3. Electronic Theses and Dissertations (ETDs) - All submissions
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Item Factors that In uence illiquidity in the South African Banking Industry: Empirical Evidence of Commercial Banks(2019) Tsela, Sifiso.This paper investigates the determinants of illiquidity in the South African banking industry using listed commercial banks. We selected two theoretically established illiquidity measures and perform empirical analysis using rms spe- ci c variables and macroeconomic variables. A xed e¤ect regression model was adopted and the empirical results indicate that total cash to assets ratios and rms market size as proxy by market capitalization are the signi cant factors that in uence illiquidity in the South African banking industry. These results are consistent with the ndings in the literature. Furthermore, we nd no dif- ference between the illiquidity measures used in the study as they lead to the same conclsuion. Keywords: Commercial banks, illiquidity, rms speci c factors 2Item Effective regulation in emerging market banking industries: twin-peaks versus market discipline plank of basel accord(2018) Godspower-Akpomiemie, EuphemiaThis study examines the efficacy and performance effects of two major ideas in financial regulatory innovation: the market discipline principle of Basel II Capital Accord, and the twin-peaks model of financial regulation. These two regulation ideas are examined for their differential effects on emerging market versus developed market banks. Generalized Method of Moments (GMM) estimation and logistic regression techniques are the main tools of analysis in the study, as well as difference-in-differences (DID) technique that is used for robustness checks. Market discipline is found to exist in the banking industries of our sample countries, and bank performance and stability are responsive to the implementation of the market discipline principle. Market discipline affects the two distinct economies of emerging and developed economies differently, with there being higher levels of market discipline from both internally and externally originated market discipline in developed market, than in emerging market economies. The twin-peaks financial regulatory model is found to positively affect banks, with significant improvement on bank performance and stability that is attributable to adoption of twin-peak features by emerging market countries. Interestingly, it is found that market discipline and twin-peaks regulatory model are complements rather than substitutes in the emerging economies’ financial regulatory space. Based on the above findings and various other policy implications of the study, we recommend that countries which have already implemented Basel II’s market discipline principle should also endeavor to implement twin-peaks financial regulatory model as well, for enhanced bank performance. Compliance with financial regulatory policies, in general, is also found to be value-enhancing for national financial markets; therefore, we additionally recommend that countries, of both emerging and developed economy levels, should endeavor to comply with required financial regulatory policies that are already in place.Item The determinants of return on equity in emerging markets financial industry: evidence from Brics(2018) Ndlovu, ChiedzaReturn on equity is believed to be one of the most important financial metrics to measure how well shareholders’ investments into a profit-making organisation are profitably converted into positive and sustainable returns. Investigation into the determinants of return on equity in financial firms is important due to the role of financial system towards economic development. Notwithstanding increased attention received in literature on the determinants of profitability, there still exist important research gaps on how industry structure, macroeconomic fundamentals, financial sector development, capital mobility, efficiency and funding drives return on equity. Chapter 2 examined how return on equity reacts to variations in macroeconomic fundamentals given varying industry structures. The key observation from this chapter is that the influence of macroeconomic fundamentals on return on equity deteriorates as one moves from competitive industries to moderate and highly concentrated industries. In addition, return on equity is highly volatile in highly concentrated industries and less volatile in competitive markets. Chapter 3 investigated the impact of financial sector development on the variations of return on equity using both Granger causality tests and the Generalised Method of Moments. Key findings from this chapter is that return on equity in BRICS financial firms is principally caused by financial sector development through financial integration, however, the impact of financial integration on return on equity is generally negative. Chapter 4 analysed the combined effect of monetary policy regimes and various levels of capital mobility on return on equity. The main findings from this chapter is that return on equity of financial firms is negatively and significantly affected by growth in money supply where the monetary policy regime is expansionary and capital mobility is high or where monetary policy regime is expansionary and capital mobility is moderate or where both monetary policy regime and capital mobility are moderate. Finally, chapter 5 analysed efficiency theories and funding structures as determinants of return on equity. Pioneering evidence from this study reveals that relative measures of funding are highly sensitive to investment companies only while the results from absolute levels of funding are mostly sensitive to banking only.