The synergistic effect of insurance and banking sector activities on economic growth in Africa

It is widely understood that the insurance and banking sectors of every economy perform some functions in driving economic growth. What is not yet well documented is whether their roles are complimentary or substitutive. With the aid of the dynamic panel generalized method of moments (GMM) estimation technique, this paper evaluates the synergistic effect of both sectors on economic growth in a panel of 10 African countries that are responsible for most of the activities in the continent’s financial sector. The insurance-banking-growth nexus was also examined through bootstrap panel causality tests. The results show that the life insurance market and the banking sector, as well as the non-life insurance market and the banking sector, are complimentary. We find that, overall, the relationship between the insurance and banking sectors in Africa is a complimentary one and that their synergistic impact on economic growth is positive. The feedback hypothesis was also confirmed in the relationship between the insurance sector and economic growth and between the banking sector and economic growth.     

Political Pressure: An Examination of U.S. Senators’ Actions in Restricting Canadian Softwood Lumber Imports

Over the past 30 years the U.S.–Canadian softwood lumber trade dispute has resulted in three managed trade agreements that have not been voted on in the U.S. Congress. Nevertheless, U.S. Senators have played an important role in shaping the political environment that has nurtured these agreements. In this paper we construct a lumber influence index based on 14 known events between 2001 and 2006 and analyze what factors influenced a senator's decision to publically call for restricting Canadian lumber imports and to adopt the 2006 Softwood Lumber Agreement. Our results show that the size of the wood products manufacturing industry in a state, campaign contributions, logrolling, and ideology played a significant role and that interest group politics is prevalent in this dispute. Au cours des 30  dernières années, le différend commercial entre le Canada et les États‐Unis au sujet du bois d’?uvre résineux s’est soldé par trois  accords de commerce administré qui n’ont pas été mis au vote du Congrès des États‐Unis. Néanmoins, les sénateurs américains ont joué un rôle important dans le façonnement du climat politique dans lequel ces accords ont été préparés. Dans le présent article, nous avons mis au point un indice de l’influence fondé sur 14 événements connus qui se sont déroulés entre 2001 et 2006, et nous avons analysé les facteurs qui ont influencé un sénateur à préconiser publiquement des restrictions sur les importations de bois d’?uvre canadien et à adopter l’Accord sur le bois d’?uvre résineux en 2006. Les résultats de notre étude montrent que la taille de l’industrie de la fabrication des produits en bois dans un État, les contributions aux campagnes, les alliances politiques dans un but intéressé et l’idéologie ont joué un rôle considérable et que l’influence des groupes d’intérêt a été un facteur apparent dans ce différend.     

Impact of the Emerging Financial Holding Company Model on Small Business Borrowers' Financial Welfare: Contemporary Evidence from Nigeria Based on the Monti‐Klein Approach

This study exploits the adequacy of the Monti‐Klein model to analyse the banking firms' lending behaviour and uses the geometric lag analytic model to detect the lifespan of bank conglomeration impacts on small business financial welfare. We find that, although the impact of emerging conglomerate banks on lending to small businesses is significantly negative (δ = ?0.6897; p < 0.01), the effect reverses to a pre‐conglomerate positive status within one year. Hence, bank conglomeration does not negatively affect the financial welfare of small business borrowers in the long run. Contrary to the widespread belief and fear, the negative effects are not permanent. Large banks are feared to have no time for mid‐sized businesses. We find, however, that mere increases in size, as may be caused by economic or internal growth, do not pose a threat to small businesses. Large‐sized banking firms positively and significantly correlate with small and predictable risks (δ = 1.7935; p < 0.01). Hence, contrary to what regulators fear, there is no real issue surrounding the idea that building diversifying banks will influence small business loans negatively. What matters is the means through which large banks emerge. Therefore, regulators ought to exercise caution so that they do not discourage their emergence.     

Attitudes towards corporate social responsibility and perceived importance of social responsibility information characteristics in a decision context

This study addressed the questions of perceived importance of social responsibility information (SRI) characteristics in a decision context, as well as the attitudes of institutional investors toward social responsibility involvement. The results showed that SRI presently disclosed in company annual reports did not have any significant impact on institutional investors' decisions. However, if SRI were presented in quantified, financial form, and were focused on product improvement and fair business practices, such information would be perceived as more important for investment decisions. Attitudes toward corporate social responsibility also suggested that institutional investors were not totally opposed to company involvement in social activities. Hai Yap Teoh is associate professor in the Department of Accountancy, The University of Wollongong, New South Wales, Australia. He has published extensively in local and international journals including Accounting, Organizations and Society and The International Journal of Accounting Education and Research. His major areas of research interest include corporate social responsibility and reporting.Godwin Shiu is teaching fellow in the Department of Accountancy, The University of Wollongong, New South Wales, Australia. He is also doing a master's degree in accountancy.     

The Effects of Uncertainty on Market Prices: Evidence from Coaching Changes in the NBA

Abstract:  This study examines the effects of uncertainty on market prices. Specifically, we use the National Basketball Association betting market to examine whether uncertainty resulting from midseason coaching changes affects the ability of bettors to accurately set betting lines. We find that uncertainty amid midseason coaching changes results in less accurate pricing, as evidenced by higher volatility and greater overall inaccuracy in betting lines. We also find that uncertainty regarding the ability of the replacement coach and/or his strategies results in less accurate pricing, again evidenced by higher volatility and greater overall inaccuracy in betting lines.     

Rural telephone in Indonesia and Thailand: Social and economic benefits

This article considers the need for telecommunications in the rural areas of Indonesia and Thailand. Using the findings from questionnaire surveys in the two countries, the authors examine how the telephone is used when limited facilities are available, the effects of telephone service in terms of improved communication and work efficiency, and the consequences of not having access to a telephone     

Exchange Rate Volatility and Economic Activities of Africa's Sub-Groups

Exchange rates have been highly volatile in Africa, especially since the move to a floating exchange rate system beginning in the 1980s. Generally, the pattern of exchange rate changes differs between Africa's two main sub-groups (CFA and non-CFA groups) due to the different monetary/exchange rate systems they adopted. This article therefore examines the effect of exchange rate volatility on the economic activities in Africa and its sub-groups during the period 1986–2011 using a panel data approach.

Rational expectation theory informs the division of exchange rate into anticipated and unanticipated. Both the demand and supply channels are explored to trace the impact of the exchange rate volatility on price as well as aggregate demand and its components. Empirical results reveal differences in the impact of exchange rate volatility on economic activities between Africa's two sub-groups. Exchange rate volatility produced more significant effects in the non-CFA group than in the CFA group.     

Does the common law power to grant cross‐border insolvency assistance apply to an insolvency winding‐up that is voluntary? The reaction to Singularis from Singapore and Hong Kong

In many common law jurisdictions, the common law power of courts to grant assistance in respect of foreign insolvency proceedings exists independently of statute. The nature of the power, however, continues to generate debate. Obiter dicta of the Privy Council suggests that no assistance is available where the foreign proceeding is a voluntary winding‐up. This article evaluates the position by reference to Singapore and Hong Kong decisions and concludes that a refusal to grant assistance in circumstances involving an insolvent voluntary winding‐up is inconsistent with the principle of modified universalism and that a broader recognition test should be adopted.     

Foreign Currency Translation Under Two Cases-Integrated and Isolated Economies

Beaver and Wolfson (1982 BW) identify economic interpretability and symmetry as desirable properties for financial statement translation. They then analyze translation methods with respect to these properties assuming perfect and complete markets between and within both countries (referred to, here, as the integrated economies case).
This study extends BW's analysis by examining isolated economies characterized by perfect and complete internal markets and a random relationship between prices and exchange rates. In BW's integrated economies case, inflation differentials drive exchange rate changes. No exchange risk exists, although monetary assets are exposed to the risk of unexpected inflation. Isolated economies expose monetary and nonmonetary items to both exchange and inflation risk.
In both cases, economic interpretability and symmetry can be achieved only by current value accounting translated at current exchange rates. In the integrated economies case, symmetry alone is achieved through current value accounting translated by current exchange rates for monetary items and historical costs translated by historical rates for nonmonetary items. In the isolated economies case, symmetry alone is achieved through current value accounting for monetary items and historical cost for non-monetary items, all translated at the current rate. In both cases, including translation gains or losses in income is a condition for these results.
This extension of BW demonstrates (1) the translation rate required for symmetry depends upon the assumed relationship between prices and exchange rates, (2) a well-defined economic scenario exists where historical cost accounting using current rate translation results in symmetry, and (3) the results depend on including translation gains and losses in income.