The importance of farmer education in South Australia

There is a significant challenge involved with balancing food security at local and global levels whilst mitigating the environmental and social consequences of the historically productivist agri-food system. This work will address the importance of education in the South Australian agricultural sector as a tool to maximise beneficial outcomes. The results of a blended method research project, which involved farmers and governance stakeholders in South Australia, are presented as empirical evidence highlighting the positive roles that formal education, in particular university education, have in regard to increasing sustainability. It was found that higher levels of formal education contributed to farmers being more likely to prioritise the socio-environmental outcomes of their agricultural land use. There was also a dramatic reduction in farmer concerns with government support mechanisms as education levels went from secondary or less, through to vocational qualifications, and finally university degrees. Interviews with agricultural governance stakeholders emphasised the role of education in building the adaptive capacity of farmers, and the subsequent positive outcomes for the future development of the South Australian agricultural industry. These results suggest that further education provides farmers with the capacity to compete effectively in a liberalised economy.     

Can (unusual) weather conditions in New York predict South African stock returns?

This paper investigates the explanatory power of certain weather variables, measured as deviations from their monthly averages, in a leading international financial trading centre, i.e., New York, for South African stock returns, over the daily period January 2nd, 1973 to December, 31, 2015. The empirical results highlight that these unusual deviations of weather variables have a statistically significant negative effect on the stock returns in South Africa, indicating that unusual weather conditions in New York can be used to predict South African stock returns, which otherwise seems to be highly unpredictable. In fact, a forecasting exercise recommends that a trading rule that considers those weather variables through a GARCH modelling approach seems to outperform the random walk model and thus beat the market.     

Revisiting the effect of regional integration on African trade: evidence from meta-analysis and gravity model

Two main shortcomings flaw the estimation of gravity model in previous studies that examined the trade-creating effects of African Regional Trade Agreements (RTAs). First, these studies fail to account for the multilateral resistance term. This omission makes the estimates from standard gravity model bias and inconsistent. Second, there is a significant proportion of zero trade flows, however, these studies also fail to account for them properly. They use either the Tobit model or replace zero flows with arbitrary small values. Apart from these problems, they also exhibit considerable heterogeneity in the RTA effects on trade. In this paper, a meta-analysis of previous empirical studies is conducted to derive a combined effect size and also to explain the heterogeneity. In addition, I use the gravity model to compare the trade-creating effect of the main African RTAs. Using the gravity model, I compare the estimation methods of previous studies to the Poisson pseudo-maximum-likelihood estimator that tackles the zero flows. From the meta-analysis, I find a general positive effect of African RTAs of about 27%–32%. A comparative assessment of the RTAs using gravity model shows a striking heterogeneity.     

Explaining banking stability in Sub-Saharan Africa

The study examined banking stability in Sub-Saharan Africa. The results reveal that banking spread (Net Interest Margin – NIM) is the main determinant of stability and the major means to achieve stability during crises periods. We however find the existence of a threshold effect in NIM.Crises in the banking sector consistently showed to reduce stability. While the results show that high percentage of foreign banks reduce stability, we find foreign banks help stabilize the banking sector in periods of crises. The results show that diversification could also have a positive impact on stability (Z-score) even though this relationship was not robust enough. The results also largely support the competition-fragility view. Particularly, we find that less competition during crises periods can help improve stability. Again, we find evidence for both concentration-stability and concentration-fragility hypotheses depending on the stability measure used. We however find that when large banks in concentrated markets are well regulated, stability could be improved. Weak regulatory environment reduces stability (Z-score) directly and matters during crises periods. Our results are robust to the use of different indicators of stability and estimation methods.     

Foreign aid and governance in Africa

This paper investigates the effect of foreign aid on governance in order to extend the debate on foreign aid and to verify common positions from Moyo’s ‘Dead Aid’, Collier’s ‘Bottom Billion’ and Eubank’s ‘Somaliland’. The empirical evidence is based on updated data from 52 African countries for the period 1996–2010. An endogeneity robust instrumental variable Two-Stage-Least Squares empirical strategy is employed. The findings reveal that development assistance deteriorates economic (regulation quality and government effectiveness) and institutional (corruption-control and rule of law) governance, but has an insignificant effect on political (political stability, voice and accountability) governance. While, these findings are broadly in accordance with Moyo and Collier on weak governance, they neither confirm the Eubank position on political governance nor the Asongu stance on the aid-corruption nexus in a debate with Okada and Samreth. The use of foreign aid as an instrument to influence the election and replacement of political leaders in Africa may have insignificant results. It is time to solve the second tragedy of foreign aid and that economists and policy makers start rethinking the models and theories on which foreign aid is used to influence economic, institutional and political governance in recipient countries.     

Migrant remittances and fertility

This study examines the role of migrants’ remittances in developing countries’ fertility transition. Employing an unbalanced panel of South Asian countries and controlling for various economic and socio-demographic factors, we find that remittances are significantly associated with a lower number of children born to women of childbearing age. This suggests the remittances’ substitution effect to be at play rather than the income effect, and may result from decreased need for children for financing the household’s future needs as well as from better access to healthcare and contraceptive methods available to migrant households. Remittances’ association with fertility appears to be more important than the transfer of fertility norms from migrants’ host countries. The monetary aspects of international migration may therefore be more important for the region’s demographic transition than social remittances.