Long-Run Spatial Inequality in South Africa: Early Settlement Patterns and Separate Development

Globalisation has had an unprecedented impact on the development and well-being of societies across the globe. Whilst the process has been lauded for bringing about greater trade specialisation and factor mobility many have also come to raise concerns on its impact in the distribution of resources. For South Africa in particular this has been somewhat of a contentious issue given the country's controversial past and idiosyncratic socio-economic structure. Since 1994 though, considerable progress towards its global integration has been made, however this has largely coincided with the establishment of, arguably, the highest levels of income inequality the world has ever seen. This all has raised several questions as to whether a more financially open and technologically integrated economy has induced greater within-country inequality (WCI). This study therefore has the objective to analyse the impact of the various dimensions of globalisation (economic, social and political) on inequality in South Africa. Secondary annual time series from 1990 to 2018 were used sourced from the World Bank Development indicators database, KOF Swiss Economic Institute and the World Inequality database. By using different measures of inequality (Palma ratios and distribution figures), the study employed two ARDL models to test the long-run relationships with the purpose to ensure the robustness of the results. Likewise, two error correction models (ECM) were used to analyse the short-run dynamics between the variables. As a means of identifying the casual effects between the variables, a Toda-Yamamoto granger causality analysis was utilised. Keywords: ARDL, Inequality, Economic Globalisation; Social Globalisation; South Africa

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The Integration of Conventional Equity Indices with Environmental, Social, and Governance Indices: Evidence from Emerging Economies

Sustainability ◽

10.3390/su13020676 ◽

2021 ◽

Vol 13 (2) ◽

pp. 676

Author(s):

Ramiz ur Rehman ◽

Muhammad Zain ul Abidin ◽

Rizwan Ali ◽

Safwan Mohd Nor ◽

Muhammad Akram Naseem ◽

...

Keyword(s):

South Africa ◽

Function Analysis ◽

Impulse Response Function ◽

Decomposition Analysis ◽

Individual Country ◽

Brics Countries ◽

Long Run ◽

Integration Test ◽

Short Run ◽

Equity Indices

This study investigates the integration of environmental, social, and governance (ESG) equity indices with conventional indices in Brazil, Russia, India, China, and South Africa (BRICS) individually and across all BRICS countries to better understand regional economic cooperation. Accordingly, we look at daily returns from 13 July 2013 to 28 February 2018 for the Morgan Stanley Capital International (MSCI) ESG indices and MSCI composite indices of the respective countries. To analyze the integration between the ESG equity indices of the sampled countries with their regional and across regional conventional counterparts, the Johansen Co-integration test is employed in this study. Further, the vector error correction model (VECM) is applied to test the causality between the sampled time-series. The impulse response function analysis further explains the impulse responses of each country’s MSCI ESG returns to one standard deviation of innovations to MSCI composite returns of the same country and across countries. Finally, the extent of the MSCI composite returns’ impact on the MSCI ESG returns in the same country indices, and cross-regional indices is examined with variance decomposition analysis. The results suggest that all ESG equity indices are integrated with conventional indices in all BRICS countries. Furthermore, there is a short-or long-run causality between MSCI ESG and MSCI composite equity indices of China and South Africa. Moreover, the study finds only short-run causality between conventional and non-conventional equity indices of Brazil and Russia, whereas we find only long-run causality between India’s non-conventional and conventional equity indices. Finally, the study finds that the all-individual country MSCI ESG equity indices shows a long-run causality with MSCI composite equity indices of all other BRICS countries. The findings also confirm the economic and financial cooperation between the BRICS countries.

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Non-bank financial institutions and economic growth: Evidence from Africa’s three largest economies

South African Journal of Economic and Management Sciences ◽

10.4102/sajems.v20i1.1545 ◽

2017 ◽

Vol 20 (1) ◽

Cited By ~ 2

Author(s):

Ronald Rateiwa ◽

Meshach J. Aziakpono

Keyword(s):

Economic Growth ◽

South Africa ◽

Financial Institutions ◽

Time Series Data ◽

Bank Lending ◽

Series Data ◽

The Sustainable Development ◽

Long Run ◽

The Relationship

Background: In order for the post-2015 world development agenda – termed the sustainable development goals (SDGs) – to succeed, there is a pronounced need to ensure that available resources are used more effectively and additional financing is accessed from the private sector. Given that traditional bank lending has slowed down, the development of non-bank financing has become imperative. To this end, this article intends to empirically test the role of non-bank financial institutions (NBFIs) in stimulating economic growth.Aim: The aim of this article is to empirically test the existence of a long-run equilibrium relationship between economic growth and the development of NBFIs, and the causality thereof.Setting: The empirical assessment uses time-series data from Africa’s three largest economies, namely, Egypt, Nigeria and South Africa, over the period 1971–2013.Methods: This article uses the Johansen cointegration and vector error correction model within a country-specific setting.Results: The results showed that the long-run relationship between NBFI development and economic growth is relatively stronger in Egypt and South Africa, than in Nigeria. Evidence in respect of Nigeria shows that such a relationship is weak. The nature of the relationship between NBFI development and economic growth in Egypt is positive and significant, and predominantly bidirectional. This suggests that a virtuous relationship between NBFIs and economic growth exists in Egypt. In South Africa, the relationship is positive and significant and predominantly runs from NBFI development to economic growth, implying a supply-leading phenomenon. In Nigeria, the results are weak and mixed.Conclusion: The study concludes that in countries with more developed financial systems, the role of NBFIs and their importance to the economic growth process are more pronounced. Thus, there is need for developing policies targeted at developing the NBFI sector, given their potential to contribute to economic growth.

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How applicable is export-led growth and import-led growth hypotheses to South African economy?

Journal of Governance and Regulation ◽

10.22495/jgr_v4_i2_p2 ◽

2015 ◽

Vol 4 (2) ◽

pp. 15-24

Author(s):

Ntebogang Dinah Moroke ◽

Molebogeng Manoto

Keyword(s):

Economic Growth ◽

South Africa ◽

Adverse Effect ◽

Time Series ◽

South African ◽

Time Series Data ◽

Series Data ◽

Long Run ◽

Reserve Bank ◽

Equilibrium Relationship

This paper investigated exports, imports and the economic growth nexus in the context of South Africa. The paper sets out to examine if long-run and causal relationships exist between these variables. Quarterly time series data ranging between 1998 and 2013 obtained from the South African Reserve Bank and Quantec databases was employed. Initial data analysis proved that the variables are integrated at their levels. The results further indicated that exports, imports and economic growth are co-integrated, confirming an existence of a long-run equilibrium relationship. Granger causal results were shown running from exports and imports to GDP and from imports to exports, validating export-led and import-led growth hypotheses in South Africa. A significant causality running from imports to exports, suggests that South Africa imported finished goods in excess. If this is not avoided, lots of problems could be caused. A suggestion was made to avoid such problematic issues as they may lead to replaced domestic output and displacement of employees. Another dreadful ramification may be an adverse effect on the economy which may further be experienced in the long-run.

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Russia’s diversification prospects

Russian Journal of Economics ◽

10.32609/j.ruje.5.34753 ◽

2019 ◽

Vol 5 (2) ◽

pp. 177-198 ◽

Cited By ~ 1

Author(s):

Ivan Lyubimov

Keyword(s):

South Africa ◽

Network Theory ◽

Status Quo ◽

Trade Flows ◽

Detailed Data ◽

Relative Level ◽

Complex Products ◽

Know How ◽

Russian Economy ◽

Long Run

The Russian economy heavily relies on exports of its natural resources. However, the resource-based status quo does not seem to be the route towards Russia’s long-run prosperity. To improve its position in the global income ranking, Russia needs to diversify its exports and make them more complex. Using highly detailed data on trade flows and applying network theory apparatus, we evaluate the level of export complexity in Russia from 1995 to 2016 and compare it with that of its BRICS fellow members. We find that Russia is stagnant with respects to its relative level of export complexity. This sluggishness embraced the entire period between 1995 and 2016, much longer than the stage of anemic growth that started there a decade ago. We also conclude that the current stock of know-how in Russia is relatively low and fragmented, thus not letting Russia diversify into a broad range of more complex products. Russia might also need to export a wider variety of products to richer economies. Today, on a par with Brazil and South Africa, it supplies a broader range of goods to its slowly growing next-door neighbors.

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FDI location and exchange rates. is there really a relationship between the two?

Corporate Ownership and Control ◽

10.22495/cocv13i1c6p3 ◽

2015 ◽

Vol 13 (1) ◽

pp. 642-651

Author(s):

Kunofiwa Tsaurai

Keyword(s):

South Africa ◽

Exchange Rates ◽

Coming Out ◽

Causal Relation ◽

Exact Nature ◽

Bounds Testing ◽

Distributed Lag ◽

Autoregressive Distributed Lag ◽

Long Run ◽

Short Run

The exchange rate led foreign direct investment (FDI), FDI led exchange rates and feedback effect hypotheses summarise the literature around the nature of the relationship between FDI and exchange rates. So many authors on this subject over a long period have been found to generally side with of the above-mentioned hypothesis or another without a consensus. Despite this lack of consensus with regard to the exact nature of the causal relation between these two variables, what is coming out clearly from the literature is that there indeed exist a relationship between FDI and exchange rates. The lack of consensus has prompted this current study that used the ARDL (Autoregressive distributed lag)-bounds testing approach. The study revealed the existence of causality from (1) the rand value to FDI in the long run and (2) FDI to the rand value only in the short run in South Africa. The author recommends that policies which strengthen the value of the rand should be put in place in order to attract FDI in the long run. The flow of FDI into South Africa will in turn not only stabilises the value of the rand.

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Assessing the impact of road transport infrastructure investment on economic development in South Africa

Journal of Transport and Supply Chain Management ◽

10.4102/jtscm.v11i0.324 ◽

2017 ◽

Vol 11 ◽

Cited By ~ 3

Author(s):

Anathi Hlotywa ◽

Emeka A. Ndaguba

Keyword(s):

South Africa ◽

Economic Development ◽

Road Transport ◽

Transport Infrastructure ◽

Development Theory ◽

Explanatory Variables ◽

Endogenous Growth Theory ◽

Long Run ◽

Reserve Bank ◽

The Impact

Background: There has been considerable decline in the investment on road transport infrastructure in recent times, as a result of the dwindling economic investment owing to lowering gross domestic product (GDP) since 2009.Objective: The objective of this study was to examine the relationship between road transport investment (ROTI) and economic development (ED) in South Africa. This article adopts the Harrod–Domar (HD) model of economic growth and development theory, endogenous growth theory and Solow–Swan neoclassical growth model.Method: Data were derived from the South African Reserve Bank, Quantec database and Statistics South Africa (StatsSA) between 1990 and 2014. It used time series, econometric models cointegration and vector error correction model (VECM) to analyse.Result: The results of the estimation demonstrate that the explanatory variables account for approximately 86.7% variation in ED in South Africa. Therefore, there exists a positive relationship between ROTI and ED.Conclusion: This study established a long-run relationship between phenomena and demonstrates the role of road transport investment on economic development in South Africa.

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Impacts of literacy rate and human development indices on agricultural production in South Africa

Agricultural Economics (Zemědělská ekonomika) ◽

10.17221/35/2013-agricecon ◽

2013 ◽

Vol 59 (No. 11) ◽

pp. 531-536

Author(s):

S. Leshoro ◽

T.L.A. Leshoro

Keyword(s):

South Africa ◽

Human Development ◽

Agricultural Production ◽

Agricultural Sector ◽

Labour Force ◽

Small Scale ◽

Literacy Rate ◽

Distributed Lag ◽

Long Run ◽

The Impact

Agriculture is an important sector in South Africa, and the impact that education and human development would have made in this sector via non-white small scale farming was limited through biased policies of the apartheid era. Due to apartheid laws, South Africa found itself with high levels of unskilled labour force. This study seeks to find the impacts of literacy rate and human development indices on agricultural production using Auto Regressive Distributed Lag (ARDL) Bounds Test approach to co-integration. A long run relationship among the variables, agricultural production (agriculture GDP), literacy rate and human development indices were found. Literacy rate has a positively significant effect on agricultural production in the long run while Human Development Index has a positive and significant impact in the short run. This indicates that the apartheid regime fell short in recognizing the positive effect of education in the agricultural sector by denying a descent education to the majority of non-whites which were farm labourers or small scale farmers. This study provides some policy recommendations.  

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The Impact of Productivity, Investment and Real Wages on Employment Absorption Rate in South Africa

Social Sciences ◽

10.3390/socsci8120330 ◽

2019 ◽

Vol 8 (12) ◽

pp. 330 ◽

Cited By ~ 2

Author(s):

Thomas Habanabakize ◽

Daniel Francois Meyer ◽

Judit Oláh

Keyword(s):

South Africa ◽

South African ◽

Absorption Rate ◽

Labour Productivity ◽

Series Data ◽

The South ◽

Real Wages ◽

Long Run ◽

Investment Spending ◽

The Impact

Many developing countries are facing high levels of unemployment and most people who are employed are poorly remunerated due to low skills and productivity levels. Although jobs are important, a productive job is even more important, not only for employees, but also for employers. South Africa, being a developing country, is also facing the challenge of dramatically high levels of unemployment. This study’s aim was to examine both the short- and long-term impacts of real wages, labour productivity and investment spending on employment absorption rates in South Africa. To establish the existing relationship between variables, the study applied several econometric approaches, such as an autoregressive distributed lag (ARDL) model, error correction model (ECM) and a Toda–Yamamoto causality analysis on quarterly time series data from 1995Q1 to 2019Q1. The results revealed the existence of both short- and long-run relationships among the variables. While a positive relationship was found between employment absorption, investment spending and labour productivity, it was found that real wages negatively impact on long-run employment absorption rates. Additionally, the short-run analysis indicated that the lagged employment absorption rate influences the current rate of employment. Furthermore, the causality tests indicated that a bi-directional causal relationship exists between employment absorption and investment spending; and a uni-directional relationship between employment and both real wages and labour productivity. Based on the findings, the study recommends increments of investment spending and labour productivity that enables the South African economy to carry out more activities that would require more workers, thereby improving the employment absorption rate. The fact that labour productivity positively impacts the employment absorption rate infers the requirement for quality and skilled workers to be absorbed in the South African labour market. Therefore, labour skills improvements appear to be a prerequisite for productivity enhancement and job creation.

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