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- South African Journal of Economic and Management Sciences
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- Volume 14, Issue 2, 2011
South African Journal of Economic and Management Sciences - Volume 14, Issue 2, 2011
Volumes & issues
Volume 14, Issue 2, 2011
Source: South African Journal of Economic and Management Sciences 14, pp 122 –137 (2011)More Less
The robustness of the Basel II accord in protecting banks during volatile economic periods has been challenged during the ongoing credit crisis. In particular, advanced approaches to measuring and managing credit risk have drawn criticism for being both irrelevant and too complex. Despite accusations that the accord was largely responsible for the crisis, this article explores which of Basel II's credit risk approaches were more successful in allocating capital. It was found that, in general, compliance with Basel II actually protected banks during the crisis, with simpler approaches enjoying greater success than more advanced ones in protecting banks against credit risk.
Source: South African Journal of Economic and Management Sciences 14, pp 138 –152 (2011)More Less
The Basel II accord sets out detailed formulations (in its Internal Ratings Based approaches) for determining credit risk capital in the banking book, but until recently, credit risk in the trading-book was largely ignored. The financial crisis in 2007 / 08 exposed this oversight: woefully inadequate trading book capital led to considerable losses which resulted in, inter alia, the imposition of severe capital requirements on credit risk-prone securities in the trading book. Using empirical loss data, this article investigates whether these requirements are appropriate for the trading book and proposes a possible alternative which banks may use to determine economic capital.
Factors threatening the survival of independent financial advisers in their organisational life cycle : an exploratory studySource: South African Journal of Economic and Management Sciences 14, pp 153 –169 (2011)More Less
This study investigates various threats to the survival of independent financial advisers in their organisational life cycle. Telephone interviews were conducted to gain more insight into the demographic data of the respondents and to attempt to group them into life-cycle stages. Personal interviews were conducted to investigate the respondents' problems. The contribution of this study is twofold. First, general life-cycle stages applicable to the businesses of independent financial advisers were determined. Secondly, the study identified the important problems as well as those that ought to be considered in the advisers' businesses. The findings could be of assistance to independent financial advisers in analysing both their current business position and their planning for future requirements as the business develops from one stage to the next.
SME manufacturers' cooperation and dependence on major dealers' expert power in distribution channelsSource: South African Journal of Economic and Management Sciences 14, pp 170 –187 (2011)More Less
The importance of major dealers' expertise in distribution channels and effects on exchange relations is widely acknowledged by many SMEs in Africa and yet there seem to be a paucity of research on this matter. To address this dearth, the current study attempts to examine the relationship between major dealers' expert power and SME manufacturers' channel cooperation and the mediating influence of their trust, relationship commitment and satisfaction. The conceptualized model and five hypotheses are empirically validated using a sample of 452 manufacturing SMEs in Zimbabwe. The findings indicate that major dealers' expert power may influence SME manufacturers' trust, relationship commitment, relationship satisfaction and channel cooperation in a significant way. Managerial implications of the research findings are provided.
Source: South African Journal of Economic and Management Sciences 14, pp 188 –209 (2011)More Less
The IFRS for SMEs was developed to address the reporting needs of SMEs worldwide. SMEs however do not necessarily have a global focus. Furthermore, SMEs from different parts of the world are exposed to different conditions and environments.
Although the IFRS for SMEs was not intended for a specific user group, the majority of the respondents to the Exposure Draft on IFRS for SMEs were from Europe and other developed countries while only limited respondents from Africa and developing countries were involved.
This study considered the relevance of the contents of the IFRS for SMEs in the South African environment based on user requirements. Since SMEs do not necessarily have functional accounting departments and because they rely on external accountants to compile financial statements, we included accounting practitioners and trainee accountants from the SME sector in our survey. As a result we classified the contents of the IFRS for SMEs, from a South African perspective, into different levels of importance or relevance.
Author Johan FourieSource: South African Journal of Economic and Management Sciences 14, pp 210 –228 (2011)More Less
World service exports have grown at a rapid rate over the past few decades. While some countries have benefited from the surge in service exports, others have been left behind. This paper provides a snapshot of South Africa's comparative performance in service exports, using a new measure of revealed comparative advantage, the normalised revealed comparative advantage (NRCA). Countries are ranked according to their performance in 10 service export sectors. South Africa is found to reveal a strong comparative advantage in travel service exports (tourism). A discussion of the travel services sector follows, with historical, theoretical and empirical evidence to support the NRCA findings.
Source: South African Journal of Economic and Management Sciences 14, pp 229 –244 (2011)More Less
This study investigates the trade effects of the EU-SA and SADC preferential trade agreements of which South Africa is a member. Using a panel data estimation of the gravity model of bilateral trade and based on data from 1994 to 2008, the study finds the EU-SA preferential trade agreement to have a significant trade expansion effect. The study further reveals that an informative conclusion on trade effects of the SADC preferential trade agreement can only be reached once the agreement has been fully operational. The study also recommends that trade policy in South Africa should increasingly be geared towards broad-based multilateral liberalisation. In addition, South Africa should promote regional economic stability and development through supporting regional trade agreement initiatives.