Doctoral Degrees (University of Stellenbosch Business School)

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    Transcontextual futures : exploring the law as a tool for future making
    (Stellenbosch : Stellenbosch University, 2024-03) Nagtegaal, Jackie; Roux, Andre; Stellenbosch University. Faculty of Economic and Management Sciences. University of Stellenbosch Business School.
    ENGLISH SUMMARY: This study delves into the complex intersection of futures studies and the realm of law, placing it within the distinct backdrop of South Africa’s sociopolitical challenges. These include persistent issues of inequality, corruption, and eroding trust in institutions, all of which are further amplified by the uncertainty of a changing global landscape. As the gap between South Africa’s democratic aspirations and its present realities widens, this study has explored the potential of the law as a proactive instrument for orchestrating preferred futures. Despite the inherent capacity of the law to influence the future, sculpt social norms, and lay the foundation for ideal states and rights, it is often impeded by various barriers. This study explored these barriers through a transcontextual approach. The transcontextual futures framework was developed to understand complex relational dynamics and intricate webs of interdependence that characterise complex systems, offering a more contextually rich understanding of complex problems, and potential futures. The intricate relationship between the law and future, including their impediments, is explored through this framework. By intertwining the tenets of futures studies with the legal system, this study aimed to generate new insights and pave the way for further research directions. The overarching goal was to understand the complexity of South Africa's legal landscape and the role that the law could play in designing desirable and equitable futures that are resilient and sustainable.
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    Shadow banking and systemic risk in South Africa
    (Stellenbosch : Stellenbosch University, 2023-12) Mashimbye, Lawrence; Fanta, Ashenafi Beyene; Stellenbosch University. Faculty of Economic and Management Sciences. University of Stellenbosch Business School.
    ENGLISH SUMMARY: Shadow banking, credit intermediation involving entities and activities outside the regular banking system, is growing globally and even at a faster rate in emerging economies. The development of shadow banking is driven by a demand for safe and liquid investments redeemable at par, investors’ pursuit of higher returns, regulatory arbitrage, financial sector development, technology, and economic growth. Shadow banks perform credit, liquidity, and maturity transformation without or with limited supervision and backstop support from the central bank, which among policymakers and regulators in South Africa and elsewhere led to concern about shadow banks’ potential threat to financial system stability or systemic risk. However, a lack of data impeded the effective regulation of shadow banking. This study is motivated by three critical gaps in the literature. Firstly, there are few studies on the contribution of shadow banking to systemic risk globally, but none focus on South Africa despite the unique structure and composition of shadow banking in the country. Secondly, there is scant information on the interconnectedness within the shadow banking system. The interconnectedness, through counterparty contracts and common assets and market exposure, creates a channel for contagion in financial systems. Lastly, efforts to prevent systemic risk prioritise the monitoring of large shadow banking entities; however, whether a relationship exists between the size of shadow banks and system risk remains an empirical issue. Nevertheless, large financial institutions are theoretically assumed to be more connected such that their failure could trigger systemic failure. To this effect, we investigate the contribution of shadow banking to systemic risk in South Africa using monthly returns data of fixed-income funds, funds-of-funds, money market funds, and multi-asset funds for the period of January 2015 to December 2021. We measure systemic risk using Conditional Value-at-Risk (CoVaR) and Delta Conditional Value-at-Risk (ΔCoVaR) and apply the quantile regressions with financial sector returns as an independent variable. We include a set of state variables (equity market return, market volatility, yield spread) as independent variables to produce the time varying CoVaR and ΔCoVaR. We determine the contribution of shadow banking to systemic risk, and also breakdown the analysis into pre-COVID-19 and during-COVID-19 periods. We analyse interconnectedness in subsamples of shadow banks with high marginal contributions to systemic risk and examine the relationship between the size of shadow banks and systemic risk. Insights from the study are presented in three empirical chapters to address the critical gaps identified. In the first chapter, we report the contribution of shadow banking to systemic risk in South Africa and highlight that all shadow banks contribute to systemic risk. Multi-asset funds provide the largest contribution to systemic risk, followed by funds-of-funds and fixed-income funds. Whilst money market funds do not contribute to systemic risk during whole study period, they are the largest contributors during COVID-19. Therefore, money market funds are found to be systemic only during turbulent periods. Altogether, the contribution of shadow banking to systemic risk follows patterns of macroeconomic and financial distress and is at an all-time high during the COVID-19 period. In the second empirical chapter, we focus more narrowly but also in more depth on the subsample with the highest ΔCoVaR and estimate interconnectedness using a Toda and Yamamoto Granger causality analysis. The level of interconnectedness in shadow banking is high, and linkages reach a peak during COVID-19 showing the impact of the pandemic on the financial sector. Multi-asset funds are more interconnected than all other funds. However, money market funds have more inbound connections. Generally, multi-asset funds are significant transmitters and receivers of systemic risk whereas money market funds are receivers. In the last empirical chapter, we measure the relationship between the size of shadow banks and systemic risk using ordinary least square regressions (OLS) and quantile regression. We find a positive linear relationship between the size of shadow banks and systemic risk, and the linkages are pronounced among multi-asset funds, especially retail multi-asset funds sponsored by asset managers. There is no relationship between the size of fixed-income funds, funds-of-funds, and money market funds and systemic risk. The size of shadow banking institutions does not increase the marginal contribution to systemic risk. Overall, we conclude that shadow banking contributes to systemic risk in South Africa. Among the shadow banking entities, multi-asset funds are the largest contributors to systemic risk, and money market funds are more systemic during turbulent periods. Notably, systemic risk and interconnectedness increase during periods of shocks, reaching an all-time high during the COVID-19 pandemic. Our results also confirm the relationship between the size of shadow banks and systemic risk, with the relationship being stronger for retail multi-asset funds sponsored by asset managers. The regulatory implications of our results point to the need for the regulator to strengthen macroprudential regulation of shadow banking to prevent and manage systemic risk.
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    A three-stage DEA analysis and a black-box approach of the performance of commercial banks in Ghana : an evaluation of efficiency, competition and profitability
    (Stellenbosch : Stellenbosch University, 2024-12) Oku, Barbara Naa Ayeley; Stellenbosch University. Faculty of Economic and Management Sciences. University of Stellenbosch Business School.; Aziakpono, Meshach
    ENGLISH SUMMARY: This thesis measures the efficiency of banks, ascertains the determinants of bank efficiency, and evaluates the relationship between efficiency, competition, and profitability of 18 commercial banks in Ghana from 2008 to 2019. The first empirical paper estimates and compares efficiency scores using both the black-box and the three-stage dynamic network DEA models. Both models incorporate a slack variable and bootstrap technique, with the dynamic network DEA model measuring efficiency of the deposit mobilisation, intermediation and revenue generation activities of banks in Ghana. The results show that commercial banks in Ghana are inefficient, with efficiency scores estimated by the dynamic network model being significantly lower than scores measured by the black-box model. The commercial banks are also most efficient in intermediation and least efficient in revenue generation. The second empirical chapter uses both the truncated bootstrap and the Tobit regression models to determine the impact of internal and external factors on the efficiency scores measured by the three-stage network dynamic DEA model. Results show that Capital Adequacy Ratio (CAR) and Non-Performing Loans (NPL) ratio have a significant negative impact on production and intermediation efficiencies while liquidity ratio has a negative and positive impact on production and intermediation efficiencies respectively. Inflation rate also has a negative effect on production efficiency and size, a significant positive impact on both production and intermediation efficiencies. ROA, OC/OI and inflation rate positively affects the revenue generation processes of commercial banks assessed, while foreign ownership is seen to be detrimental to revenue generation. To ascertain the impact of competition on bank efficiency, the Boone indicator is used to measure competition. Banks in Ghana are competitive for all the years assessed using the Boone Indicator and when regressed on the efficiency types, the study observed a positive association between competition and all the types of efficiencies measured. The positive relationship between revenue generation efficiency and competition however does not yield a significant observation, indicating a lower persistence in profits across the industry as banks are unable to earn abnormal profits. The final empirical chapter uses both the efficiency– profitability matrix and the GMM regression model to assess the impact of the efficiency scores on profitability measures (ROA and ROE). Using the GMM model, all three efficiency types largely have positive impacts on both ROA and Return on Equity (ROE). The study also found that foreign ownership has a significant impact on ROA, while liquidity ratio and competition have a negative and a positive impact on ROE respectively. With the efficiency– profitability matrix, foreign-owned banks are largely classified in the high profitability, high-efficiency quadrant (Stars or Lucky), while domestic banks were mostly categorised under the low profitability, low-efficiency quadrant (Unlucky or Underdogs).
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    Essays on remittances, welfare and productivity of agricultural households in selected sub-Saharan African countries
    (Stellenbosch : Stellenbosch University, 2023-12) Eghan, Mark; Adjasi, Charles Komla; Stellenbosch University. Faculty of Economic and Management Sciences. University of Stellenbosch Business School.
    ENGLISH SUMMARY: The study assesses the impact of remittance flows on the productivity and welfare of agricultural households in sub-Saharan Africa. The thesis is organised into three empirical essays. The first empirical essay tests the impact of remittance receipts on agricultural productivity in Ghana. Using propensity score matching (PSM) methods it assesses whether heterogeneity in the economic activity of farming households affects the effects of remittances on the productivity of tradable and non-tradable crop farming households in Ghana. We find that, the involvement of farming households in other economic activities alters the impact of remittances on crop yield. This differential impact also varies according to whether the crop is tradeable or not. The second essay answers the question: What is the distributional effect of remittances on household welfare in The Gambia? We examine this question with an instrumental variable quantile regression approach to estimate the distributional welfare effect of remittances in The Gambia. After instrumenting for the endogenous remittance variable in the model and controlling for household demographic characteristics, the paper finds that the effect of remittance on household welfare is positive and significant; however, the effect is not uniform across the income quantiles. We find that rich households receiving remittances have greater welfare impacts than low-income households receiving remittances. Even though remittances have a higher welfare impact on rich households, the impact of a 10.12% increase in the welfare of low-income households is substantial. This suggests the possibility that remittances can be an enabling channel for low-income households to migrate to middle income status. The third essay estimates the impact of remittances on vulnerability to expected poverty among agricultural households in Ghana, Nigeria and The Gambia. We found that households that benefitted from remittances in all three countries could smoothing consumption to reduce their vulnerability to expected poverty and therefore guard against future poverty. In addition, although urban households were less vulnerable than rural households to expected poverty, rural households that received remittances became less vulnerable to expected poverty. This underscores the importance of remittances in enhancing the welfare of poorer households. The overall conclusion of the study is that remittances provide non-labour income that helps to improve the welfare of agricultural households, reduce poverty levels and reduce the vulnerability of agricultural households to expected poverty. These positive effects of remittances are more on poorer households. Since agricultural households are generally among the poor and vulnerable population in SSA, the results show that remittance helps to reduce the poverty and vulnerability to poverty among the poor of the poor. It is recommended that governments in sub-Saharan Africa put in place policies that ensure a reduction in the cost of sending remittances especially to rural farming households as an indirect way of reducing vulnerability to expected poverty.
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    From corporate social responsibility to brand activism and the effect on customer loyalty : a structural equation modelling approach
    (Stellenbosch : Stellenbosch University, 2023-03) Welser, Carolin; Terblanche-Smit, Marlize; Stellenbosch University. Faculty of Economic and Management Sciences. University of Stellenbosch Business School.
    ENGLISH SUMMARY: Increasingly multinational companies are making statements related to socio-political topics. This phenomenon is called brand activism and augments the concept of Corporate Social Responsibility (CSR). Therefore, it has the potential to direct a wider variety of socio-economic issues. Brand activism implementation causes negative and positive customer reactions. It is a challenge for companies to implement brand activism and predict the impact on customers. Existing literature lacks a robust theoretical body for brand activism. The effects of brand activism on customers are unclear, and there is no valid measurement model. This thesis aimed to understand the phenomenon of brand activism by identifying brand activism as an evolution of the concept of CSR and measuring the quantitative effect on customer loyalty. Therefore, brand activism was differentiated from CSR and implementation guidelines were inferred. A positive impact of progressive brand activism on customer loyalty was anticipated. Based on an in-depth literature review, this positive relationship was ascertained and observed by developing a measurement model to discover the impact of brand activism on customer loyalty. Thereof six brand activism dimensions, namely social, legal, workplace, economic, political, and environmental, were tested regarding the impact on customer loyalty and the effects of the six brand activism dimensions. The impact of brand activism on customers’ legitimacy and authenticity perceptions was uncovered. Customers’ expectations were compared to the measured effect on customer loyalty to make assumptions about the optimal implementation of brand activism. An experimental method utilising a survey with 372 respondents from South Africa, divided into six experimental groups and one control group, was applied. The survey targeted the Millennial generation (Generation Y). Millennials were selected as the unit of analysis as they have greater expectations regarding the socio-political activities of corporations than previous generations. The sample size was determined by applying a statistical power analysis. The experiment constituted six different treatments, including examples from the automotive brand Volkswagen in South Africa. Analysis of Variance was executed, and a structural equation model (SEM) was developed and applied. The SEM included three mediating variables, brand trust, customer-company identification, and brand image, besides the independent variable, brand activism, and the dependent variable, customer loyalty. The study reported an overall positive relationship between brand activism and customer loyalty. The variance analysis did not report significant results. Customer-company identification was the only mediating variable within the SEM reporting a high significance towards customer loyalty. Respondents perceived environmental brand activism as the most important dimension. Customers’ expectation regarding brand activism implementation was higher than the measured customer loyalty. Implementing brand activism was perceived more in an authentic manner than a legitimate one. This research suggests that brand activism as a concept should be implemented complementary to CSR. The relationship between brand activism and customer loyalty is based on the social identity theory. Therefore, customer identification with the company was the strongest predictor of loyalty within this relationship. An expectation-behaviour gap was suggested as customers’ expectations towards the company were higher than their actual remuneration with loyal behaviour. A customer grid model to minimise the cognitive dissonance of customers is proposed for implementation. Overall, this research contributes to the field of strategic marketing and consumer behaviour. In terms of qualitative contribution, this thesis adds to CSR, brand activism, and customer loyalty research. A theoretical basis of the brand activism phenomenon is developed, and a strategic brand activism framework is implemented. The quantitative contribution of the study is a measurement model for testing the relationship between brand activism and customer loyalty and the results of the applied experimental study. The practical contribution of this research is the developed loyalty grid model, loyalty stage process, and overall recommendations based on qualitative and quantitative findings.