Faculty of Commerce, Law and Management (ETDs)

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    Institutional determinants of dividend policy: the case of African listed firms
    (University of the Witwatersrand, Johannesburg, 2024) Tembo, Margret; Chipeta, Chimwemwe
    This study examines the institutional determinants of dividend policy of African listed firms over the period from 2006 to 2020. While existing research extensively examines institutional influences in developed markets, there is a significant gap in understanding these dynamics within the African context. Utilizing a panel regression approach with generalized method of moments (GMM) estimations, the study comprises three essays. The first essay offers a comprehensive analysis of institutional determinants, specifically examining how investor protection, press freedom, property rights, financial development, and corruption shape dividend policy in African firms. The results underscore the pivotal role of institutional factors, highlighting investor protection, financial development, and press freedom as key determinants. Based on these findings, policymakers should prioritize strengthening investor protection laws, advancing financial sector development, and ensuring press freedom to create a more attractive environment for investment. The second essay explores the relationship between innovation and dividend policy in Africa, revealing a significant negative correlation. It also investigates whether institutional development influences this relationship. Results indicate that institutional development moderates the innovation-dividend policy relationship. The negative relationship is pronounced in countries with weak institutional development and tends to be positive in those with strong institutional development. Based on these findings, policymakers should focus on improving institutional quality to facilitate both innovation and dividend distribution, thereby supporting sustainable corporate growth and shareholder returns. This third essay examines the institutional factors influencing dividend smoothing in African firms. The study finds that African firms exhibit a speed of adjustment (SOA) of 0.539, indicating a moderate level of dividend smoothing, and a target payout ratio of 0.484, suggesting they pay out a high percentage of their earnings as dividends. The research highlights that firms operating in environments with low economic growth, civil law regimes, weak investor protection, weak property rights, low press freedom, underdeveloped financial institutions and markets, high corruption, weak government effectiveness, weak political stability, weak regulatory quality, and weak rule of law tend to engage in increased dividend smoothing. To address this, policymakers and business leaders in African emerging markets should prioritize improving governance and institutional quality. This can mitigate agency costs and information asymmetry, reducing the need for dividend smoothing. Strengthening investor protection, property rights, press freedom, financial markets, and governance standards will create a more stable investment climate. In conclusion, this research underscores the importance of institutional improvements in shaping dividend policies in African non- financial firms
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    Embracing technology to rejuvenate South African mining: a comparative case study analysis of a South African and an Australian mining firm
    (University of the Witwatersrand, Johannesburg, 2024) Vink, Tarryn; Callaghan, Chris
    It is well recognised that the mining industry is the historic bedrock of the South African economy. However, since 2000 the industry has shown signs of decline that include, inter alia, a slowdown in growth along with productivity issues. Since South Africa (SA) lags behind its global competitors in terms of technological innovation and implementation; many leaders in the mining industry are of the view that the increased use of technology will arrest this decline and restore the mining industry to a stronger position in the South African economy. What is, however, not fully understood is the extent to which technological change is contextually path dependent. This meaning that technological change in an industry is restricted by past events which enhance its resistance to change. This results in a lack of knowledge regarding how best to manage technological change. This would include understanding the most suitable implementation methods for certain contexts. The intention of this dissertation is to explain why firms in the South African mining industry lag behind their global competitors in terms of technological adoption. It aims to understand how differing contextual factors influence mining firms’ behavior, that, in turn, has an industry- level effect. It aims to understand how firms should manage this technology properly to optimise its interaction with its environment. Additionally, it aims to understand which theoretical approach, in relation to technological change, mining firms should follow to properly navigate their technological trajectories in light of contextual imperatives. The unit of analysis in this methodology is at the firm level. It takes specific contextual factors into account to determine which method of implementation is more appropriate for new technological advancements. This was executed by conducting two methodology phases. Phase 1 of the methodology which consisted of a holistic comparative case study analysis of a South African and an Australian mining firm. This study phase analysed archival documents that tracked changes in the responses of these mining firms over time. This was conducted using information from their financial statements and company reports, with the aim of investigating how these matched the government and environmental contexts seen in policy and country related documents. Phase 2 of the methodology comprised a qualitative analysis that used individual interviews in an attempt to develop useful insights that contextualise and support the findings of Phase 1. Various theoretical predictions have been derived in the form of propositions. The theory thus inductively developed has been used to answer some how and iii why questions about the strategic responses of firms to contextual imperatives. The study therefore produced a holistic analysis illustrating how each firm engaged with its respective contexts and how this may have resulted in path dependant relationships regarding technological innovation. The research emphasises that the South African mining industry's lag in technological adoption compared to global competitors could be attributed to an imbalanced innovation focus and a restrictive business context. It suggests that firms should address their technological and contextual needs separately to effectively manage innovation. The findings also stress that incremental improvements alone, are unlikely to enable a catch-up up with global leaders. Instead, radical interventions are necessary to shift the current trajectory toward one that prioritises productivity to achieve social objectives, enabling a plausible catch up.
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    The factors affecting the performance of South African Airways and its impact on economic growth
    (University of the Witwatersrand, Johannesburg, 2023) Wana, Zamuxolo; Horvey, Sylvester Senyo
    The study sought to understand the factors that affect the performance of SAA and the impact it has on the economic growth of South Africa. This enterprise services thousands of South Africans every year; importantly, it also supports the national development agenda set out by government. However, SAA is a company in financial distress and has been kept afloat by continuous financial bailout from government. For instance, SAA last recorded a profit in 2011 and has been in continuous decline over the years due to factors like corruption and poor management. The South African government have been providing the much needed financial assistance with the intention to rescue SAA. In 2020, government committed a R10.5 Billion business rescue fund to help the entity in its operational management. This study employed a quantitative methodology where a correlational design was used to describe the linear relationship between the variables of this study. Data was collected from various archives documents, dating from 2001 to 2019. This included annual reports on finances, government reports, publications and budgets on SAA. Content analysis and time series analysis were used to measure and analyse publicly available archives on SAA. The results indicated that almost all the variables are normally distributed. This was further confirmed by the skewedness and kurtosis test for normality, showing consistency in the results. The results for return on equity and taxation showed non-normality based on their significant value, and this was corrected by taking their log transformation. Equity and employee benefits also disclosed a significant positive relationship with the two performance indicators. The findings suggest that the issue of shares to the general public attracts more financial resources to SAA, which ensures stability and higher performance.
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    Accelerating socio-economic justice through inclusive economic-and-employment growth
    (University of the Witswatersrand, Johannesburg, 2023) Isaacs, Nandipha; Pillay, Pundy
    This paper posits that the labour market, through paying jobs, is an important lever for moving people out of poverty to address the social and economic consequences of apartheid in South Africa. The paper explores different parameters related to employment growth, namely the relationship between economic growth and employment growth, which types of business (small versus large) contribute most to employment growth, which sectors contribute most to employment growth, the barriers to employment growth experienced by entrepreneurs, and interventions required to ensure employment growth is inclusive. This research applied the ARDL model to understand the relationship between employment growth and economic growth on an aggregate level, at a sector level and a business size level, using StatsSA and SARB data for the period 2009 - 2019. This was supplemented by interviews with entrepreneurs and subject matter advisors who provided additional insights into the dynamics of employment growth. The findings of the report highlight that there is a positive relationship between economic growth and employment growth in South Africa, confirming that economic growth has contributed positively to the labour market, despite high and rising unemployment. Key sectors also show a positive relationship with economic growth. The findings revealed as well that small business employment has a negative relationship with economic growth. This paper also highlights that indicators that are affected by apartheid are still used in recruitment and promotion decisions, pointing to the need for company practices and policies to be re-looked to ensure Black Africans are not locked out of the economy.
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    The relationship between government debt and economic growth: a multi country study through a Credit Rating Agency perspective (1998-2018)
    (2020) Luthuli, Sanda Siphosakhe
    This study investigates if there is fiscal space in emerging and developing market economies. We use an IS growth equation which is augmented with a non-linear debt term to estimate the turning point below which debt is positively related to growth and above which debt is negatively related to growth. We find that this turning point is on average 62.2% of sovereign debt to GDP. The implication of this is that policy makers should use such a turning point in assessing the fiscal financial sustainability of their economies. This turning point methodology should be used by policy makers to complement other existing methodologies in their fiscal sustainability assessment.