Electronic Theses and Dissertations (Masters)

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    Is the Fed Hindering Development? Impacts of US interest rates on growth, income distribution and macroeconomic policy space in developing countries: a demand-led growth model
    (University of the Witwatersrand, Johannesburg, 2023) Vaz, João Emboava; Hein, Eckhard; Lavoie, Marc; Tinel, Bruno
    The US Fed has responded to recent inflation pressures with the most rapid interest rate hike since the 1979-82 Volcker’s disinflation. The hike in the beginning of the 1980s was followed by harsh external crises in the developing world, especially in Latin America. The current situation adds tot that the role the US monetary policy plays on quickly shifting massive capital flows in a world of open and volatile capital accounts (Rey, 2015). On the other hand, interest rate levels remain low on historical levels and developing countries come from decades of relative growth and record international reserve accumulation. Following the recent development in external policy space debates, this thesis aims to understand how a deterioration of external conditions, especially through higher foreign interest rates, may impact growth, income distribution, and macroeconomic policy space in developing countries.
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    An analysis of transient and chronic multidimensional poverty in South Africa between 2008 and 2017
    (University of the Witwatersrand, Johannesburg, 2024) Munzhelele, Tumelo
    This study derives a Multidimensional Poverty Index (MPI) for each wave using data from the South African National Income Dynamics Study (NIDS) between 2008 to 2017. The MPI is measured using the counting method of Alkire and Foster (2011). In addition, the duration approach of Foster (2009) is used to measure, depending on the MPI, whether households suffer multidimensional chronic or transient poverty. Furthermore, variables that increase a household's likelihood of experiencing chronic or transient multidimensional poverty as opposed to never experiencing multidimensional poverty are found using multinomial logit regression analysis. The results show that the MPI decreased from approximately 7% to 4% between 2008 and 2017. Additionally, the share of South African households which experienced multidimensional poverty decreased from approximately 15% to 10% between 2008 and 2017. However, the intensity of poverty has only decreased by two percentage points from 44% during the same period. This indicates that there has not been much progress in the number of dimensions in which poor households are deprived even as multidimensional poverty decreased. Years spent in school for adults living in the household and unemployment were the dimensions which contributed the most towards the MPI for households that were either chronically or transiently poor. Approximately 73% of households in South Africa never experienced Multidimensional Poverty between 2008 and 2017. Based on the specified deprivation score cut-off, between 1% and 13% of South African households were living in chronic multidimensional poverty. Transient multidimensional poverty affected more than 25% of South Africans. Notably, a higher portion of South Africa's multidimensional poverty is transitory in nature. Black households and female-headed households had the highest incidence of both chronic and transient multidimensional poverty. The multinomial logit model indicates that the likelihood of experiencing chronic or transient multidimensional poverty is higher among households led by individuals without formal education, those with an economically inactive head, and those based in rural areas.
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    The role of loyalty programmes on retail fuel site profitability in Gauteng
    (University of the Witwatersrand, Johannesburg, 2021) Mtungwa, Muzi; Lamola, Medupi
    Loyalty programmes are one of a number of instruments used by businesses to retain existing customers, attract new customers and in the process retain them over a long term to sustain business profitability. They have been extensively investigated in the developed world with models developed to explain their role in customer retention. In the developing world, they are still being studied to understand if the models that have been developed in the developed world can be extended to the developing countries. Loyalty programmes were extended to the fuel retail industry in 2010 by First National Bank (FNB) and its oil partner, Engen Petroleum. The role of these programmes in the fuel retail industry and their correlation to profitability, whether positive or negative has received little attention from researchers. Here, the author reports on the correlation of these programmes to business profitability. The report shows that there is a positive correlation between these programmes and the profitability of an oil company, while at the same time the report supports the assertion by the non-loyalty programme oil companies that these programmes have a negative effect on their business. These non- loyalty programme oil companies which have a market share of less than 7 percent have been forced to exit the retail industry due to the introduction of these programmes by the major oil companies and their partners. The findings recommend that the role of these programmes in the fuel retail industry is further researched as the authourities do not allow for discounting of the retail price of petrol
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    An assessment of the determinants of IT entrepreneurs' level of awareness of the most common causes of start-ups failures in Johannesburg, South Africa
    (University of the Witwatersrand, Johannesburg, 2023) Mkhavele, Nhlamulo
    In South Africa, more than 70% to 80% of small to medium-sized businesses (SMMEs) fail within the first three years. In order to gain insight into the level of awareness of IT start-up entrepreneurs regarding the causes of SMME failure, this study conducted an empirical review of the literature and developed a hypothetical framework, the study builds on the work done by Justino Vicente on the factors influencing the failure of small enterprises in order to achieve its objective. It then makes recommendations for future research on the topic. In the aftermath of several economic adversities, prominent among them unemployment, poverty, and HIV and AIDS, SMME failure and success are key among national strategic concerns in the Republic of South Africa, where this study is being conducted in the Johannesburg region. The research employed a quantitative research methodology and the main instruments for gathering data was a survey/ questionnaire, and the snowball sampling method was used. 100 ICT start-ups owners and managers received surveys. The statistical package for the social sciences (SPSS) program was employed to analyse the quantitative data collected. Tables, pie charts, and bar charts were used to display the statistically descriptive results. Due to the many different reasons why SMMEs fail, this study focused its conclusions on the following factors: determinants of IT entrepreneurs' level of awareness of the most common causes of start-ups failures in Johannesburg, South Africa, determinants of accessibility to information of the most common causes of start-up failures and the willingness of entrepreneurs to consume information related to start-up failures were also presented. Among the results of failure include unemployment, societal ills, poverty, and loss of revenue. The study concludes by recommending various interventions to improve the level of awareness
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    Examining the relationship between household debt and economic performance in South Africa
    (University of the Witwatersrand, Johannesburg, 2023-02) Karombe, Stephen; Fasanya, Ismail
    High level of debt has been a major concern in the South Africa recent times. The prevalence of high debt levels hinders savings and investments, thus exerting a detrimental influence on economic growth. This surge in debt can be attributed to the consumer boom experienced in the past decade and the recent proliferation of credit cards, which have made it easier for consumers to access goods and services. This study evaluates the link between household debt and economic performance and characterises the implications of changes in household debt on economic growth in South Africa using the Toda Yamamoto VAR framework, using quarterly data covering the period 2008Q1 to 2022Q2. The connection between household debt and economic growth lies in the Life Cycle Hypothesis. The following findings are discernible from the analysis. First, the study finds that there is a bi-directional relationship between economic growth and mortgage loans and a unidirectional relationship between economic growth and household debt to disposable income ratio. Second, household debt to disposable income has a significant impact on economic growth, whilst the debt service ratio insignificantly affects economic growth with a smaller margin. Third, economic growth responds positively to mortgage loans, while a positive response to household debt exists which is transitory and positive. These results suggest that policymakers should encourage economic agents to take mortgage loans to boost economic growth in the short run. Household debt may be used to boost the economy in the short run but may deter economic growth in the long run. In the meantime, nothing maybe be done in items of debt service ratio as it has no significant impact, however, constant monitoring may be applied to avoid creeping in of debt overhang in the future. Access to household debt should be monitored and controlled since high debt significantly impacts economic growth in the long run
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    Estimating the non-price determinants of meat demand in South Africa
    (University of the Witwatersrand, Johannesburg, 2023) Beghin, Alice; Dikgage, Johane
    There is a pressing need to reduce our environmental footprint, mitigate food-related public health concerns, and ensure sustainable food systems. However, the overconsumption of meat directly undermines these needs. In order for policymakers to adapt policies to reduce the overconsumption of meat, an improved understanding of the drivers behind the demand for meat is required. Meat consumption per capita in developing economies has surpassed levels in developed countries, and is projected to continue increasing. We use South Africa as a case study, given that it is an emerging economy that is characterised by increased meat consumption since 1994. This trend correlates with (and is driven by) increasing per capita income and prices. South Africa’s diverse population (with widely varying incomes and cultures) complicates the regulatory framework required to reduce excessive meat consumption. To support consumers in making environmentally sustainable dietary protein choices, this study aims to gain a deeper understanding of meat-consumption behaviour by consumers, segmented on the basis of their meat consumption. Results were obtained through a 2015 survey of 600 community-dwelling household heads in Gauteng, South Africa. Three segments of consumers were identified by means of a two-step cluster analysis: heavy, average, and low meat consumers. The segments differed significantly in several socio-demographic and background characteristics. The segmented evaluation of consumer groups was confirmed by analysis of variance (ANOVA), which found statistically significant differences of mean weekly meat consumption amongst the three groups. To evaluate the non-price determinants of meat consumption, OLS, Poisson, and negative binomial models were run, and average marginal effects of a negative binomial model were analysed for both the separate consumer groups and the consumers as a whole. It was found that the importance of sustainable living shaped meat consumption for low and average meat consumers. Heavy meat consumers were driven by their enjoyment of the taste of meat and the centrality of meat in their meals. Behavioral economics-based nudges could prevent the overconsumption of meat in South Africa such as using environmental concerns to frame a meat reduction strategy, and challenging the link between meat consumption and gender identity
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    An investigation of the relationship between ICT infrastructure and economic growth of emerging market
    (University of the Witwatersrand, Johannesburg, 2023-02) Jiang, Jun Wen; Fasanya, Ismail
    The study examines the link between Information and Communication Technology, institutional quality, and economic growth in emerging markets over the period of 2000 to 2019, using the system Generalized Method of Moments. The connection between economic growth and technology lies on the framework of exogenous growth model. The following findings are discernible from the study. First, a substantial positive relationship exists between internet usage and economic growth, while a negative association between economic growth and fixed telephone users is evident. Second, a positive association between growth and innovation exist in emerging markets, whilst institutions reveal a negative association. These findings have a significant policy implication for policymakers to monitor innovation factors rather than institutional quality to bypass the digital divide. Consequently, policymakers should pay attention to the benefits of Information and Communication technology usage by means of reducing entries cost whilst improving network facilities transfers
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    A comparative analysis of the impact of Covid-19 and the global financial crisis on capital structure: Evidence from the Johannesburg Stock Exchange
    (University of the Witwatersrand, Johannesburg, 2023) Mjeso, Thandiwe; Chipeta, Chimwemwe
    Since Modigliani and Miller (1958) introduced the modern theory of capital structure, various studies have been conducted on capital structure. This study contributes to the existing capital structure literature by investigating how the Covid-19 pandemic impacted the capital structure of Johannesburg Stock Exchange (JSE) listed non-financial firms and comparing this impact to that of the 2008 global financial crisis. Furthermore, this study seeks to determine the relationship between capital structure and fundamental firm factors (business risk, profitability, firm size, growth, and asset tangibility). To conduct this analysis, the financial data of these firms for the 2005 to 2022 period is extracted from Bloomberg and the Generalized Method of Moments (GMM) model is used to conduct the analysis of this study. The results of this study indicate that Covid-19 did not have a statistically significant impact on the capital structure of the JSE listed non-financial firms whereas, the 2008 global financial crisis had a statistically significant impact. Overall, the results of this study are consistent with the empirical evidence reported by previous studies, and they provide evidence in support of both the trade-off theory and the pecking order theory
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    Youth unemployment in Southern Africa: the role of corruption
    (University of the Witwatersrand, Johannesburg, 2023) Siboyi, Lebo; Mlilo, Mthokozisi
    Youth unemployment in Southern African countries remains a key concern and continues to have undesirable consequences as it leads to stagnant economic growth due to an inactive labour market and increasing pressure on the government to issue security grants amongst other issues. Most countries in Southern Africa have been faced with high youth unemployment, and policies that have been implemented thus far to counter this problem have resulted in limited success. This research aims to achieve two objectives: (i) examine the determinants of youth unemployment in Southern Africa between 1990 and 2019 and (ii) the impact of corruption on youth unemployment. Using a battery of panel data estimations techniques such as OLS, DOLS, and FMOLS simultaneously with the panel ARDL, this study assessed the relationship between corruption and youth unemployment in the 10 Southern African countries from 1990 to 2019. The findings reveal that there is a positive and significant relationship between corruption perception and youth unemployment. That is, as a country becomes less corrupt, youth unemployment increases. The cointegration analysis applied using the Pedroni and Kao tests concludes that there is a presence of a stable, long-run relationship using the combination of the variables from the model. The main conclusion from the study is that there is an indirect relationship between corruption and youth unemployment through the economic growth channel. This paper argued that corruption can promote efficiency by giving way to save time in lengthy and complex processes and rules by encouraging illegal trade. The expansion of the underground economy when corruption increases also aid in absorbing young people in the informal sector. Given that corruption is so embedded in Southern African countries, this paper recommends that when attempting to combat it, measures should be put in place to ensure that young people in the informal economy or participating and benefiting from the loopholes in the legal institutions get absorbed so that youth unemployment does not increase nor exacerbate
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    Linking banking sector competition and access to finance: the case of select Sub-Saharan African countries
    (University of the Witwatersrand, Johannesburg, 2023) Molaba, Kamogkelo; Gwatidzo, Tendai
    Using multi-year firm-level data of 27 Sub-Saharan countries from the World Bank Enterprise Survey (WBES), this study investigates the link between banking sector competition and firms’ access to finance. The paper employs a probit model to measure the link between banking sector competition and access to finance by observing the impact of the four measures of competition namely: CR3, the Panzar and Rosse H-statistic, the Lerner index and the Boone indicator on credit constraints and financing obstacles whilst controlling for certain firm-level and country-level factors. The results are dominantly in line with the market power hypothesis which posits that banking sector competition improves access to finance. Additionally, the link between competition and access to finance depends on other firm-level variables such as top manager experience and industry as well as country-level variables such as institutional quality, credit information and strength of legal rights. The results of this paper are overall consistent with evidence provided by other studies that support the market power hypothesis which suggests that competitive conduct in the banking sector improves access to finance. The policy implications drawn from this study are that policymakers in the SSA region need to implement policies that strengthen competition in the banking sector without hindering efforts to strengthen banks. Policymakers need to also regulate the financing of business by banks to ensure that funds are directed at growing sectors and businesses that will in turn influence the growth of the economy