Risk management with interdependent choice

Risks faced by traders from price movements are sometimes magnifiedby the actions of other traders. Risk-management systems whichneglect this feature may give a seriously misleading pictureof the true risks. The hazards arising from this potential blindspotare at their most dangerous when the prevailing conventionalwisdom lulls traders into a false sense of security on the attractivenessof a trading position. The efforts of one trader to reversehis trade makes more acute the need to follow suit on the partof others. For markets dominated by traders with short timehorizons, such interdependence leads to exaggerated price movements.Estimates of 'value at risk' which recognize such interdependenceof actions can diverge substantially from those given by conventionaltechniques.     

The integration of the formal and informal urban sectors in South Africa

Although the centre down and grass roots approaches in many respects may represent a developmental antithesis, a good case may be made for the combination of the two approaches under dualistic economic circumstances. An attempt is made in this paper to demonstrate how these diverse development policies may be successfully reconciled in urban Southern Africa. A review is given of the theoretical foundation of the two development approaches with a view to indicating how some aspects of these approaches may be combined to integrate the formal and informal sectors in urban areas in Southern Africa.     

Development management regions in South Africa: An empirical evaluation

In this study an attempt has been made to evaluate the validity of the boundaries of the officially approved ‘development regions’ of South Africa. A variety of statistical methods were used for the evaluation of the empirical validity of the boundaries of these regions. Firstly, two sets of homogeneous regions based on different sets of parameters were delimited. Secondly, two sets of regions indicating areas of different levels of economic development were determined. With the aid of this information, some changes in the boundaries of the existing regions are suggested. A historical account of attempts at regionalisation in South Africa for development management purposes is also given. A semantic assessment of definitions points to the need for a change in the use of the term ‘development region’ — for this specific purpose — to the term ‘development management region’.     

Die falschen Angriffe auf das Ehegattensplitting

These articles debate the pros and cons of the full income-splitting tax procedure. Ernst Niemeier defends this taxation scheme, because in his opinion it is not aimed at furthering families or children but making sure that a couple does not have to pay more taxes than two singles. He argues that there are constitutional reasons to treat equal incomes equally, which he refers to as “horizontal justice”. Furthermore, he rejects evidence of a negative labour supply effect on the second earner. A team of authors at the DIW find his argumentation not at all convincing. First, they say, determining tax justice or ability to pay is ultimately a political question and cannot be determined by scientists or the courts. Thus, a constitutional determination of marriage taxation on the existing full income-splitting procedure is excessive. Second, the empirical evidence of negative labour supply effects of full income splitting for the second earner can simply not be denied. Niemeier argues why such supply effects cannot exist.     

Development Debate and Practice Revisiting the South African magisterial districts of 1999

During the constitutional talks that preceded the democratic election of South Africa in 1994, final agreement could not be reached on the position of all new provincial boundaries. This resulted in so-called ‘hard’ and ‘soft’ boundaries, the former referring to sections of boundaries on which there was general agreement, and the latter to those where there were still differences of opinion about their position between the negotiating parties. Yet, as the building blocks of the new provinces and as the regional units most often used for planning and administrative purposes, it is the magisterial districts that were most severely distorted by the system of apartheid. In view of the changes that are taking place in the local government system of South Africa currently, especially the new district boundaries that have been announced by the Demarcation Board in November 1999, the distorting effect apartheid had on the boundaries of the previous magisterial districts, is demonstrated in this article. Various distortions are pointed out and changes are suggested which could significantly improve local, provincial and national governance in South Africa, if implemented.     

It is merely a matter of time: A meta‐analysis of the causality between environmental performance and financial performance

Research on the relationship between corporate environmental performance (CEP) and financial performance (CFP) continuously receives high attention in both general media and academic publications. One central issue concerns the causal effects between the two constructs. Because existing primary literature is characterized by its heterogeneous study designs and mixed empirical evidence, the aim of this paper is to explicitly shed light on the causality effects between CEP and CFP by means of a meta‐analysis of 893 empirical estimates from 142 CEP–CFP studies. Our findings suggest that in the short run (1 year), financial resources can increase a firm's environmental performance as proposed by the slack resources hypothesis; however, the effects disappear in the long run (after more than 1 year). Conversely, increasing environmental performance has no short‐term effect on a corporate financial performance, whereas a firm significantly benefits in the long term, which is in accordance with the Porter hypothesis. Overall, our results show that the causality between environmental performance and financial performance depends on the time horizon.     

Delta Hedging bei stochastischer Volatilität in diskreter Zeit

Ohne Zusammenfassung     

Existence level differences and spatial industrial restructuring in South Africa: RDP imperatives

The change of government in South Africa and the subsequent implementation of the Reconstruction and Development Programme (RDP) has necessitated afresh look at the spatial‐economic development policies of the past. Recently, an attempt was made to measure differences in existence level in South Africa using a combination of First and Third World criteria. In this paper these differences are related to general trends in population redistribution in the country since 1960 in an effort to assess the probable impact of existence level difference and migration on urbanisation in South Africa in the long run. On the basis of these assessments, expected trends in urban development in South Africa are compared with previous industrial development policies in an effort to determine RDP imperatives for the future.     

Measuring the spatial economic impact of the Maputo Development Corridor

Years after being launched, the Maputo Development Corridor (MDC) is still facing a number of socio-economic challenges. Prominent amongst these are its failure to create adequate employment opportunities; a top-down functional approach which excludes ordinary citizens; and an unfocused management approach. The MDC also suffers from a lack of clarity on key conceptual issues such as the economic influence exerted by its nodes along the corridor and the width of its economic influence away from the spine of the corridor. This study empirically establishes the influence of nodes along the MDC and ascertains the statistical significance of the impact of the corridor over distance away from its spine. ArcGIS, standard statistical analyses and multivariate regression analysis are used to determine the relative impact of nodes on subsets of the corridor along that corridor as well as the width of its impact at various distances away from the N4 spine.