newly developed financial development dataset to moderate the association between private capital and the real sector, and the Lewbel instrumental variable two-step GMM estimator (IV –GMM), with Kleibergen-Paap robust standard errors and orthogonal statistics in establishing our empirical relationships over the period 1990 to 2017, for a sample of thirty (30) countries in Africa. Initial estimations at the overall level of the real sector, manufacturing, and industry show that FDI has no growth effects and even worsens the growth of the agriculture sector. Financial development stifles growth. On decomposing the real sector, we found the interaction between FDI and financial development to enhance the growth of the real sector and its components at face value. However, our marginal effect analysis shows that the growth impact of FDI on the overall real sector, industry, and service sector growth starts at the threshold level of the 25th percentile of financial development, while the growth impact on manufacturing is only evident at the 90thpercentile of financial development. Finally, although financial sector growth aids foreign direct investment in enhancing the growth of the agriculture sector, it cannot wholly eradicate the initial adverse impact from FDI. We further found that portfolio equity has no growth impact on Africa’s real sector, while debt flows harm the overall real sector, manufacturing, and industrial growth, but no impact on agriculture and services’ growth. We found that financial development reinforces the conservative view that capital flows enhance economic growth, but the reinforcement depends on the type of sector, either debt or equity, and the percentile levels of financial development. A similar objective was to analyze the interconnections between private capital flows, the quality of institutions, and the growth of the real sector in Africa. The study covers thirty (30) African countries. Our empirical analysis, with a panel data between 1990 and 2017, indicates that private capital flows (FDI, private debt, and equity) have no direct impact on the growth of the real sector. A decomposition divulges that FDI has no impact on manufacturing and detrimental to industrial and agriculture sectors. Portfolio equity is injurious to growth in services and unresponsive to the growth of all other sectors. Private debt was also insensitive to the growth in agriculture and services, and even damaging to manufacturing and industrial growth. Initial assessments show that countries with robust institutional frameworks can benefit significantly from capital flows, as we found institutions do moderate the positive impact of capital flows on the growth of the real sector, starting from the 25th percentile of institutions. Our marginal analysis confirms that the impact of private capital on real sector components is dependent on the type of capital, the sector, and the percentile level on institutions, in some cases, as far as the 90th percentile. Our results show that for policy implementation, it is not a case of one cup fits all, but sector-specific capital flow institutional policies should be the way forward. The orthodox view is that uncertainty is a deterrent to investment, and by extension, private capital inflows. Paying specific attention to the volatility of the domestic exchange rate, private capital flows and a newly developed indicator of financial development, the third chapter of the thesis examined the impact of exchange rate uncertainty on private capital flows, and whether financial development matters in such association. Specifically, the study sought to answer four questions: Is the exchange rate uncertainty –capital flows nexus strictly monotonic? Does exchange rate volatility deter capital flows? Can financial development mitigate the adverse effect of economic uncertainty on capital flows? At what threshold point does financial development jettison the negative impact? The study covers 40 countries over the period 1990 –2017. We establish our empirical relation with a system general method of moments (GMM) two-step robust estimator with orthogonal deviations. We found evidence in support of anon-linear U-shaped relationship between uncertainty and capital flows, and that the impact of uncertainty on capital flows depends on varying levels of uncertainty. We also document that uncertainty deters all forms of capital flows, and that countries with a well-functioning financial system can transform the adverse impact of volatility on capital flows. However, our marginal analysis shows that curbing the adverse effect of volatility on private capital depends on the type of capital flow, the indicator as well as the percentile level on financial sector development, in some cases as far as to the highest percentile. We further established that with the current state of the financial sector, financial institutions’ development offers the quickest route to curtailing the adverse impact of volatility on capital flows, as it has a lower threshold value or critical point compared with financial markets’ development. In the final essay, we investigated the possibilities of non-monotonic or nonlinearities in the capital flows - economic growth dynamics, as some studies posit that the effect of capital flows on economic growth changes course after attaining a certain threshold level, either based on the levels of capital flow itself or some mediating variables. We proxied capital flows by foreign direct investment (FDI) inflows and growth by real sector components. With data from 1990 to 2018, for a sample 36 African countries, the study employed Seo and Shin (2016) dynamic panels threshold effect with endogeneity as well as Seo et al. (2019) estimation of dynamic panel threshold model using Stata to achieve the study’s objectives. In the first part of the analysis, we employed three indicators of human capital development as threshold variables, and FDI flows as the regime dependent variables. These are the mean years of schooling, gross national secondary school enrolment, and primary school pupil to teacher ratio. In the subsequent analysis, we deployed FDI as both the threshold and regime dependent variable. The study found significant thresholds in the capital flows -real sector growth relationship as mediated by human capital and foreign direct investment. The significance impact of foreign direct impact on real sector happens at both the lower and upper levels of the mediating variable but the component of real sector matters. We established that in most cases, the impact of FDI on the growth of the real sector is harmful in the lower regime and beneficial in the upper regime of human capital for both manufacturing and services sectors, and vice versa for both agriculture and industrial sectors. The results indicate that increasing levels of human capital development and FDI inflows are necessary for the growth impact of FDI on Africa’s real sector, but not under all sectors as he results are dependent on the varying threshold variables of both human capital and foreign direct investmentItem Essays on private capital flows and real sector growth in Africa(2021) Asamoah, Michael EffahGlobally, countries continue to implement policies aimed at the attraction and retention of capital flows due to its perceived significant effect on economic growth and development. The benefits of capital flows are touted as being able to drive down domestic interest rates, smooth consumption, transfer of technology and improve the functioning of the financial sector. In as much as there is a copious body of literature on capital flows and economic growth, there remain essential areas that the literature has been silent. Among these are capital flows and real sector growth in the light of the allocation puzzle; the real sector amid financial sector development and institutions; private capital flows-macroeconomic volatilityfinancial development connections, and thresholds in the capital flows-real sector growth dynamics. Filling these gaps will provide the needed knowledge and policy directions on how countries that are known to depend on capital flows can harness these flows for growth and development, especially at the level of the real sector. Using robust econometric procedures, this study examined four thematic areas of capital flows in Africa. The first essay investigated the evidence and/or otherwise of an allocation puzzle and bidirectional relationship between private capital flows and real sector growth. The study covered 42 Sub-Saharan African (SSA) countries between 1980 and 2017. We used growth in manufacturing, industry, agriculture, and services to capture the real sector and proxied private capital flows by foreign direct investment, portfolio equity flows, and private nonguaranteed debt. We employed the two-step dynamic systems GMM model to establish our empirical relationships. We found no evidence in support of the allocation puzzle, which suggests that SSA countries with relatively high growth in the real sector will attract more private capital. However, at a decomposed level, we established a bi-directional relationship of a positive association between debt flows and growth in agriculture and services, with no v evidence of an allocation puzzle. Though we found a bi-directional association between debt and industrial growth, the association was detrimental in both directions. Also, the study established a two-way inverse reverse effect between equity flows and manufacturing growth. Finally, while the impact of foreign direct investment on the real sector is positive at the disaggregated level, there is a positive bi-directional effect between foreign direct investment and growths in manufacturing, industry, and service value additions. The study provides a strong foundation for an alternative source of financing, especially for the growth of the service and agriculture sectors regarding debt and equity, from the reliance on the traditional FDI. The findings also indicate parallel reactions between real sector growth and private capital in SSA. The second essay had two separate objectives fused into one. The first part examined the brinks of financial development at which private capital to Africa enhances growth at the level of the real sector. We deployed a newly developed financial development dataset to moderate the association between private capital and the real sector, and the Lewbel instrumental variable two-step GMM estimator (IV – GMM), with Kleibergen-Paap robust standard errors and orthogonal statistics in establishing our empirical relationships over the period 1990 to 2017, for a sample of thirty (30) countries in Africa. Initial estimations at the overall level of the real sector, manufacturing, and industry show that FDI has no growth effects and even worsens the growth of the agriculture sector. Financial development stifles growth. On decomposing the real sector, we found the interaction between FDI and financial development to enhance the growth of the real sector and its components at face value. However, our marginal effect analysis shows that the growth impact of FDI on the overall real sector, industry, and service sector growth starts at the threshold level of the 25th percentile of financial development, while the growth impact on manufacturing is only evident at the 90th percentile of financial development. Finally, although financial sector growth aids foreign direct investment in enhancing the growth of the agriculture sector, it cannot wholly eradicate the initial adverse impact from FDI. We further found that portfolio equity has no growth impact on Africa’s real sector, while debt flows harm the overall real sector, manufacturing, and industrial growth, but no impact on agriculture and services’ growth. We found that financial development reinforces the conservative view that capital flows enhance economic growth, but the reinforcement depends on the type of sector, either debt or equity, and the percentile levels of financial development. A similar objective was to analyze the interconnections between private capital flows, the quality of institutions, and the growth of the real sector in Africa. The study covers thirty (30) African countries. Our empirical analysis, with a panel data between 1990 and 2017, indicates that private capital flows (FDI, private debt, and equity) have no direct impact on the growth of the real sector. A decomposition divulges that FDI has no impact on manufacturing and detrimental to industrial and agriculture sectors. Portfolio equity is injurious to growth in services and unresponsive to the growth of all other sectors. Private debt was also insensitive to the growth in agriculture and services, and even damaging to manufacturing and industrial growth. Initial assessments show that countries with robust institutional frameworks can benefit significantly from capital flows, as we found institutions do moderate the positive impact of capital flows on the growth of the real sector, starting from the 25th percentile of institutions. Our marginal analysis confirms that the impact of private capital on real sector components is dependent on the type of capital, the sector, and the percentile level on institutions, in some cases, as far as the 90th percentile. Our results show that for policy implementation, it is not a case of one cup fits all, but sector-specific capital flow institutional policies should be the way forward. The orthodox view is that uncertainty is a deterrent to investment, and by extension, private capital inflows. Paying specific attention to the volatility of the domestic exchange rate, private capital flows and a newly developed indicator of financial development, the third chapter of the thesis examined the impact of exchange rate uncertainty on private capital flows, and whether financial development matters in such association. Specifically, the study sought to answer four questions: Is the exchange rate uncertainty – capital flows nexus strictly monotonic? Does exchange rate volatility deter capital flows? Can financial development mitigate the adverse effect of economic uncertainty on capital flows? At what threshold point does financial development jettison the negative impact? The study covers 40 countries over the period 1990 – 2017. We establish our empirical relation with a system general method of moments (GMM) two-step robust estimator with orthogonal deviations. We found evidence in support of a non-linear U-shaped relationship between uncertainty and capital flows, and that the impact of uncertainty on capital flows depends on varying levels of uncertainty. We also document that uncertainty deters all forms of capital flows, and that countries with a well-functioning financial system can transform the adverse impact of volatility on capital flows. However, our marginal analysis shows that curbing the adverse effect of volatility on private capital depends on the type of capital flow, the indicator as well as the percentile level on financial sector development, in some cases as far as to the highest percentile. We further established that with the current state of the financial sector, financial institutions’ development offers the quickest route to curtailing the adverse impact of volatility on capital flows, as it has a lower threshold value or critical point compared with financial markets’ development. In the final essay, we investigated the possibilities of non-monotonic or nonlinearities in the capital flows - economic growth dynamics, as some studies posit that the effect of capital flows on economic growth changes course after attaining a certain threshold level, either based on the levels of capital flow itself or some mediating variables. We proxied capital flows by foreign direct investment (FDI) inflows and growth by real sector components. With data from 1990 to 2018, for a sample 36 African countries, the study employed Seo and Shin (2016) dynamic panels threshold effect with endogeneity as well as Seo et al. (2019) estimation of dynamic panel threshold model using Stata to achieve the study’s objectives. In the first part of the analysis, we employed three indicators of human capital development as threshold variables, and FDI flows as the regime dependent variables. These are the mean years of schooling, gross national secondary school enrolment, and primary school pupil to teacher ratio. In the subsequent analysis, we deployed FDI as both the threshold and regime dependent variable. The study found significant thresholds in the capital flows - real sector growth relationship as mediated by human capital and foreign direct investment. The significance impact of foreign direct impact on real sector happens at both the lower and upper levels of the mediating variable but the component of real sector matters. We established that in most cases, the impact of FDI on the growth of the real sector is harmful in the lower regime and beneficial in the upper regime of human capital for both manufacturing and services sectors, and vice versa for both agriculture and industrial sectors. The results indicate that increasing levels of human capital development and FDI inflows are necessary for the growth impact of FDI on Africa’s real sector, but not under all sectors as he results are dependent on the varying threshold variables of both human capital and foreign direct investment
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