Ian Ndlovu

The Nexus Between Bank Credit and Economic Growth in the Brics: Panel Granger Causality

Economics and Finance, Dec 31, 2022

This study investigated the causal relationship between banking credit and economic growth within... more This study investigated the causal relationship between banking credit and economic growth within the BRICS economic bloc. The relatively superior economic growth rates of the BRICS have attracted attention from scholars and practitioners in a quest to elucidate their drivers. The indicators for banking credit were total credit to households, general government and non-financial corporations while the gross domestic product, total manufacturing production and total retail trade growth rates were the proxy for economic growth. The study spanned the period from the first quarter of 2008 to the first quarter of 2021. Pairwise panel Granger causality was investigated with respect of all variables in order to establish the direction of causality. The model was used to test for causality in the cross-sectionally dependent heterogeneous BRICS panel data set. The results show that there is unidirectional causality from each of the three credit variables to GDP and retail trade. However, only household and government credit Granger-caused manufacturing production.

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Commodity price volatility, stock market performance and economic growth: evidence from BRICS countries

The study investigated the nexus between commodity price volatility, stock market performance, an... more The study investigated the nexus between commodity price volatility, stock market performance, and economic growth in the emerging economies of Brazil, Russia, India, China, and South Africa (the BRICS) predicated on two hypotheses. First, the study hypothesised that in modern integrated financial systems, commodity price volatility predisposes stock market performance to be non-linearly related to economic growth. The second hypothesis was that financial crises are an inescapable feature of modern financial systems. The study used daily data on stock indices and selected commodity prices as well as monthly data on national output proxies and stock indices. The study analysed data for non-linearities, fractality, and entropy behaviour using the spectral causality approach, univariate GARCH, EGARCH, FIGARCH, DCC-GARCH, and Markov Regime Switching (MRS)-GARCH. The four main findings were: first, spectral causality tests signalled dynamic non-linearities in the relationship between the three commodity futures prices and the BRICS stock indices. Second, the predominantly non-linear relationship between commodity prices and stock prices was reflected in the nexus between the national output proxies and the indices of the five main commodity classes. Third, spectral causality analysis revealed that the causal structures between commodity prices and national output proxies were non-linear and dynamic. Fourth, the Nyblom parameter stability tests revealed evidence of structural breaks in the data that was analysed. The DCC-GARCH model uncovered strong evidence of contagion, spillovers, and interdependence. The study added to the body of knowledge in three ways. First, micro and macro levels of commodity price changes were linked with corresponding stock market performance indicator changes. Second, unlike earlier studies on the commodity pricestock market performanceeconomic growth nexus, the study employed spectral causality analysis, single-regime GARCH analysis, Dynamic Conditional Correlation (DCC)-GARCH and a two-step Markov-Regime-Switching-GARCH as a unified analytical approach. Third, spectral causality graphs depicting relationships between stock indices and national output proxies revealed benign business cycle effects, thus, contributing to broadening the scope of business cycle theory.

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THE NEXUS BETWEEN BANK CREDIT AND ECONOMIC GROWTH IN THE BRICS: PANEL GRANGER CAUSALITY

by Ian Ndlovu and Samkelisiwe Bhebhe

Economics and Finance, 2023

This study investigated the causal relationship between banking credit and economic growth within... more This study investigated the causal relationship between banking credit and economic growth within the BRICS economic bloc. The relatively superior economic growth rates of the BRICS have attracted attention from scholars and practitioners in a quest to elucidate their drivers. The indicators for banking credit were total credit to households, general government and non-financial corporations while the gross domestic product, total manufacturing production and total retail trade growth rates were the proxy for economic growth. The study spanned the period from the first quarter of 2008 to the first quarter of 2021. Pairwise panel Granger causality was investigated with respect of all variables in order to establish the direction of causality. The Dumitrescu & Hurlin (2012) model was used to test for causality in the cross-sectionally dependent heterogeneous BRICS panel data set. The results show that there is unidirectional causality from each of the three credit variables to GDP and retail trade. However, only household and government credit Granger-caused manufacturing production.

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Mobile Banking the Future to Rural Financial Inclusion: Case Study of Zimbabwe

by Ian Ndlovu and MERCY NDLOVU

IOSR Journal of Humanities and Social Science, 2013

The vitality of technology utilisation by banks in establishing competitiveness in rural areas is... more The vitality of technology utilisation by banks in establishing competitiveness in rural areas is unarguable. This paper provides primary information to guide banks in structuring their marketing strategies, quality improvements and business processes on the backdrop of rural milieus in order to achieve financial inclusion. The sample comprised of respondents drawn from various banks, agents of mobile operators, rural residents including farmers from irrigation schemes in Gwanda District. The hypothesis of study was that mobile money is reducing rural financial exclusion faster than traditional rural banking, microfinance and financial development aid. The majority of small scale rural business people were influenced to bank with banks which use advanced modern banking technologies and are partnering with mobile network operators because of convenient service and the reduction of trips made to urban centres for banking purposes. A lot of credit was given by rural dwellers to the Ecocash product of ECONET which enables small scale rural business people to undertake many low value money transfers as well as payments for their business activities. The study concludes that mobile banking has potential in reducing poverty by bringing into mainstream economic activity the previously excluded rural communities.

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Commodity price volatility, stock market performance and economic growth: evidence from BRICS countries

The study investigated the nexus between commodity price volatility, stock market performance, an... more The study investigated the nexus between commodity price volatility, stock market performance, and economic growth in the emerging economies of Brazil, Russia, India, China, and South Africa (the BRICS) predicated on two hypotheses. First, the study hypothesised that in modern integrated financial systems, commodity price volatility predisposes stock market performance to be non-linearly related to economic growth. The second hypothesis was that financial crises are an inescapable feature of modern financial systems. The study used daily data on stock indices and selected commodity prices as well as monthly data on national output proxies and stock indices. The study analysed data for non-linearities, fractality, and entropy behaviour using the spectral causality approach, univariate GARCH, EGARCH, FIGARCH, DCC-GARCH, and Markov Regime Switching (MRS)-GARCH. The four main findings were: first, spectral causality tests signalled dynamic non-linearities in the relationship between the three commodity futures prices and the BRICS stock indices. Second, the predominantly non-linear relationship between commodity prices and stock prices was reflected in the nexus between the national output proxies and the indices of the five main commodity classes. Third, spectral causality analysis revealed that the causal structures between commodity prices and national output proxies were non-linear and dynamic. Fourth, the Nyblom parameter stability tests revealed evidence of structural breaks in the data that was analysed. The DCC-GARCH model uncovered strong evidence of contagion, spillovers, and interdependence. The study added to the body of knowledge in three ways. First, micro and macro levels of commodity price changes were linked with corresponding stock market performance indicator changes. Second, unlike earlier studies on the commodity pricestock market performanceeconomic growth nexus, the study employed spectral causality analysis, single-regime GARCH analysis, Dynamic Conditional Correlation (DCC)-GARCH and a two-step Markov-Regime-Switching-GARCH as a unified analytical approach. Third, spectral causality graphs depicting relationships between stock indices and national output proxies revealed benign business cycle effects, thus, contributing to broadening the scope of business cycle theory.

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Impact of Internet Banking on the Zimbabwean Banking Sector an Application of the Multinomial Logit Modelling

In 2011 Internet World Stats, pegs internet use at 11.5 percent in Zimbabwe but actual internet b... more In 2011 Internet World Stats, pegs internet use at 11.5 percent in Zimbabwe but actual internet banking users constituted a fraction of the internet users. The adoption of internet banking in Zimbabwe has been sluggish over the past decade owing to the economic recession that Zimbabwe experienced from 2003-2008. The study’s major goal was to assess the impact of internet banking on banks in Zimbabwe. The maintained hypothesis was that internet banking had no impact on the banking sector. A cross sectional survey was used to gather information and views were drawn from fourteen commercial banks and the central bank. Three sets of questionnaires, each for a specific group were distributed. The research findings revealed that the competitive advantage of internet banking lies in cost reduction and consumer satisfaction. The study found out that internet banking improved operational efficiency. The major factors for the efficiency were attributed to the overall decrease in operational c...

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The impact of world oil and food price shocks on the interdependence of Brazil and Russia: SVAR-DCC-GARCH model

BRICS Journal of Economics

This study seeks to identify the extent to which global oil and food price volatilities affected ... more This study seeks to identify the extent to which global oil and food price volatilities affected the interdependence of the Brazilian and Russian economies in the period from 1996 to 2021. The ARCH/GARCH framework was used to model the volatility of oil and food prices. The Structural Vector Autoregressive (SVAR) approach was used to ascertain the sensitivity of key economic indicators to oil and food shocks. The Impulse Response Function (IRF) was used to trace short-term effects over a period of 12 months. Subsequently, the multivariate dynamic conditional correlation DCC-GARCH model, created by Engle & Sheppard (2001), was used to model time-varying correlations of paired macroeconomic variables. This study contributes to the empirical literature in two fundamental ways. Firstly, it pairs the two largest oil and food producers in the BRICS bloc. Secondly, unlike some earlier studies, the applied methodology ensures the effectiveness of the results by using stationary time series ...

Benefits and Risks of E-Banking : Case of Commercial Banking In Zimbabwe

This research paper sought to analyse the benefits and risks of electronic banking for commercial... more This research paper sought to analyse the benefits and risks of electronic banking for commercial banks in Zimbabwe. A cross sectional survey was used to address the objectives and hypothesis of the study. The results revealed that e-banking in Zimbabwe has five critical success factors which are the use of e-banking for cutting costs, to enhance customer loyalty, to offer convenience, to improve profitability and competitive marketing. The study showed that the major benefits of e-banking are improved convenience to customers, cost reduction and an improvement in customer loyalty. The perceived risks of e-banking were revealed to be low levels of computer literacy, low security levels, lack of access to the internet for the majority of the population and operational problems associated with computer systems for most banks. The findings of the study imply that banks should invest more in improving customer awareness of e-banking products and reduce perceive risks of e-banking. The government and monetary authorities must improve legislation and infrastructure to encourage faster adoption of e-banking technologies.

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IMPACT_OF_INTERNET_BANKING_ON_THE_ZIMBABWEAN_BANKING_SECTOR-AN_APPLICATION_OF_THE_MULTINOMIAL_LOGIT_MODELLING.pdf

by Ian Ndlovu and Agnes Siyavora

Zimbabwe has been sluggish over the past decade owing to the economic recession that Zimbabwe exp... more Zimbabwe has been sluggish over the past decade owing to the economic recession that Zimbabwe experienced from [2003][2004][2005][2006][2007][2008]. The study's major goal was to assess the impact of internet banking on banks in Zimbabwe. The maintained hypothesis was that internet banking had no impact on the banking sector. A cross sectional survey was used to gather information and views were drawn from fourteen commercial banks and the central bank. Three sets of questionnaires, each for a specific group were distributed. The research findings revealed that the competitive advantage of internet banking lies in cost reduction and consumer satisfaction.

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Mobile Banking the Future to Rural Financial Inclusion: Case Study of Zimbabwe

The vitality of technology utilisation by banks in establishing competitiveness in rural areas is... more The vitality of technology utilisation by banks in establishing competitiveness in rural areas is unarguable. This paper provides primary information to guide banks in structuring their marketing strategies, quality improvements and business processes on the backdrop of rural milieus in order to achieve financial inclusion. The sample comprised of respondents drawn from various banks, agents of mobile operators, rural residents including farmers from irrigation schemes in Gwanda District. The hypothesis of study was that mobile money is reducing rural financial exclusion faster than traditional rural banking, microfinance and financial development aid. The majority of small scale rural business people were influenced to bank with banks which use advanced modern banking technologies and are partnering with mobile network operators because of convenient service and the reduction of trips made to urban centres for banking purposes. A lot of credit was given by rural dwellers to the Ecocash product of ECONET which enables small scale rural business people to undertake many low value money transfers as well as payments for their business activities. The study concludes that mobile banking has potential in reducing poverty by bringing into mainstream economic activity the previously excluded rural communities.

Download

Benefits and Risks of E-Banking: Case of Commercial Banking In Zimbabwe

This research paper sought to analyse the benefits and risks of electronic banking for commercial... more This research paper sought to analyse the benefits and risks of electronic banking for commercial banks in Zimbabwe. A cross sectional survey was used to address the objectives and hypothesis of the study. The results revealed that e-banking in Zimbabwe has five critical success factors which are the use of e-banking for cutting costs, to enhance customer loyalty, to offer convenience, to improve profitability and competitive marketing. The study showed that the major benefits of e-banking are improved convenience to customers, cost reduction and an improvement in customer loyalty. The perceived risks of e-banking were revealed to be low levels of computer literacy, low security levels, lack of access to the internet for the majority of the population and operational problems associated with computer systems for most banks. The findings of the study imply that banks should invest more in improving customer awareness of e-banking products and reduce perceive risks of e-banking. The government and monetary authorities must improve legislation and infrastructure to encourage faster adoption of e-banking technologies.

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