Financial liberalization and financial instability in the selected SADC member countries
- Authors: Cele, Nolungelo Mercy
- Date: 2018
- Subjects: Finance Financial crises Finance -- Developing countries
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10353/8978 , vital:34179
- Description: The study examined the impact of financial liberalization on financial instability in selected SADC member countries namely South Africa, Tanzania, Madagascar and Botswana for the period 1970-2012. The Panel data methodology was adopted to establish the relationship between the two variables. Impaired loans were used to capture financial instability and financial reforms to capture the level of financial liberalization. Credit to the private sector, government expenditure, GDP and inflation were utilised as control variables The empirical findings reveal that financial liberalization leads to financial instability. The financial reforms were found to be positively related with the impaired loans ratio in almost all the specifications. It was also found that financial instability intensifies when the global financial crisis is taken into consideration. This suggests that financial liberalization can therefore be another source of financial instability in the SADC countries. The empirical results imply that policy makers should focus on reforms that give due share to the regulations rather than just simply liberalizing the financial sector.
- Full Text:
- Date Issued: 2018
- Authors: Cele, Nolungelo Mercy
- Date: 2018
- Subjects: Finance Financial crises Finance -- Developing countries
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10353/8978 , vital:34179
- Description: The study examined the impact of financial liberalization on financial instability in selected SADC member countries namely South Africa, Tanzania, Madagascar and Botswana for the period 1970-2012. The Panel data methodology was adopted to establish the relationship between the two variables. Impaired loans were used to capture financial instability and financial reforms to capture the level of financial liberalization. Credit to the private sector, government expenditure, GDP and inflation were utilised as control variables The empirical findings reveal that financial liberalization leads to financial instability. The financial reforms were found to be positively related with the impaired loans ratio in almost all the specifications. It was also found that financial instability intensifies when the global financial crisis is taken into consideration. This suggests that financial liberalization can therefore be another source of financial instability in the SADC countries. The empirical results imply that policy makers should focus on reforms that give due share to the regulations rather than just simply liberalizing the financial sector.
- Full Text:
- Date Issued: 2018
The nexus between savings, investment and foreign capital in South Africa : an application of the Feldstein-Horioka puzzle
- Authors: Mtolo, Inga
- Date: 2018
- Subjects: Investments, Foreign -- South Africa Saving and investment -- South Africa Capital movements -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10353/8968 , vital:34177
- Description: This study investigates the relationship between savings, investment and foreign capital in South Africa, with special focus on the application of the Feldstein-Horioka theory. South Africa is a country that is still faced with relatively low saving levels. Given the low savings experienced by the country, available literature has alluded that foreign capital has played a greater role as the major driver of private investment expenditure in South Africa. Based on this background, the study empirically investigates the relationship between savings, investment and foreign capital utilising the Autoregressive Distributed Lag Model estimation technique for the period 1965 to 2015. The empirical results revealed that there is a positive and significant relationship between savings and investment in South Africa. The empirical results also show that for the period 1995 to 2015, the different types of external financial flows utilized in the study and investment have a positive relationship. These results have been consistent with our apriori expectations and other prior studies. This suggests that, in the case of South Africa, apart from interest rates, there are other factors that determine investment. The positive relationship between investment and foreign capital flows suggest that policies which are aimed at attracting the different types of foreign financial flows should be implemented.
- Full Text:
- Date Issued: 2018
- Authors: Mtolo, Inga
- Date: 2018
- Subjects: Investments, Foreign -- South Africa Saving and investment -- South Africa Capital movements -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10353/8968 , vital:34177
- Description: This study investigates the relationship between savings, investment and foreign capital in South Africa, with special focus on the application of the Feldstein-Horioka theory. South Africa is a country that is still faced with relatively low saving levels. Given the low savings experienced by the country, available literature has alluded that foreign capital has played a greater role as the major driver of private investment expenditure in South Africa. Based on this background, the study empirically investigates the relationship between savings, investment and foreign capital utilising the Autoregressive Distributed Lag Model estimation technique for the period 1965 to 2015. The empirical results revealed that there is a positive and significant relationship between savings and investment in South Africa. The empirical results also show that for the period 1995 to 2015, the different types of external financial flows utilized in the study and investment have a positive relationship. These results have been consistent with our apriori expectations and other prior studies. This suggests that, in the case of South Africa, apart from interest rates, there are other factors that determine investment. The positive relationship between investment and foreign capital flows suggest that policies which are aimed at attracting the different types of foreign financial flows should be implemented.
- Full Text:
- Date Issued: 2018
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