Analysing job creation effects of scaling up infrastructure spending in South Africa

In a first for South Africa, this article draws on literature on infrastructure productivity to model dynamic economy-wide employment impacts of infrastructure investment funded with different fiscal tools. Using a dynamic computable general equilibrium model, the South African investment plan is modelled, given the infrastructure externality. Alternative fiscal scenarios to finance the policy are modelled in the article. In the long run, unemployment decreases for all types of workers under one of the scenarios. In the short run, only elementary occupation workers benefit from a decrease in unemployment; for the rest, unemployment rises.     

The great divergence on the Korean peninsula (1910–2020)

Before the 1960s, North Korea's GDP per capita was 30%–50% higher than South Korea's due to industrialisation during the 1930s. However, the governments of the two Koreas pursued different goals in the 1960s, which resulted in a reversal. The South Korean government made economic growth its ultimate goal. They did this by self-implementing, adjusting and instituting an export-oriented development strategy. On the other hand, the North Korean government tried to maximise its ability to survive by sacrificing gains from economies of scale. These differences brought about remarkable differences in economic performance. The gap between the two economies has continued to grow since the income level reversal in the 1970s.     

The Rocky Road to Legacy: Lessons from the 2010 FIFA World Cup South Africa Stadium Program

This article describes how the management and organization of the South African 2010 FIFA World Cup stadium program shaped the current legacy of an oversupply of overdesigned and underutilized stadiums. The article identifies seven key factors that explain the differences between expected benefits and the actual legacy. Identification of these factors contributes to the increasing academic interest in explaining the poor legacy outcomes of mega‐events. In conclusion, we recommend that future host country governments defragment their stadium programs by establishing a World Cup Delivery Authority (WCDA), with responsibility for the leadership and coordination of the stadium program.     

Board size,corporate regulations and firm valuation in an emerging market: a simultaneous equation approach

We investigate the association between board size and firm valuation for a sample of 169 firms from 2002 to 2011 in South Africa (SA). The SA corporate context is interestingly and uniquely characterised by an urgency to meet affirmative action regulations, such as black empowerment in board appointments, limited qualified and experienced directors, especially black directors, concentrated ownership, weak enforcement of corporate regulations and greater government ownership. These features make SA corporate boards perform a weaker agency (advisory, monitoring and disciplining) role than Western European and US boards, but a stronger resource dependence role, by providing access to resources, such as business contacts and contracts. This suggests that any positive impact of board size on firm valuation is likely to depend on the effective execution of the resource dependence role more than the agency role. Our results suggest that board size has a positive association with firm valuation, consistent with larger boards providing better access to resources. Overall, our results support the resource dependence role of boards more than their agency role. The results are robust across a raft of econometric models that control for different types of endogeneity, as well as different types of accounting and market-based firm valuation measures.     

Does Human Capital Protect Workers against Exogenous Shocks? Evidence from Panel Data on South Africa during the 2008‐2009 Crisis

The financial and economic crisis of 2008 and 2009 took a heavy toll on the South African economy. The economy contracted for the first time since 1998 and entered recession during the fourth quarter of 2008. The gross domestic product contraction was soon transmitted to the labour market. Between the second quarters of 2008 and 2009, employment fell by 3.8%. However, not all individuals were hit with the same intensity. Using panel data from a quarterly labour force survey unique in the African context, we find that human capital (i.e. education as years of schooling and workforce experience) provided a buffer against the shock. After controlling for observable characteristics, education and experience showed the potential to entirely offset the effect of the recession on the likelihood of employment. This has important policy implications, as it strengthens the case for strategic investments in human capital and helps identify the unskilled as having the greatest need for social safety net interventions during a recession.     

Examining dynamic currency linkages amongst South Asian economies: An empirical study

In this paper, we examine the currency market linkages of South Asian member countries using daily data from 6 January 2004 to 31st March 2016. Time invariant and varying Copula GARCH models show that South Asian countries, except for India and Nepal/Bhutan, have low levels of currency market linkages which can be ascribed to poor levels of intra-regional trade intensity and portfolio flows. We reconfirm the copula results through Diebold and Yilmaz methodology and document that currency market connectedness is very limited in the South Asian region. The trends of the fundamental determinants of currency co-movements for the South Asian member countries were compared with its neighbouring regional economic bloc in Asia which has a much longer history and a wider membership base i.e ASEAN + 6. From a comparative analysis, it was found that South Asia member states have to work on their governance parameters, improve on their trade linkages and trade tariffs and work towards greater degree of capital account convertibility with adequate safeguards to achieve higher levels of currency market linkages.     

Internal Migration of Blacks in South Africa: An Application of the Roy Model

This study investigates the internal migration of black males in South Africa over the period after the formal end of Apartheid using the 1996 census data. The two issues of our primary interests are the following: (i) whether migration patterns of black individuals are consistent with the income‐maximising hypothesis as related to the destination choice; and (ii) whether the redistribution of human capital is detected in internal migration. The results from conditional logit regressions on choices among individuals in 318 districts show that individuals prefer districts with higher expected wages, conditional on other regional characteristics. In addition, there exist differing preferences on the share of population with post‐secondary education by individuals with commensurate educational attainments. Black individuals with post‐secondary education tend to migrate into areas with a higher share of population with post‐secondary education and vice versa, which confirms the divergence of human capital levels across districts.     

Analyzing the welfare‐improving potential of land in the former homelands of South Africa

This article contributes to the debate on the role of land in reducing poverty in rural South Africa. It uses the year of arrival in the former homelands as an instrument for land access and size. This identification strategy is based on the fact that African households were forcibly relocated to the homelands during the apartheid. Due to increasing population pressure, later arrivals were less likely to be assigned land. The results show that land has a large positive effect on household welfare. Because the homelands are relatively disadvantaged areas, these results provide a lower bound for the positive effects of land on household welfare.     

The effects of regional trade integration and renewable energy transition on environmental quality: Evidence from South Asian neighbors

Improving environmental quality across South Asia has become one of the utmost important policy agendas of the concerned governments. The susceptibility of the majority of the South Asian countries to multifaceted climate change adversities has motivated the need to identify the factors that can function to ensure environmental sustainability across South Asia. Although several studies have highlighted the importance of globalization and cleaner energy use in tackling the environmental degradaton issues of the South Asian countries, very little is known regarding the impacts of regional trade and renewable energy transition in this regard. Hence, this paper aims to scrutinize the effects of enhancing intra-regional trade integration and undergoing renewable energy transition on per capita carbon dioxide emissions in the context of six South Asian nations between 1990 and 2016. The results from the recently developed cross-sectionally augmented autoregressive distributed lag regression approach, accounting for cross-sectional dependency and slope heterogeneity issues, reveal that facilitating trade among the South Asian neighbors reduces carbon emissions in both the short and long run. Moreover, enhancing the share of renewable energy in the aggregate energy consumption figures is also found to reduce carbon dioxide emissions in both the short and long run. Furthermore, both regional trade integration and renewable energy transition are found to jointly reduce carbon dioxide emissions in South Asia. The results also authenticate the existence of the environmental Kuznets curve hypothesis, while financial development and urbanization are found to boost carbon dioxide emissions only in the long run.