Economics and Economic History

The paper analyses the structure of returns comovements and the volatility spillovers among the African stock markets using daily data for the period 2000-2010. We particularly focus on two issues: whether the stock markets of countries with close trading and financial links are more sychronised, and whether the financial crises influences volatility spillovers. Econometric models used include the Factor Analysis (FA), the Vector Autoregressive (VAR) and the GARCH. Our findings suggest that linkages among the African stock markets only exist along regional blocs. South Africa is found to be both the most dominant and most endogenous stock market. Most of the markets exhibit evidence of asymmetry and persistence in volatility. The results also show that it is important to account for structural change in volatility during financial crises when modelling volatility. We outline the investment and policy implications of the findings.

This study shows that Europe continues to be Africa’s major trading partner given the historical relations and long standing trading arrangements between the two. However, evidence also shows that despite maintaining strong trade linkages with Europe, Africa’s trade with Asia has been growing at a much faster rate than Africa’s trade with Europe. Over the years, Africa’s share of manufactured imports (at all levels of manufacturing and technology intensity) from Asia has been on a continuous rise, while Europe’s share of Africa’s imports of this nature has been on a continuous decline. Both Europe and Asia provide Africa with a market for its exports, although Europe absorbs more than Asia. By providing Africa with market opportunities for exports with greater skill content, this has implications for learning effects and technological spillovers, and thus developmental potentials which would facilitate structural transformation of productive structures. Intra- Africa trade has been ...

This study reviewed standard international trade theories as they pertain to the impact of trade restrictions. Current empirical studies were reviewed to see whether evidence supports trade theory predictions. Conventional price impacts in standard models of international trade show that trade restrictions are detrimental for trade for both countries involved, and the empirical evidence from current studies confirmed this. The current tit-for-tat tariff escalation between China and the United States has led to, among other things, increased domestic prices to both American consumers and producers; lower export prices to some of the Chinese exporters and American firms based in China; reduced import and export trade between the two countries that would lead to costly adjustments in supply chains; loss in net welfare and employment; and loss in competitive advantage to firms in both countries that produce for export. Therefore, efforts should be made to de-escalate these trade tensions.

Both the static and dynamic effect of economic integration have implication for foreign direct investment flows into a regional group, as well as the relocation of investment by firms already domiciled in the regional group. Agglomeration economies and easier access to the economic diversity of the regional group are important driving factors for industrial location by foreign investors or industrial relocation by firms already in the regional group. The theoretical arguments based on the Traditional theory of industrial location, the Marshallian theory, the theory of New economic geography, Weber’s theory and Dunning’s ownership, location and internalisation (OLI) theory were used to illustrate the implications of the static and dynamic effect of economic integration on investment inflows.

The protection cultural heritage is a challenge for developing countries particularly where heritage sites are widely spread in rural areas and may not include impressive buildings and monuments. A potential solution to the problem, adopted by a growing number of developing countries, is to link smaller, local sites together into a heritage route, which is then marketed as a package. The tourism potential of such routes is often emphasised in local economic development (LED) strategies, which are often envisaged as paying for the heritage conservation. This paper explores the potential for economic development and heritage conservation of establishing the Liberation Heritage Route in South Africa. While the project has undoubted non-market value related to the protection of cultural capital, it is unlikely that financial and other LED benefits will be forthcoming in the short run, potentially jeopardising the sustainability of the heritage projection.

The hidden economy surrounding the medicinal plant trade in South Africa is estimated to be worth approximately $60 to $100 billion per annum. There is increasing focus on the role that these resources play in the process of sustainable development. By combining Local Economic Development (LED), incentive structures and resource management systems strategies in the Eastern Cape, biodiversity degradation can be potentially decreased in line with community development goals. Qualitative data comparisons are used to assess the extent of the success of this holistic approach to development using the Umthathi Africulture Project as a case study.

In the context of widening participation, large classes and increased diversity, assessment of student learning is becoming increasingly problematic in that providing formative feedback aimed at developing student writing proves to be particularly laborious. Although the potential value of peer assessment has been well documented in the literature, the associated administrative burden, also in relation to managing anonymity and intellectual ownership, makes this option less attractive, particularly in large classes. A potential solution involves the use of ICTs to automate the logistics associated with peer assessment in a time efficient way. However, uptake of such systems in the higher education community is limited, and research in this area is only beginning. This case study reports on the use of the Moodle Workshop module for formative peer assessment of students’ individual work in a first year introductory macroeconomics class of over 800 students. Data was collected through an end-of-course evaluation survey of students. The study found that using the feature-rich Workshop module not only addressed many of the practical challenges associated with paper-based peer assessments, but also provided a range of additional options for enhancing validity and reliability of peer assessments that would not be possible with paper-based systems.

Across the world, university teachers are increasingly being required to engage with diversity in the classes they teach. Using the data from a large Economics 1 class at a South African University, this attempts to understand the effects of diversity on chances of success and how assessment can impact on this By demonstrating how theory can be used to understand results, the paper aims to encourage university teachers to adopt proactive strategies in managing diversity, rather than simply explaining it using student characteristics.

Key words: Economics teaching; assessment; student diversity

Economic indicators, like GDP per capita, are commonly used as indicators of welfare. However, they have a very limited and narrow scope, excluding many potentially important welfare determinants. There is thus increasing use of subjective measure of wellbeing, which can be important in making policy decisions that optimise societal welfare. This paper tests for differences in subjective wellbeing between race groups in South Africa, and determinants of self-rated life satisfaction (happiness) for each group, using the 2008 National Income Dynamics Study (NIDS). Results indicate that reported happiness differs substantially among race groups, as do determinants of life satisfaction. Black South Africans are least happy despite changes since 1994. Higher levels of educational attainment increase satisfaction for the whole sample, and women are generally less happy than men. Unemployed people have lower levels of life satisfaction than the employed, even when controlling for income and relative income.

Research has shown that the racial diversity of college student populations improves social tolerance and academic performance.  However, it is also found that students of colour are more likely to drop out than their white counterparts, and to feel isolated and excluded from campus life. One possible reason for such feelings is the built heritage on campuses, particularly those with colonial-era style, which is often used in college marketing and recruiting. This research uses student survey data from St. Mary’s College of Maryland (SMCM), in the U.S. and Rhodes University (RU) in South Africa to investigate student attitudes towards, and knowledge about, campus built heritage. Regression results show that at the less racially diverse institution, SMCM, black and other ‘minority’ students with negative feelings toward their campus’ built heritage, are less likely to feel that built heritage promotes campus loyalty. However, at the much more racially diverse RU we found no such significant relationships regarding student loyalty to their institution.

A common economic prescription to reduce incentives to poach endangered wildlife is to drive down the market price of their products via auctioned stockpile releases. To secure a stockpile for some species needs biological success in captive breeding programs (CBPs) but this varies across species and habitats. Rhinoceros herds in a CBP would need relatively spatially extensive terrain and costly permanent security measures, and only appear feasible for the less aggressive "white" rhino. Thus, market price would actually need to be sustained at a high level to cover their costs that are argued to be unlikely to fall significantly. Supplementary policy measures that differentiate among consumer groups may also prove necessary.

This paper addresses the issue of conceptual ambiguity and how it relates to labour market data, with a particular focus on informality.  Although a ‘basic portrait’ of the South African labour market has emerged, empirical uncertainty remains a key source of obscurity in a range of economic debates.  In particular, debates about informality (which is often conflated with flexibility) and the appropriate degree and nature of regulation remain as polarized as they were in the early 1990s.  Answering specific questions about the ‘informal sector’ (appropriate policies to support SMEs, the question of microfinance, the issue of skills development) is hardly possible in this context.  The paper argues that resolving this impasse depends not on more data but on better conceptualization of the labour market.  This in turn depends on an understanding of context, that is, South Africa’s socio-economic and political structure and its global articulation.

The expansion of credit rating agencies into emerging markets is examined with respect to the overall quality of informational signals provided by ratings to capital markets. Corporate ratings from six developing economies with relatively sophisticated financial sectors are modeled using ordered probit estimation techniques. The paper finds that the informational content in emergingmarket corporate credit ratings is poor ipso facto and compared to similar models of developed market ratings, and suggests that the sample countries are subject to what is termed an 'emerging market premium'. The consequences of this hypothesis for applications in development finance and regulatory regimes are briefly considered. Procyclicality is not found to be a problem, but this is attributed to clustering rather than through-the-cycle design. It is concluded that corporate credit ratings currently do not actively enhance efficient financial intermediation in developing financial markets and are not a sufficient criterion for risk allocation in regulatory regimes.