Acta Universitatis Danubius. Œconomica

A Panel Threshold Regression Approach to Establish The FDI-Exports Linkage in Emerging Markets

Kunofiwa Tsaurai — 2024-12-20

This paper explored the impact of foreign direct investment (FDI) on exports in emerging markets using panel data ranging from 2004 to 2019. More specifically, it studied the minimum threshold level of FDI that enhances a significant exports growth in emerging markets using the static Hansen (1999)’s panel threshold approach. Existing literature agrees that FDI forms an integral component of exports growth but recently, it is clearer that FDI does not only need to be available but must exceed a certain minimum threshold point before host countries can begin to experience significant exports growth. That is the reason the author carried out this study to determine the minimum threshold level of FDI that lead to significant exports growth in emerging markets. Results show that FDI significantly improved exports in emerging markets as expected. In addition, levels of FDI equal to and above a threshold level of 2.67% of GDP led to significant exports growth in emerging markets, in agreement with more recent available literature. Such results make it prudent for emerging markets to implement policies and mechanisms that enhances FDI inflow to expand the exports base of their respective countries.

Logit Model for Sovereign Credit Ratings in South Africa

Justice Mundonde — 2024-12-20

The transition of Bretton-Hoods Institutions from being providers of concessionary funding into brokers of private capital implies that credit ratings have become the lynch pin to capital access. The study critically investigates whether the determinants of credit ratings identified in literature are relevant to South Africa. Single country studies that identify the drivers of rating scores in South Africa are scant. Fitch and Standard and Poor ratings are collected for the 22 years ending 2022. Binary framework econometric approach with the use of logit regression methods was adopted. Given the binary nature of the dependent variable, a non-linear formulation that forces the predicted values to be between 0 and 1 is desirable. Across the two international credit ratings, the explanatory power of the estimated models has good performance. Evidence is provided in the study that six macroeconomic variables drives credit ratings in South Africa. The variables are the balance of payment, current account balance, inflation, ratio of foreign debt to GDP, gross domestic product, and the ratio of house-hold debt to disposable income. The exchange is not an essential determinant of sovereign ratings in South Africa. Based on the empirical findings of the study, it is recommended that the government of South Africa should implement polices that stabilises macroeconomic fundamentals. Structural production bottlenecks need urgent attention to enhance the investment attractiveness of the country and boost GDP. Furthermore, the study recommends that the government institute measure to stabilise debt levels at both national and household level.

Nexus between Digital Transformation and Cost Management in Nigerian Manufacturing Companies

Rafiyat Bosede Abiloro — 2024-12-20

This study examined the connection between digital transformation and cost management, focusing on how technology can enhance efficiency and decision-making in Cadbury Nigeria Plc. It specifically assesses the prevailing cost management practices in Cadbury Plc in the context of digital transformation and analyzes the effects of technology-driven cost management strategies on organizational efficiency and decision-making processes within Cadbury Plc.The research method integrated both quantitative and qualitative approaches to investigate the relationships between digital transformation initiatives, technology-enabled cost management strategies, and organizational outcomes. Self-administered questionnaires were distributed to collect primary data from respondents across various departments within Cadbury PLC. The population of the study comprised 250 staff members, with representation from departments such as Production, Sales and Marketing, Finance, Human Resources, Supply Chain Management, Research and Development, Quality Assurance, and Information Technology. The sample size was determined using Yamane's Sample Size statistical techniques. The findings revealed the relationship between digital transformation initiatives, technology-enabled cost management strategies, and organizational outcomes at Cadbury Plc. The regression analysis revealed that the implementation of digital transformation initiatives positively influences the effectiveness of cost management practices, as evidenced by the statistically significant coefficient (β = 0.487, p < 0.001) while the regression result of the technology-enabled cost management strategies has significant relationship (β = 0.296, p = 0.049) on Cadbury efficiency and decision-making. The positive impact observed suggests that Cadbury Plc has successfully leveraged digital initiatives to improve its cost management practices, thereby enhancing operational efficiency and competitiveness. In conclusion, this study provides actionable insights for organizations navigating the complexities of digitalization, emphasizing the importance of strategic technology adoption in enhancing cost management practices and driving organizational success.

Financial Inclusion and Economic Growth in Sub-Saharan Africa: A Panel ARDL and Granger Non-Causality Approach

Oyelude Yekeen Oyelowo — 2024-12-20

The study examines the impact of financial inclusion on economic growth in sub-Saharan Africa from 2010-2022. The correlation analysis revealed that all coefficients of the variables were below 0.8, indicating an absence of multicollinearity issues. However, the cross-sectional dependency test findings indicated interdependence among the nations studied. Subsequently, a second-generation unit root test was employed to assess the stationarity of the variables. The unit root test revealed a mixed level of stationarity among the variables. Utilising the Augmented Mean group approach, it was found that GDPCPS, NAC, NBR, NAT, and DAT positively correlated to economic growth in the region. Conversely, POP, TOT, and INF are negatively related to economic growth. The causality test also revealed bi-directional causality between NAC and GDPGR, NBR and GDPGR, BRA and GDPGR, INF and GDPGR, and POP and GDPGR variables. At the same time, there is uni-causality between NAT and GDPGR, DAT and GDPGR, GDPCPS and GDPGR, TOT and GDPGR. In response to our findings, the study recommends that the government and policymakers in SSA formulate policies to ensure that all the proxies of financial inclusion are expanded as they all trigger economic growth.

Revisiting the Nexus between Climate Change and Unemployment in South Africa

Ahmed Oluwatobi Adekunle — 2024-12-20

Emancipating policy coherence and achieve a sustainable future, it is essential to identify the
linkages between the 17 Sustainable Development Goals (SDGs) put out by the UN. Sequel to this, the
study revisits the nexus between climate change and unemployment in South Africa. The study
employed time series data span through 1986-2021. The ARDL econometric techniques is used to
evaluates the nexus amid the variables. Given that the long-term coefficient of climate change (Tpr) is
positive and statistically significant at the 5% level, the long-run result support the expected sign that
climate change has a positive impact on unemployment in South Africa. The government of South
Africa need thus concentrate more on lowering the country’s inflation rate and strengthening the local
currency relative to the US dollar. In the meantime, the shortage of jobs in South Africa will worsen
due to the rise in unemployment brought on by the rising temperatures. Here, the government should
increase funding at the federal level for a number of industries, including forestry, tourism, agriculture,
and fisheries, that are heavily reliant on climate change.

Credit Risk Determinants in Sub-Saharan Africa Banking Systems

Zainab Jimoh — 2024-12-20

This study investigated credit risk determinants in sub-Saharan Africa banking systems. The global financial crisis in 2008 to 2009 has caused banking crises. This study used time series data within a timeframe of 2016–2023, which included 22 banks in SSA. A dynamic panel data method was employed for estimation, utilizing techniques such as pooled-OLS, fixed effects, two-step difference, and system GMM estimation. The results of the estimations showed that the ratio of non-performing loans to total gross loans would decrease with an increase in the real GDP growth rate. The study found that a 1% rise in the real GDP growth rate results in a 0.13–0.23% point decrease in non-performing loans. However, it was discovered that the following factors significantly and favorably affect non-performing loans (NPLs): trade openness, volatility index - VIX as a proxy for global volatility, domestic credit given by banks to the private sector as a proportion of GDP, inflation rate, and the hypothetical variable responsible for the global financial crisis of 2008–2009.

AI-Driven Economies: How Artificial Intelligence (AI) is Reshaping Business Administration and Decision-Making.

Junaid Butt — 2024-12-20

In an era where artificial intelligence (AI) is no longer a futuristic concept but a
transformative force in business, this article explores the profound impact of AI on business
administration and decision-making. On March 13, 2024, the European Union (EU) Parliament adopted
the world”s first law governing "artificial inelegance" the EU Artificial Intelligence Act of 2024 “the
EU AI Act, 2024”. As organizations increasingly embrace AI technologies, they are not only
enhancing operational efficiency but also reimagining their business models and strategies. This
research delves into the ways AI is revolutionizing traditional practices, from automating routine tasks
to facilitating data-driven insights that drive strategic innovation. Through compelling case studies
across various industries, we highlight the successes and challenges faced by companies navigating this
AI-driven landscape. Additionally, we examine the implications for the workforce, addressing concerns
over job displacement and the urgent need for reskilling in an increasingly automated world. By
analyzing emerging trends and projecting the long-term effects of AI on global business ecosystems,
this article provides a comprehensive overview of how AI is reshaping the future of work, competition,
and economic growth. Join us as we uncover the opportunities and risks presented by AI-driven
economies and chart a path toward a sustainable and inclusive business landscape.

Effect of Cooperative Membership on Production of Plantain Farmers in Ijebu North Local Government Area, Ogun State, Nigeria

Ezekiel Olaoluwa Akerele — 2024-12-20

The study aimed to evaluate the impact of cooperative membership on the productivity of
plantain farmers in Ijebu North Local Government Area, Ogun State, Nigeria. It specifically examines
the socio-economic characteristics of these farmers, the influence of cooperative membership on their
production, access to resources, and the cost-return structure of their farming activities. Primary data
were collected for this study using Questionnaire. The study employs both descriptive and inferential
statistical methods. Data collected were analyzed using Descriptive statistics, Multiple regression
analysis, Logistic regression and Budgetary analysis. The results revealed that cooperative membership
significantly influences plantain production, with an R-squared value of 0.441, indicating that 44.1%
of the variation in plantain production is explained by the independent variables. Age (β = 0.380, p <
0.001), access to extension services (β = 0.154, p = 0.276), and farm size (β = 0.063, p = 0.399)

positively impact production, while gender (β = -0.274, p = 0.002) and access to information (β = -
0.258, p = 0.035) negatively influence production. Among the farmers (36.0%) are male, and 64.0%
are female. In terms of access to resources, logistic regression results show that cooperative membership
increases the probability of accessing land (β = 0.400, p < 0.05), inputs (β = 0.330, p < 0.05), and credit
(β = 0.290, p < 0.05). The cost-return analysis indicates that the average return on investment (ROI) for
plantain farmers is 1.45, meaning that for every Naira invested, farmers earn N1.45 in return. Based on
these findings, it is recommended that agricultural cooperatives enhance their support systems,
particularly in providing easier access to resources and addressing the capital needs of farmers. The
study concludes that cooperative membership can be a valuable tool for improving the productivity and
sustainability of plantain farming in the study area, provided that the identified challenges are
adequately addressed.

Sustainability Practices and Financial Performance of Non-Financial Quoted Firms in Nigeria

Ezekiel Olaoluwa Akerele — 2024-12-20

The study examined the impact of sustainability practices on the financial performance of non-financial quoted firms in Nigeria. The research design adopted for the study is ex-post facto covering a ten-year period from 2011 to 2020 and the focused population is all the 64 companies across five sectors of the Nigerian Stock Exchange namely oil & gas, consumer goods, industrial goods, healthcare, and ICT sectors. The study adopted stratified sampling techniques to select 56 firms while secondary data sourced from annual reports, sustainability reports, codes of business conduct and ethics, and other stand-alone reports of the selected firm were used for the study, a multiple regression analysis technique was utilized for the models which were tested at 5% level of significantwith the aid of Stata 14.1 software of the statistical package for the analysis of the data. The study as revealed by the Fixed Effects Model (FEM) analysis showed no statistically significant association between sustainability practicesand ROA which has Environment index coefficient as 0.011 and p-value of 0.973, Social index coefficient as 7.077 and p-value of 0.358, and Ethical index coefficient as 11.867 and p-value of 0.874. Similarly, the Pooled Ordinary Least Squares (POLS) regression analysis found no significant relationships between sustainability practices and ROEwhit the coefficient for the three sustainability metricsare 0.218, 70.615 and 36.824, while their p-value are 0.863, 0.247 and 0.397 respectively. Again, the POLS regression analysis revealed no significant associations between sustainability practices and NPM as the coefficient for the three proxy of sustainability practices stands as 0.351, 7.877 and -19.656 while their p-value are 0.893, 0.95, and 0.439. The overall results based on the models and data used in the study suggest that sustainability practices do not have a significant influence on the financial performance metrics (ROA, ROE, and NPM) of non-financial firms in Nigeria. The study concluded that there is a weak correlation between sustainability practices and financial performance of non-financial quoted firms in Nigeria and their statistical relationship is not significant. It is recommended that companies in Nigeria adopt sustainable practices as a business strategy rather than as a compliance requirement in order to match up with global trends.

Evaluating the Impact of Covid-19 Lockdown on Business Continuity and Entrepreneurial Resilience in Nigerian Educational Institutions: A Swot Analysis

Azeez Tunbosun Lawal — 2024-12-20

During the outbreak of the COVID-19 pandemic, schools across Nigeria were shut down indefinitely, leaving many private school owners struggling to generate income and meet both personal and business-related expenses. Despite this widespread disruption, some private schools were able to continue fulfilling their commitments to key stakeholders. This study aimed to identify the strategies adopted by these schools to navigate the challenges posed by the lockdown. A phenomenological research approach was used to explore the SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis of selected private schools that managed to remain operational, using focus groups to gather data.The results of the study indicated that factors such as digital literacy, teacher motivation, and the size of the school played crucial roles in helping these schools remain functional during the lockdown period. Based on these findings, the study recommends that private school owners should prioritize investments in information and communication technology (ICT) to support both academic and financial operations. Additionally, schools should focus on hiring ICT-savvy and motivated employees. It is also suggested that the government consider providing financial support to the sector, such as recapitalization initiatives, stimulus packages, or concessional loans, to help ensure the long-term viability and growth of private schools.

Grain Price Discovery and Location Differentials in South Africa

Daniel Mokatsanyane — 2024-12-20

Abstract: This paper investigates the price discovery process between white and yellow maize spot prices and their respective futures prices in South Africa's SAFEX market, aiming to understand how futures prices inform spot markets. Building on previous South African studies, it employs the Toda and Yamamoto VAR Granger Causality method to analyze daily time series data for white and yellow maize from July 15, 2009, to March 23, 2023, revealing causal relationships between spot and futures prices. Results show white maize spot prices are Granger-caused by white maize futures prices, suggesting short-run causality and demonstrating price discovery in the spot market. A similar pattern is observed for yellow maize. However, mixed results emerge when futures prices are tested as the dependent variable, showing both bidirectional and unidirectional relationships between spot and futures prices. These findings emphasize the importance of futures prices in shaping spot prices for both maize types; while spot prices reflect fundamentals like supply and demand, futures prices capture market sentiment and external influences, valuable for traders and policymakers. This study adds insights into price discovery dynamics in the South African maize market, with implications for agricultural commodity traders and market analysts through its robust econometric approach.

From Dollar Dependency to BRICS Autonomy: Legal and Economic Impacts on Global Trade Governance.

Junaid Sattar Butt — 2024-12-20

The dominance of the U.S. dollar in global trade and finance has long influenced international economic stability, governance, and legal structures. However, the emergence of a BRICS ‘an acronym for Brazil, Russia, India, China, and South Africa’—a symbolic BRICS unified currency note for 9 Countries including Brazil, China, Egypt, Ethiopia, India, Iran, Russian Federation, South Africa, United Arab Emirates was introduced at the recent 16^th BRICS summit[1] in Kazan, Russia—poses transformative potential for global trade governance. This study investigates the legal and economic implications of shifting from a dollar-dependent to a BRICS-driven trade system, analyzing the prospective impacts on global financial governance, regulatory frameworks, and international economic law. The research explores how a BRICS currency could disrupt established trade agreements, impact currency valuation, and challenge the roles of international institutions like the International Monetary Fund (IMF) and World Bank. This shift also raises critical questions about sovereignty, autonomy, and the capacity of existing legal structures to accommodate a multipolar currency system. Through a comparative legal analysis and examination of geopolitical dynamics, this paper will assess the viability of a BRICS currency in reducing dollar dependency, the necessary adjustments in international regulatory frameworks, and the potential for reshaping governance structures to foster a more equitable and diversified global economic order. The study aims to contribute to the ongoing discourse on financial autonomy and multi-polarity by offering policy recommendations for integrating a BRICS currency into the global trade landscape, underscoring the implications for trade law, financial stability, and international governance. Ultimately, this research provides a timely analysis of how a BRICS currency could redefine global economic power and establish a new era of financial sovereignty for emerging economies.

[1] ET Online. (2024, October 24). US dollar dominance to end? BRICS launches symbolic banknote; Putin says, ‘They used it as weapon…’ The Economic Times. (Accessed on 25-10-2024). https://economictimes.indiatimes.com/news/international/world-news/us-dollar-dominance-to-end-brics-launches-symbolic-banknote-putin-says-they-used-it-as-weapon/articleshow/103126330.cms

Assessment of Customer Satisfaction in the Higher Education Institution Using Servqual Model

Joseph Musandiwa — 2024-11-05

Abstract: The paper aims to assess customer satisfaction with the administrative services provided to students of a particular University in South Africa using the SERVQUAL model. Service quality plays an integral role in the higher education institution’s reputation, competitiveness and most importantly in students’ satisfaction. A quantitative, descriptive approach was conducted to determine the level of students’ satisfaction with the administration services that is rendered by particular university’s central administration offices. 288 students participated in the study and a self-administered online and physical questionnaires were utilised to collect data. The findings revealed that the students are dissatisfied with the level of quality administration services provided by the University’s central administration offices across all dimensions of the SERVQUAL model. This was determined by the low perceptions scores of service quality as compared to the expectations scores. The paper recommends improvement of service quality so as to enhance the student satisfaction. Further, it is suggested that the university needs to invest on modern day equipment, advanced and secure technologies as well as training of staff in order to provide satisfactory services to the university’s principal stakeholders which are the students.

Artificial Intelligence Applications Adoption and Use in Universities: A SEM Approach

Alexander Maune — 2024-12-20

ELearning platforms adoption and use by university students has become prevalent worldwide, developing nations still lag behind. This study aims to establish critical paths amongst determinants of “behavioural Intention” and “use behaviour” in eLearning platforms adoption and use by university students. The PLS-SEM method was use to evaluate the modified unified theory of acceptance and use of technology path model. A sample of 520 university students from Zimbabwe was used to collect data using an online survey created on Google Forms. The findings show that “Habit” had the most influence (0.804) on “Behavioural Intention,” followed by “Performance Expectancy” (0.319) and “Effort Expectancy” (0.270). Behavioural Intention had a significant influence (0.831) on “Use Behaviour.” The path model explains 88.8% of “Behavioural Intention,” and 76.1% of “Use Behaviour” variances. This study though limited, it is significant to students in higher education, policy makers and researchers given the importance of technology in the education sector.