Studies in Economics and Econometrics - latest Issue
Volume 40, Issue 3, 2016
Source: Studies in Economics and Econometrics 40, pp 1 –19 (2016)More Less
This study investigates the relationship between cost and revenue efficiency, and competition in the banking system in Zimbabwe. Competition was approximated using the Lerner Index, and efficiency, using the data envelopment analysis. The Granger causality method was applied to determine the causal relationship between efficiency and competition. The study established that the banks operated under monopolistic competition during the period 2009-2014. The data envelopment analysis found that banks in Zimbabwe operate outside their revenue and cost efficiency potential, experiencing inefficiency levels of around 30 per cent. The Granger causality test suggests that revenue and cost efficiency positively Granger causes market power. This means that an increase in cost and revenue efficiency leads to a decline in competition, which implies that bank regulators face a trade-off and should moderate their application of procompetitive policies. The results further suggest that competition positively impacts cost efficiency supporting the institution of procompetitive policies so as to stimulate cost efficiency.
Author J. KempSource: Studies in Economics and Econometrics 40, pp 21 –38 (2016)More Less
Estimates of potential output growth in SA have declined from over 3% prior to the Global Financial Crisis (GFC) to just over 2% currently. A similar slowdown has been experienced in several other countries, including most members of the G20. The purpose of this paper is to (i) estimate SA's level of potential output growth both before and after the GFC using a multivariate filter technique and (ii) attempt to explain the apparent decline in the growth potential by investigating the underlying drivers of potential GDP growth using a Cobb-Douglas-type production function. It is found that potential growth has declined to around 2.2% post-GFC. It is also determined that the biggest driver of the post-crisis decline in potential growth has been lower productivity growth.
Source: Studies in Economics and Econometrics 40, pp 39 –63 (2016)More Less
International studies of gender differences in health status largely attest that women have worse health conditions than men, which compromise women's contribution to economic development. Using the South African Demographic and Health Survey of 2003, we investigate whether this disparity also holds in developing countries such as South Africa. Our results concur with previous findings that South African women are more likely to suffer from poor health than men. They also reveal that the health gap is largely driven by a relatively higher prevalence of health conditions among women, rather than by the severity of the conditions that they face. Furthermore, contrary to the common view that the health gap closes with age, we find that the gap exhibits little variation across age groups and it persists in old age. This suggests a need for preventive measures to reduce the occurrence of health conditions in South Africa - which is vital for economic development.
Source: Studies in Economics and Econometrics 40, pp 65 –93 (2016)More Less
Studies on the finance-growth nexus span across generations. However, few researchers attempted studies on finance-growth in the Southern African Development Community (SADC) as a region. The existing studies do not consider the effect of financial reforms or the causality between finance and growth for SADC. The shift from wholesale to retail finance in support of small enterprises and increasing financial inclusion and financial innovation in the region justifies the need for a relook at the finance-growth nexus. This study seeks to establish the causal relationship between financial development and economic growth in the SADC region, factoring-in the role of financial reforms. Utilising Generalised Methods of Moments (GMM) Estimations and Panel OLS Estimation with Fixed and Random Effects, the study established that financial development has a negative effect on growth in SADC. Country heterogeneity, underdeveloped financial systems, non-performing loans, structure and distribution of credit in the SADC countries are influencing the relationship. A bi-directional causality between finance and growth was established, although demand-following causality proved to be stronger than the supply-leading causality. Addressing underlying structural issues in both the financial sector and overall macro economy of SADC countries may help in improving the relationship between finance and growth in the region.