South African Journal of Economic and Management Sciences - latest Issue
Volumes & issues
Volume 19, Issue 4, 2016
Source: South African Journal of Economic and Management Sciences 19 (2016) http://dx.doi.org/http://dx.doi.org/10.17159/2222-3436/2016/v19n4a4More Less
Firms face increasing societal pressures to act responsibly towards stakeholders, and community engagement is a key element of this response. While Bowen, Newenham-Kahindi and Herremans (2010) have found that community engagement strategies fall into the transactional, transitional and transformational categories, more research is needed. Nineteen semi-structured interviews were conducted with CSR practitioners, community beneficiaries and external experts across three companies from different sectors and geographically-associated South African communities.
Barriers to and enablers of transformational community engagement are identified and compared with points made in the literature. Prominent barriers identified include community expectation; the internal capacity of the company to engage properly with communities; and, according to a new finding in the literature, community educational levels. The most prominent enabler of engagement was relationship-building. Companies with dedicated CSR practitioners are able to engage more in the community. Regulatory dynamics are found to largely determine the differences across sectors. But there is the risk that engagement is symbolic rather than substantive. Eleven higher-order antecedents to transformational community engagement are then identified. A newly developed firm-oriented decision-making model is proposed for moderating these antecedents. The findings in the community and national context provide granular insight into an African operating environment.
Source: South African Journal of Economic and Management Sciences 19, pp 467 –478 (2016) http://dx.doi.org/http://dx.doi.org/10.17159/2222-3436/2016/v19n4a1More Less
This study assesses the behaviour of credit extension over the business cycle in South Africa for the period 2000 to 2012 and is motivated by the proposal of the Basel Committee on Banking Supervision (BCBS) to use credit extension over the business cycle as a reference guide for implementing countercyclical capital buffers. Using a logistic smooth transition autoregressive model, we find that credit extension in South Africa increases during the trough phase of the business cycle, while this relationship becomes insignificant during the peak phase. The study also finds that credit extension decreases during the expansion phase of the business cycle, while it increases during the contraction phase. Thus, unlike previous studies for South Africa, we do not find any evidence that credit extension is procyclical and that the common reference guide for implementing countercyclical capital buffers should therefore be used with caution. The reason is that the BCBS's proposed measure of credit extension would suggest implementation of capital buffers during contractionary economic conditions and their withdrawal during expansionary economic conditions, which could have adverse consequences for macroeconomic stability.
Author Marius PretoriusSource: South African Journal of Economic and Management Sciences 19, pp 479 –496 (2016) http://dx.doi.org/http://dx.doi.org/10.17159/2222-3436/2016/v19n4a2More Less
Tension often arises when Chapter 6 business rescue practitioners (BRPs) are appointed by directors to rescue their distressed businesses. Regulating by means of standard agency contracting becomes irrelevant in the resulting multiple relationships. Looking through the agency lens, using analytic autoethnography and compiling narratives, this paper explains the perceptions of what appear to be quasiagency relationships and obtains a better understanding of these. The findings suggest that the apparent principal-agent relationships suffer from asymmetries of goals, information access, informal power and diverging perceptions of moral hazard, transaction costs and adverse selection. As a solution, contracting has been shown to have limited value owing to outcome uncertainty and measurability. This is because the tasks of the BRP are non-programmable and term-dependent. The findings provide filing directors, shareholders, creditors, regulatory authorities and BRPs in this newly instituted regime, with enhanced understanding of how the relationships manifest in practice and overcome the non-contractibility of the newly formed relationships.
Source: South African Journal of Economic and Management Sciences 19, pp 497 –513 (2016) http://dx.doi.org/http://dx.doi.org/10.17159/2222-3436/2016/v19n4a3More Less
On the basis of agency theory and resource dependence theory, as well as other corporate governance literature, it is predicted that board composition measured as the ratio of non-executive to executive board members and the number of directors on a firm's board can be positively related to firm performance. This study seeks to test the predictions of this body of theory and to investigate the form of the empirical relationships among these effects. In so doing, this study tests theory that relates these variables in the context of a developing country, using data from South Africa's Johannesburg Stock Exchange, over a seven-year period, 2006-2012.
The effect of institutional trust on internet banking acceptance : perspectives of South African banking retail customersAuthor Daniel K. MadukuSource: South African Journal of Economic and Management Sciences 19, pp 533 –548 (2016) http://dx.doi.org/http://dx.doi.org/10.17159/2222-3436/2016/v19n4a5More Less
Transactions carried out in the uncertain and impersonal conditions of the Internet require substantial levels of trust. Obtaining customers' trust is therefore imperative to cultivating and nurturing long-lasting and profitable customer-firm relationships in online environments. Surprisingly however, there is currently a dearth of research on the effects of trust on customers' acceptance of e-commerce in Africa. This paper investigates the effects of the components of institutional trust on perceptions of ease of use and usefulness, as well as attitudes towards use on customers' intentions to use Internet banking services. An integrated research model based on the Technology acceptance Model (TAM) was built and empirically tested using data obtained from 390 retail banking customers in South Africa. The results show that the proposed model possesses high explanatory capabilities as it could explain 61 per cent of the variance in Internet banking use intentions. The study results further show that situational normality is neither a salient determinant of customers' attitudes towards use of internet banking nor their use intention, whereas structural assurance is. By examining the effects of institutional trust on the TAM's variables, especially in a developing African country, this study does not only provide insights for managers in their efforts to achieve rapid adoption of Internet banking, but also contributes to the literature on the topic.
Source: South African Journal of Economic and Management Sciences 19, pp 549 –561 (2016) http://dx.doi.org/http://dx.doi.org/10.17159/2222-3436/2016/v19n4a6More Less
In recent times, global agricultural productivity has been increasingly affected by climate change. It is believed that societal adoption of insurance as an adaptive response to climate change can have significant implications for insurers. The study investigates empirically insurers' perceptions of climate change and the challenges they face in Nigeria. It examines the proposition that insurance firms in Nigeria are not mindful of the impact of climate change. The study applied the use of descriptive statistics, Kendall's coefficient of concordance and principal component analysis on collected primary data. It was found that insurers in Nigeria were highly aware of climate change and its impact but did not believe it affects their operational costs and payments of claims. Although there is great scope for insurers to increase their client base in the Nigerian market, insurers face challenges of insurance rate-cutting, low patronage and environmental factors. The study concludes that there is a need for insurance regulators to enforce a level playing field for all firms. It also advocates for public support of private insurers to enhance insurance coverage for agriculture, the largest employer of labour in the country.
Source: South African Journal of Economic and Management Sciences 19, pp 562 –578 (2016) http://dx.doi.org/http://dx.doi.org/10.17159/2222-3436/2016/v19n4a7More Less
This study explores the causes of corruption in 22 countries in sub-Saharan Africa from 1996 to 2013. The sources of corruption are grouped into three main thematic areas - historical roots, contemporary causes and institutional causes to make way for subjective and objective measures. The subjective measures allow for assessment of the effectiveness of anticorruption policies. Using pooled OLS, fixed-effect and instrumental-variable approaches, and focusing on the perceived level of corruption as the dependent variable, we find that ethnic diversity, resource abundance and educational attainment are markedly less associated with corruption. In contrast, wage levels of bureaucrats and anticorruption measures based on government effectiveness and regulatory quality breed substantial corruption. Press freedom is found to be variedly associated with corruption. On the basis of these findings, we recommend that the fight against corruption on the continent needs to be reinvented through qualitative and assertive institutional reforms. Anticorruption policy decisions should focus on existing educational systems as a conduit for intensifying awareness of the devastating effect of corruption on sustainable national development.
Source: South African Journal of Economic and Management Sciences 19, pp 579 –591 (2016) http://dx.doi.org/http://dx.doi.org/10.17159/2222-3436/2016/v19n4a8More Less
Most listed South African companies appear to have embarked on environmental reporting without enquiring what the users' needs are. If users' needs are not determined prior to reporting, it is unlikely that the resulting reports will meet those needs. Using a questionnaire, this study investigated the environmental information needs of South African users of environmental reports. The study was deemed necessary to unveil users' preferences which, if incorporated in reports, could enhance their perceived decision-usefulness, thus increasing readership. The results of the survey revealed that users need balanced environmental information that identifies and describes key, relevant issues and that is both specific and accurate. In addition, users need future-oriented information that identifies and addresses key stakeholders' concerns, and which demonstrates the integration of environmental issues into core business processes.Furthermore the information should be summarised in an integrated annual report and posted on a company's website. Based on its findings, this study recommends that standard setters and regulators should recognise that both financial and non-financial users need decision-useful environmental reports. Disclosure standards and regulations should therefore be amended to accommodate this reality.
An initial review of biodiversity reporting by South African corporates : the case of the food and mining sectorsAuthor Hafsa MansoorSource: South African Journal of Economic and Management Sciences 19, pp 592 –614 (2016) http://dx.doi.org/http://dx.doi.org/10.17159/2222-3436/2016/v19n4a9More Less
The purpose of this study is to examine to what extent South African companies listed on the local stock exchange in the mining and food producer and retail sectors are including biodiversity-related issues in their integrated and sustainability reports. The study employs established biodiversity reporting frameworks for gauging changes in the frequency of disclosures from 2011 to 2013 and determining if biodiversity information is being included in either the integrated or sustainability reports of the companies under review.
Consistent with the findings of a special edition of Accounting, Auditing and Accountability Journal (AAAJ), the research finds few examples of detailed reporting on biodiversity issues. This is despite the fact that South Africa has a well-established code of corporate governance, a long history of including non-financial information in corporate reports and is an advocate of the integrated reporting movement. The study calls into question the sincerity of companies in the two sectors under review when it comes to providing balanced accounts of their management of non-financial capital as recommended by the country's codes on governance and the International Integrated Reporting Council.
A nutritional goods and a complete consumer demand system estimation for South Africa using actual price dataAuthor Marius Louis Van OordtSource: South African Journal of Economic and Management Sciences 19, pp 615 –629 (2016) http://dx.doi.org/http://dx.doi.org/10.17159/2222-3436/2016/v19n4a10More Less
Empirical analysis of South African indirect tax policy reform and the welfare consequences of such reform has been limited by a lack of reliable consumer demand system estimations. One reason for potentially unreliable demand estimations is not using actual price data in estimation. In this paper, the results of a nutritional goods demand system estimation and a complete demand system estimation are reported. Both systems were estimated with the use of the quadratic almost ideal demand system (QUAIDS) model incorporating demographic variables and using actual price and expenditure data. Subsequent to estimations, expenditure, own and cross-price elasticities of demand were calculated for both demand systems. The coefficients estimated provided largely statistical significant results and all elasticities calculated seem plausible in sign and magnitude.
Source: South African Journal of Economic and Management Sciences 19, pp 630 –646 (2016) http://dx.doi.org/http://dx.doi.org/10.17159/2222-3436/2016/v19n4a11More Less
The South African economy has for some time been characterised by high unemployment, income inequality and a skills mismatch, all of which have contributed to conflict between business, government and labour. The co-operative model of stakeholder management is examined as a possible mitigating organisational form in this high-conflict environment. International experience indicates some success with co-operative models but they are not easy to implement effectively and face severe obstacles. Trust and knowledge sharing are critical for enabling a co-operative model of stakeholder management, which requires strong governance and adherence to strict rules. The model must balance the tension between optimisation of governance structures and responsiveness to members' needs. Furthermore, support from social and political institutions is necessary. We find barriers to scalability which manifest in the lack of depth of business skills, negative perception of the co-operative model by external stakeholders, government ambivalence, and a lack of willingness on the part of workers to co-operate for mutual benefit.
Author Antoni BarnardSource: South African Journal of Economic and Management Sciences 19, pp 647 –660 (2016) http://dx.doi.org/http://dx.doi.org/10.17159file:///2222-3436/2016/v19n4a12More Less
With the ongoing financial challenges being faced in the economic environment, research exploring financial and psychological well-being is of significant value because employees' socio-economic behaviour affects productivity. Research emphasises mainly the effect of income level on psychological well-being, and its orientation to psychological well-being is narrowly derived from a focus on subjective well-being constructs. This study addresses the research gap by exploring the relationship dynamics between sense of coherence, income level and financial well-being. Secondary data were obtained from a cross-sectional online employee-wellness survey (n=7 185). The sample distribution included 66 per cent females and 34 per cent males from various age groups, with 46 per cent of the sample comprising single-household earners and 54 per cent sharing household income. Analysis of variance was conducted to examine the relationship dynamics between sense of coherence, level of income and financial well-being. Demographic variables that formed part of the survey results were included in the analysis. The relationships between sense of coherence and identified significant income level, financial well-being and demographic effects were further explored in Bonferroni multiple comparisons of means test and cross reference frequency tables that included Pearson's chi-square and/or Cochran-Armitage trend tests. Detail results indicate that high-income employees exhibit a significantly stronger sense of coherence than low-income employees, and that, despite level of income, financial wellbeing is nevertheless positively related to sense of coherence. Results indicate important implications for managing a financially healthy workforce. Limitations are discussed and recommendations for future research are highlighted.
Analysis of the South African input-output table to determine sector specific economic impacts : a study on real estateSource: South African Journal of Economic and Management Sciences 19, pp 661 –689 (2016) http://dx.doi.org/http://dx.doi.org/10.17159/2222-3436/2016/v19n4a13More Less
Input-output analysis is a well known method of analysing specific economic activity and the influence of different sectors on the economy and on one another. This study investigates the ability of input-output analysis to consider the importance of commercial real estate on the economy. It analyses the economic activity, contribution to GDP, employment created and taxes generated with reference to direct, indirect and induced impacts. The research shows the contribution of the specific sector on the economy and highlights the ability of input-output analysis to determine the impact of different types of property and locational analysis. The interaction of property with the economy is discussed, which also enables the use of the analysis reported here for short term future forecasting, whereby expected real estate activity is used to forecast the direct, indirect and induced effects on the economy.