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Assessing the impact of fiscal policy on economic growth in South Africa. DOI: https://doi.org/10.31920/1750-4562/2019/v14n1a1
Bongumusa Prince Makhoba, Irrshad Kaseeram & Lorraine Greyling7
The study analysed the impact of fiscal policy on economic growth in South Africa, using the annual time series data from 1960-2017. The study employed Johansen VECM approach to examine the short-run and long-run relationship between fiscal policy variables and economic growth. The economic variables for empirical investigation include government expenditure, revenues, public debt, gross fixed capital formation, and economic growth. The empirical findings show that government revenues and gross fixed capital formation have a significant positive long-run impact on economic growth in South Africa. While government expenditure and public debt share a negative long-run relationship with economic growth, the government expenditure has been growing at a higher pace than revenues. The study proposes that policymakers ought to formulate prudent fiscal policies that encourage gross fixed capital formation which would have a direct impact on tax revenues, reduce public deficit and debt, and ultimately improve economic growth.
Activity theorists posit that people get happy when they engage in activities they love doing. Generation Y (Gen Y) females love shopping. So, contrary to the notion that symbolic money attitudes and compulsive buying are bad, I investigated whether any dimension of happiness is gained from achievement and status money attitudes and compulsive spending and shopping among Gen Y females. The participants were 458 female Gen Y South-Africans (Blacks =55.5%, Coloureds = 31.4%; Whites = 3.5%; Indians = 9.6%; age between 18 and 35). Respondents were surveyed in two large universities in Cape Town and Durban to capture all racial groups. Structural equation modelling results revealed that high achievement and status symbolic money attitudes were associated with lower cognitive and affective happiness; and with higher compulsive shopping and spending. While affective happiness was positively associated with compulsive shopping, compulsive spending was bad for happiness among the young adults.
This paper employs the WITS-SMART simulation model to examine the welfare effects of economic integration in the TFTA region. The results indicate that welfare gains are skewed, and some countries and economic sectors are poised to gain more than others. Ceteris paribus, there is a proclivity for larger economies to benefit more than smaller economies, and also, restricted economies are likely to have more trade creation than already liberalised countries. The results also indicate that trade in the manufacturing sector and consumer goods will contribute the most, while the petroleum sector will contribute the least. Finally, countries pursing restrictive policies will experience greater customs revenue loss than liberalised ones. The study concludes that assistance should be given to negatively affected countries and economic sectors to minimise the polarisation of benefits.
This study examines manufacturing firms’ output in relation to market capitalization and bank credit in Nigeria using co-integration and vector error correction from 1986 to 2016. The result reveals long run equilibrium relationships between market capitalization, bank credit, and manufacturing firm output. It was discovered that BAC (-1) has an inverse relationship with manufacturing firm output, however, MAO(-1), MCA(-1), RGDP(-1), REXR(-1) and RINR(-1) had a direct relationship with manufacturing firms’ output. It was also discovered that MAO (-1) and BAC(-1) have an inverse relationship with market capitalization. The stability test conducted established that the model can be used for policy formation and implementation in Nigeria. Therefore, the study concludes by highlighting the need for better access to stock market to enhance the quality of market capitalization. Also, bank credits must be correctly channelled towards enhancing the growth of manufacturing firms’ output.
The study investigated the relationship between occupational stress, organisational citizenship behaviour, psychological capital and emotional intelligence, using the correlational cross-sectional (survey) research design, stratified, purposive and convenience sampling techniques to select a sample of 1532 male and female graduate employees from the various sectors of the Nigerian economy. A structured and validated questionnaire was used to collect data from the participants. The data collected was analysed using Pearson’s correlation coefficient. The results showed that there is a weak but positive relationship between occupational stress and organisational citizenship behaviour; a significant positive relationship between occupational stress and psychological capital; a weak but positive relationship between occupational stress and emotional intelligence; a significant positive relationship between organisational citizenship behaviour and psychological capital; a significant positive relationship between organisational citizenship behaviour and emotional intelligence; and a significant positive relationship between psychological capital and emotional intelligence. The hypothesized relationship between the four variables under consideration was confirmed. The researcher thereafter, recommended that action research should be conducted in this area of study.
The sugar industry in South Africa is marred by a low level of employee engagement and productivity. There is no conclusive evidence linking the level of employee engagement to productivity, however, low levels of engagement have been suggested as a factor that causes low level of productivity. This article evaluates factors affecting employee engagement and its relationship to productivity. A quantitative research method (with descriptive and inferential statistical analysis techniques) was utilised at 73 sugar factory employees in KwaZulu-Natal Province, South Africa. The findings indicated that the sugar manufacturer in this study had relatively engaged employees. The main factors affecting their engagement were the personal feelings of employees, their work environment, communication, the leadership style, and their commitment. Additionally, there was a significant relationship between employee engagement and their productivity. If the manufacturer wants improvement in productivity, there needs to be improvement in employee engagement through the enhancement of their job satisfaction and instilling a sense of pride in the organisation. The leadership of the organisation could achieve this by devising a Human Resource (HR) strategy that encourages employee communication, interaction with the management and improving their workplace environments.
This paper sought to identify the effect of business environment on firms’ decisions to evade taxes in Ghana. Employing the Tobit method of estimation on World Bank Enterprise Survey data, the results revealed that business environment affects firms’ tax evasion decisions. In specifics, corruption of tax officials and public infrastructure (electricity outage) has a positive effect on tax evasion while quality of legal environment has a negative effect on firms’ decisions to evade taxes. Also, the results indicated that the type of firm, age and sex of the owner affects tax evasion decisions. Finally, business constraints in the form of tax rate, access to business license and transport has positive effect on firms’ tax evasion decisions. The paper recommends the need to improve the business environment to boost firms’ growth while reducing tax evasion
The objective of this paper was to examine the perspectives of the preparers of Corporate Annual Reports being Finance Directors of top-listed South African companies on the disclosure of decision-useful information on Human Capital. Using existing literature, a total of 91 Human Capital Disclosure items was developed which formed the basis of survey questionnaire. This questionnaire was utilised to determine whether or not the Human Capital Disclosure items were considered and included in their Corporate Annual Reports. For the purpose of cross-checking data, a content analysis of the Corporate Annual Reports produced by relevant companies was also carried out. Our findings reveal that the majority of Human Capital disclosure items were not reflected in the Corporate Annual Reports even though the financial directors had indicated that these were important on the survey. We therefore argue that the claims as indicated by the results of the survey by the finance directors that employees are their most important asset could not be substantiated by adequate disclosure of decision-useful information on Human Capital in their Corporate Annual Reports. The implication of the non-disclosure of this information is that it could limit its usefulness to the users of Corporate Annual Reports
The growing prominence of globalisation no doubt has altered the functions and activities of major labour markets across the globe, Nigeria inclusive, with antecedent structural changes for the world of work. This article assesses how these changes have engendered different patterns of labour casualisation and stimulated the degree of challenges for both the working people and the beverage sector labour union. The premise of the article is anchored on the Neo-liberal and Labour Market Segmentation Theories. The article employs a qualitative case study research design, to unearth in-depth responses through a purposive sampling of trade union leaders. The semi-structured interview was employed and data were transcribed and summarized. The themes were also identified and analysed with a content analytical tool. The article argues that the patterns of non-standard work practices in the Nigerian beverage sector have somewhat nuance features from what is obtainable in other sectors of the economy. The result of this study reveals outsourced and contract employment as the two dominant non-standard employment practices, with various shades of work challenges for workers and the labour union. The article makes a case for the review of major Nigeria’s labour legislation for the incorporation of casual employment work practices, with the explicit narration of their terms of employment. This is as the Ministry of Labour and Employment is equally encouraged to effectively carry out its monitoring and inspection functions.
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