Indicators of Absorptive Capacity and Import‐induced South–North Convergence in Labour Intensities

We hypothesise that North–South trade is associated with knowledge spillovers that create labour productivity gains depending on various aspects of Southern absorptive capacity. We use the novel World Input–Output Database (WIOD) that provides bilateral and bisectoral panel data for 39 countries and 35 sectors for 1995–2009. We examine growth in relative South–North labour intensities (South–North convergence) for 31 industrialised source and eight emerging recipient countries. We find strong evidence that various components and individual indicators of absorptive capacity interact with imports of investment goods in such a way that the relative labour intensity is reduced. GMM and GLS estimations corroborate the results. Policies that improve various of the identified aspects of absorptive capacity are more promising than policies that select only one. Elevating the absorptive capacity of emerging economies to the maximum level in the world would halve the South–North gap in labour intensities within a couple of decades if it were solely achieved through the trade channel.     

The World Is Watching: Polaroid and South Africa

This article examines the Polaroid Corporation’s "experiment"in South Africa during the 1970s, which began after AfricanAmerican workers pressured the company to pull its operationsout of South Africa in protest of the white minority government’sapartheid policies. It argues that Polaroid’s initiatives,little studied until now, led other American companies to questiontheir presence in South Africa and inspired both student divestmentmovements at Harvard and other colleges and universities andthe efforts of Leon Sullivan, whose 1977 "Sullivan Principles"urged American companies to treat their workers in South Africaas they would treat their counterparts in the United Statesin an effort to battle racism and apartheid. Despite Polaroid’sefforts, engagement with South Africa and apartheid proved futile,which initiated a larger movement to completely disengage fromSouth Africa.     

Monetary policy and wage inequality in South Africa

The distributive consequences of monetary policy have been researched only recently and almost entirely in advanced economies. This paper sheds light on the effect of conventional monetary policy shocks on the wage distribution in South Africa, where inequality – mostly driven by the segmented labour market – remains a large issue. Impulse response functions estimated from local projections show that the wage distribution significantly worsens in response to monetary shocks. Wages in the top half of the distribution, that benefit from unanticipated expansions, are less responsive to surprise contractions, remaining protected by skill-biased technology and strong labour unions.     

Labour Relations and Ethical Dilemmas of Extractive MNEs in Nigeria,South Africa and Zambia: 1950–2000

This article examines the ethical characteristics of MNEs employee relations in developing countries. Specifically, it addresses various ethical issues relating to labour relations and trade unions in extractive industries in Nigeria, South Africa and Zambia. Data collected in these countries indicate that criticisms against MNEs relating to labour issues and labour practices in developing countries are not lessening. The discussion is lent focus and direction through the analysis of critical incidents from the perspectives of various stakeholders: government, oil and mining companies, and leaders of trade unions. Tensions over pay, expatriate employments as against the locals, negotiation rights and employees well-being are evident. The argument advanced is that the MNEs operating in the extractive industries of Africa will have to improve their relations with local employees in order to bridge the legitimacy gaps that exist. An improved mutual understanding between the MNEs and trade unions is required for both actors to have a smooth working relationship.     

The role of education and training in enhancing labour productivity in Arab countries in Africa

Labour productivity in Arab countries is low by international standards and this problem occurs in Arab countries both inside and outside Africa. There are 10 Arab countries in Africa: Egypt, Libya, Tunisia, Algeria, Morocco, Mauritania, Sudan, Somalia, Djibouti and Comoros. Enhancing labour productivity is a major challenge for Arab countries. Improving labour productivity should increase competitiveness, economic growth, job availability and living standards. Key factors in low Arab labour productivity include weak education and training systems, a mismatch between training outputs and labour market demands, lack of technology and innovation and poor management of the workforce. This article seeks to put forward innovative education and training policies which can enhance labour productivity. It does so after examining Arab education and training systems and their links with industry. It is concluded that modern governance arrangements need to be applied in Arab universities. Universities need to be re‐envisioned so that curricula are market‐driven and bridge the gap between education supply and market demand. Entrepreneurial teaching and learning practices need to be emphasized and improved technical and vocational training should be a priority. The Arab countries also have to adopt responsive and practical strategies for research and development and link the research and development institutes to industry.     

Foreign direct investment,black economic empowerment and labour productivity in South Africa

The impact of foreign direct investment (FDI) on domestically owned firms in developing countries has been widely debated in the literature. It has been argued that FDI provides access to advanced technologies and other intangible assets, which may spill over to the host country and allow domestic firms to improve their performance. While there is a substantial literature on this issue, for obvious reasons, little is known about the effect of FDI on domestic firms in the African context. Noting this gap, this paper uses two-period (2003 and 2007) firm level panel data from South Africa to examine the impact of FDI on the labour productivity of domestic firms. A key policy change during this time period was the passage of the broad-based black economic empowerment act (BB-BEE) and we also examine the effect of the interaction between foreign firm ownership and BEE on labour productivity. Regardless of the empirical specification, we find no spillover effects and no evidence that a greater degree of BEE compliance by foreign firms influences labour productivity.     

Stock market development and economic growth: Evidence from seven sub-Sahara African countries

The paper examines the long run and causal relationship between stock market development and economic growth for seven countries in sub-Saharan Africa. Using the autoregressive distributed lag (ARDL) bounds test, the study finds that the stock market development is cointegrated with economic growth in Egypt and South Africa. Moreover, this test suggests that stock market development has a significant positive long run impact on economic growth. Granger causality test based on vector error correction model (VECM) further shows that stock market development Granger causes economic growth in Egypt and South Africa. However, Granger causality in the context of VAR shows evidence of bidirectional relationship between stock market development and economic growth for Cote D’Ivoire, Kenya, Morocco and Zimbabwe. In Nigeria, there is a weak evidence of growth-led finance using market size as indicator of stock market development. Based on these results, the paper argues that stock markets could help promote growth in Africa. However, to achieve this goal, African stock markets need to be further developed through appropriate regulatory and macroeconomic policies.     

Labour Migration and Economic Growth in East and South‐East Asia

East and South‐East Asia will face major demographic changes over the next few decades with many countries’ labour forces starting to decline, while others experience higher labour force growth as populations and/or participation rates increase. A well‐managed labour migration strategy presents itself as a mechanism for ameliorating the impending labour shortages in some East Asia–Pacific countries, while providing an opportunity for other countries with excess labour to provide migrant workers who will contribute to the development of the home country through greater remittance flows. This paper examines such migration policy options using a global dynamic economic simulation approach and finds that allowing migrants to respond to the major demographic changes occurring in Asia over the next 50 years would be beneficial to most economies in the region in terms of real incomes and real GDP over the 2007–50 period. Such a policy could deeply affect the net migration position of a country. Countries that were net recipients under current migration policies might become net senders under the more liberal policy regime.     

Policy issues in West African integration

As a result of the slight success achieved by many developing countries in their attempts to become integrated in the international division of labour and the growing fear of unilateral dependence upon the industrial nations, increased attention has been given in recent years to economic and technical cooperation between developing countries. Peter Robson examines the potential and limitations of regional integration between developing countries in the light of the experience of West Africa. This is followed by an article by Norbert Wagner who discusses the regional integration issue using South and South-East Asia as examples.     

Golden South Africa,Great Development

On the occasion of the 10th panniversary of diplomatic relations between China and South Africa in 2008, China is celebrating ＂South Africa Week＂ to commemorate. H.E. Dr. Nkosazana Dlamini Zuma, the minister of South Africa,     

Corporate Governance in South Africa

The King Report on Corporate Governance (1994) evoked unprecedented interest in corporate governance in South Africa. This does not mean that corporate governance was not an issue of concern before the release of this historical report. To the contrary, corporate governance in its broader sense has been at stake since the inception of the first publicly owned companies in South Africa. This article intends to give an overview of corporate governance in South Africa. It starts by making a distinction between broad and narrow conceptions of corporate governance. Before applying this distinction to the practice of corporate governance in South Africa, a brief overview of the corporate landscape in South Africa is provided. Then the South African situation with regard to broad and narrow corporate governance respectively is analysed. The article ends with a discussion of the review of corporate governance that currently is in the making in South Africa. Throughout the article both the financial and ethical dimensions of corporate governance is attended to.     

Lessons Learnt from the Nordics: How to Fight Long-term Unemployment

This study examines policies that can successfully address long-term unemployment. It focuses on Denmark and Sweden, where, despite sizeable job losses during the crisis, labour market indicators are at present better than in any other EU country. By looking at the interaction between labour market flexibility (especially in hiring and firing regulations) and passive and active policies, we argue that well-designed active policies matter more than labour market flexibility for employment.     

Unethical behaviour in procurement: A perspective on causes and solutions

Enterprise management often encourages their marketing personnel to offer gifts to purchasers of clients but won't allow the purchasers of the company to accept gifts. This double standards create an atmosphere of dishonesty in the company.When considering that purchasers fulfilling the procurement function for a company are the major spenders of company funds, and that purchasers are frequently tempted to accept gifts and prevailing double standards within the company, it is no wonder that they sometimes succumb to unethical behaviour. The purchasing environment thus creates an atmosphere conductive to unethical behaviour.However, the cause of unethical behaviour is not necessarily the individual's lack of moral standards. Research has shown that the actions of managers, the ethical climate in the enterprise and the absence of a company policy on the matter are all contributing factors towards unethical behaviour. Unethical behaviour of purchasers and other personnel involved in procurement can therefore be prevented or limited by implementing certain measures.This article focuses on ethics, procurement or purchasing ethics, and unethical behaviour among purchasers in general, as well as more specifically on the situation in South Africa, and makes recommendations for establishing codes of conduct, other procedures and policies for improving the situation of the purchaser in the enterprise.Dr Badenhorst is presently associate-professor, in Purchasing and Materials Management at the University of South Africa. She made contributions to a wide range of journals regarding marketing, management, development and public administration. She also presented scientific papers at various international and national conferences. She was also instrumental in starting (and manages) the first (and only) Certificate in Purchasing Management course in South Africa.     

Labour market characteristics and surviving import shocks

This paper investigates whether different labour market characteristics amplify or dampen the local labour market impacts from Chinese import competition exposure. I exploit state‐level variation in initial, pre‐shock labour market characteristics and regional variation across local labour markets in exposure to Chinese imports for identification. I find that local labour markets in states with higher union density experience more severe adverse consequences as a result of increased import exposure. Conversely, higher initial minimum wages help mute the negative impacts of the China shock. I also provide some evidence that exceptions to employment‐at‐will legislation can affect employment responses to increased Chinese imports. Finally, examining all policies together in an index, I show that higher levels of policies intended to benefit and protect workers can actually magnify the extent of the damage inflicted by import competition. My results suggest that initial labour market characteristics and policies can play an important role in understanding why local labour markets react differently to trade shocks.     

Regulation,deregulation, and internationalisation in South African and New Zealand banking

The banking industries of New Zealand and South Africa were among the most tightly regulated in the western world in the early 1980s. Restrictions on foreign banks were particularly acute, especially in South Africa. From a position of considerable isolation, first New Zealand then South Africa implemented programmes of financial liberalisation. We show that the outcome of liberalisation was different in these two countries. South African banks were able to establish a strong presence in external markets, but the New Zealand banking system was mopped up by its Australian neighbour. These divergent outcomes reflect the origins, geographical position, and unequal capabilities of the New Zealand and South African banking industries.     

GROWTH POLICY IN THE SPIRIT OF STEINDL AND KALECKI

There are large differences between Steindl’s ideas on growth policies and the Brussels/Paris consensus. Steindl called for innovation and education policies, whereas the mainstream today rather favours deregulation and privatization. Steindl stressed the positive demand‐side effects of the public sector and the contribution of lower household savings and anticyclical policies to growth. The economic mainstream praises the efficiency effects of a declining public sector, the importance of high savings for investment and warns of active anticyclical policies being an impediment to budget consolidation. Steindl and the Keynesians regarded the labour market situation as a consequence of economic growth. Today many economists see low growth as a result of labour market rigidities.     

Audit quality in common-law and code-law emerging markets: Evidence on earnings conservatism, agency costs and cost of equity

This study focuses on firms that are audited by a big auditor and examines the differentiation in the earnings management potential and the level of conservatism. It also investigates whether being audited by a big auditor would lead to lower agency costs and lower cost of equity. The study focuses on emerging common-law South Africa and code-law Brazil, and seeks to identify whether there are material differences given their dissimilar institutional characteristics. The study reports that even though firms may be audited by high quality auditors, their institutional differences influence significantly firms' earnings conservatism, agency costs and cost of equity. Client firms of big auditors in both common-law South Africa and code-law Brazil exhibit lower discretionary accruals. The study has found evidence of more conservative earnings for South Africa but insufficient levels for Brazil. For common-law South Africa, the presence of effective corporate governance mechanisms reduces agency costs. For code-law Brazil, the corporate governance mechanisms generally display an insignificant impact on reducing agency costs. For common-law South Africa, firm-level performance, growth and market determinants tend to lead to a lower cost of equity. For code-law Brazil, it is found that significant discretionary accruals, market beta and analyst forecast dispersion would result in higher uncertainty and would consequently raise the cost of equity.     

The contextualization of a microfinance model: From India to South Africa

Microfinance has come to be seen as the “magic bullet” to alleviate poverty across the world. Focus has been on scaling up “successful” models within, and beyond, singular cultural settings. We explore why different stakeholder groups perceived the same microfinance model as successful in India, yet less successful in South Africa. The study is an explorative case study, combining the literature on social capital and contextualization, and suggests that historical, socioeconomic, and legislative antecedents to social capital in India are different in South Africa, thus resulting in a lower perception of microfinance success in South Africa. © 2012 Wiley Periodicals, Inc.     

Theorising South Africa’s Corporate Governance

South Africa’s principal corporate governance report aspires to an ‘inclusive’ approach to corporate governance, in which companies are clearly advised to consider the interests of a variety of stakeholders. Yet, in common with many other countries, there is little discussion of the theoretical foundations and assumptions implicit in the recommended approach to corporate governance. The purpose of this article is to provide an analysis of corporate governance and the corporate environment in South Africa in terms of existing theory and models of corporate governance, and to provide a critique based on a consideration of traditional African values and the socio-economic necessities of post-apartheid South Africa. The result is the identification of an incompatibility between the current corporate environment in South Africa and the given exposition of African values. Some prospects for change are then identified.