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Socio-Economic Factors Affecting Profitability of Sorghum Farming in Siaya County, Kenya
Get PDFDespite the nutritional benefits of sorghum and its ability to thrive in the low and unpredictable rainfall conditions in Siaya County, farmers in the area have not widely adopted it as a viable enterprise. In this paper, we study profitability of sorghum production and its determinant factors in Siaya County, Kenya. By randomly sampling 310 farmers, the paper shows that sorghum farming in Siaya County is profitable, with an average gross margin of Kshs. 4,286 per acre and the most profitable farm having a gross margin of Kshs. 24,000 per acre. Moreover, the factors such as the age and education level of the household head, household size, household income, access to extension services, the number of crops intercropped with sorghum, and the nature of farming have significant impacts on gross margins.
Thus, the study recommends improving extension services; encouraging farmers to embrace sustainable farming practices such as mixed farming; and incentivizing farmers into sorghum farming
Financialization and Economic Growth Nexus in South Africa
Get PDFWe empirically investigate the effects of financialization on economic growth in South Africa. The country experienced increases in the share of the financial sector since the democratic dispensation. This country is also one of the few developing countries with a large financial market. The sample period includes a long-run horizon from 1994 to 2021. The study applies quantile regression methodology which we use to explain the effects of financialization at different levels of economic growth. We estimate the effects of financialization at the 25th, 50th, 75th percentile of economic growth. The key measure of financialization is the finance gross value added and the measure of economic growth is the gross domestic product. We find that financialization has a significantly high and positive effect only at all the levels of economic growth. From the different percentiles, financialization contributes more to higher levels of economic growth
Oil Sector Revenues and the Marginal Propensity to Import: A Focus on Oil-Exporting African Countries
Get PDFCountries that possess abundant natural resources are often criticized for spending a larger portion of their revenue from selling those resources on imports, as their economies tend to lack diversification. This study aims to examine whether this claim is valid for oil-rich African countries. The paper uses the panel ARDL method to investigate the effect of oil sector revenues on the marginal propensity to import in oil-exporting African countries from 2000-2020. The findings show that in the short run, oil sector revenues do not have a significant impact on the marginal propensity to import. However, in the long run, oil sector revenues have a positive and significant effect on the marginal propensity to import. Additionally, the study reveals that exchange rates have a positive and significant impact on the marginal propensity to import, while the impact of trade openness is negative and significant. Furthermore, gross domestic savings have a negative and significant effect on the marginal propensity to import during the same period. Therefore, the study concludes that increasing oil revenues in the selected countries only resulted in a rise in imports in the long run. It suggests that oil-exporting African countries should save more during periods of rising oil prices as a buffer, and channel these savings towards building facilities that encourage economic growth. It also recommends that exchange rate policies should be used to discourage excessive importation during periods of rising oil prices
A Non-linear Dependency Test for Market Efficiency: Evidence from International Stock Markets
Get PDFOne of the on-going difficulties for finance practitioners is to out rightly prove or disapprove the concept of market efficiency because the constituents of the concept do not always reflect real financial markets. Market efficiency is an idle state that varies with time and may have dire consequences for active market participants. The aim of this study was to empirically investigate market efficiency before, during and after a period of financial distress. A BDSL non-linear dependency test was used to observe the logic distance between the observed pairs of returns and the expected pair vectors in stock prices for the JSE, Nasdaq, CAC 40, DAX, Nikkei 225 and BIST100. The findings revealed that market efficiency is a dynamic concept. Most financial markets under consideration show strong signs of efficiencies before and after financial distress. However, significant inefficiencies were observed during a bearish period probably due to fear and greed. Considering the dynamic nature of market efficiency, market participants may enhance the value of their portfolios by alternating their investment style accordingly. More specifically, investors should consider investing in index fund EFTs during periods of financial distress and adopt an active management strategy during bullish periods. Also, scarce liquidity seems to be the major cause of market inefficiency during periods of financial distress therefore, quantitative easing is strongly recommended during these episodes
Impact of government ownership on banks' profitability: Empirical evidence from commercial banks in Uzbekistan
Get PDFThe banking system of a country plays a pivotal role in achieving sustainable economic growth in a country. Recent transformations and reforms in the economic policies of the Republic of Uzbekistan have led to significant changes in the banking sector. Studying the key factors which contribute to the profitability of commercial banks in Uzbekistan is becoming increasingly important. Thus, this research paper examines the main determinants of banking profitability in the Republic of Uzbekistan. For this, various indicators of the bank's effectiveness, such as specific banking characteristics, as well as macroeconomic determinants, were considered to investigate their influence on the profitability of Uzbek banks. To be more accurate liquidity, capital, size, government ownership, operational expenses, inflation, and gross domestic product (GDP), were included as explanatory variables. In turn, the return on assets (ROA) and the return on equity (ROE) were used as proxy indices of profitability for Uzbek banks. Panel data for the period from 2017 to 2021 have been employed on 32 commercial banks of Uzbekistan. Empirical conclusions have shown that the profit of the bank is largely determined by specific factors affecting its activities. The regression results have shown that government ownership and operating costs have negative and statistically significant relationship with the profitability of a bank. Surprisingly, GDP growth rate is negatively associated with ROE and ROA of commercial banks in Uzbekistan. Inflation and liquidity rates were found to have positive relationship with ROE. Other internal determinants, such as capital, and size have shown statistically insignificant impact on the bank's profitability
How Exchange Rate Changes Affect Trade Balance in Ghana
Get PDFIn international commerce, a steady exchange rate has been touted as a positive indicator for all economies. It increases investor trust and allows global market participants to make realistic business forecasts. Despite the adoption of multiple regimes, Ghana's exchange rate has seen significant depreciation. The literature on trade have paid particular attention to the link between trade balance and exchange rate but failed to include certain relevant variables such as FDI and inflation which this study believes can influence changes in the trade balance. This research estimated the effect of exchange rate on trade balance in Ghana by including these relevant variables that extant studies have ignored. It used yearly data from the World Bank Development Indicators from 1980 to 2019 in a Vector Error Correction (VEC) model and concludes that increases in exchange rate has a short run and long run negative effect on trade balance confirming the established fact that depreciation adversely affect the trade balance of Ghana. However, inflation and FDI were shown to have a positive and significant influence on Ghana's trade balance. The study therefore calls for improved policies and actions to earnestly reduce imports, encourage exports and strengthen the value of the cedi
Real Exchange Rate Dynamics and Trade Balance in WAEMU Countries: Evidence from Panel Nonlinear ARDL Approach
Get PDFThis study estimates the impact of real exchange rate on the trade balance of seven countries of the West African Economic and Monetary Union (WAEMU). In examining this issue, most previous studies assume the relationship to be symmetric. In this paper, we relax this assumption by extending the nonlinear ARDL approach to panel data framework. We filter appreciations from depreciations in the real exchange rate and estimate their respective effects on the trade balance using the Pooled Mean Group (PMG) estimator. The results for the panel show that the long-run relationship between real exchange rate and trade balance is asymmetric. More precisely, the trade balance was found to respond stronger to depreciations in the real exchange rate than to appreciations in the long-run. In the short-run, however, the trade balance is not sensitive to the real exchange rate regardless of whether it appreciates or depreciates. The results for individual country estimation reveal cross-country heterogeneity in the short-run relationship between the real exchange rate and the trade balance
The COVID-19 Crisis and Interaction between the JSE, Real Estate, Energy, Commodity and Cryptocurrency Markets
Get PDFThis paper examines the long-run interactions between South African stock (JSE) and real estate markets, with global asset markets such as oil, gold, platinum, and cryptocurrency markets during pre-Covid-19 tranquil period and during Covid-19 pandemic period comparatively using cointegration, causality and structural break tests. Findings of the paper shed light on the fact that cointegrations relationships between Bitcoin - JSE, Oil - JSE, and Real Estate – JSE were significant during pre-Covid period, while these significances weakened or disappeared during Covid period. On the other hand, cointegration relations show up between Oil – Platinum market and Gold – Real Estate market. It implies that JSE became volatile during Covid period comparing to Oil, Platinum, Gold markets in South Africa
Economic Impact of Some Determinant Factors of Nigerian Inflation Rate
Get PDFThe Nigerian Government both previous and present has introduced several policies and programmes to reduce or proffer remedial measures to militate against the negative impact of high inflationary levels on the Nigerian economy. All these measures have not led to a productive result as the inflation rate has continued to sour higher over the years. This paper aimed at examining the economic influence of the determinant factors that influence inflationary trends that are multi-dimensional and dynamic which continue to defy solutions. The data used for this work was sourced from the National Bureau of Statistics and Central Bank of Nigeria, from 1983 to 2020. The ordinary least square approach was used to analyze the data and the result shows that consumer's price index, interest rate and total export has a positive effect on Nigeria inflation, but only the Consumer's Price Index (CPI) have a statistically significant effect on the Nigeria inflation at 99% confidence interval. Result also shows that the exchange rate, foreign reserve, money supply, real GDP, real income and total imports has a negative effect though not statistically significant on the Nigeria inflation rate. The result of the Granger causality test shows exchange rate and total imports to Granger cause Nigeria inflation. It is recommended that Government should improve locally manufacture products to meet international demands to reduce total imports
An Exploratory Study of the Causality between Internet Use, Innovation, and Economic Growth in Tunisia: An indispensable Case Analysis
Get PDFIn line with the exogenous and endogenous theory coupled with the seminal Schumpeterian contribution, we attempt to investigate the impact of the use of internet and innovation on economic growth in the case of the Tunisian economy. For this purpose, we employ the ARDL bounds testing methodology over the period 1985-2018. In the short-run, our empirical facts outline the absence of a significant effect of innovation on economic growth. Also, our empirical findings reported that the internet stimulates economic growth. However, in the long-run, our empirical findings pointed out the presence of the negative impact of the innovation and the use of internet on economic growth. Moreover, our results show a significant positive impact of the internet and economic growth on innovation in the long-run. Finally, our results show a negative impact of economic growth on the use of the internet. However, the results display a significant positive impact of innovation on the use of the internet. From these perspectives, the Tunisian authorities should take seriously the innovation and the potential of the use of the internet which can help the economy to be modernized, diversified, and robust to create new jobs and to find new markets and new strategic partners, and new opportunities