Department of Economics

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Job satisfaction and work ethics among the academic and non-academic staff: a comparison between a South African and Zimbabwean group
(University of Fort Hare, 2001-08) Mahembe, Bright
The work we do plays a dominant role in most people's lives. Our work not only occupies more of our time than any other single activity, but also provides the economic basis of our life-styles. It constitutes a central aspect of who we are, how we define ourselves as individuals. Given this importance, it should not be surprising that people hold strong beliefs towards their jobs. Job satisfaction can therefore be defined as the individual's cognitive, affective and evaluative reactions toward their jobs (Greenberg, J., Baron, A. (1993). In this chapter,· the research problem and aim of the study will be discussed.
A Comparative analysis of the determinants and behavior of investment demand between South Africa and Zimbabwe
(University of Fort Hare, 2007) Malumisa, Sambulo
The study investigates the determinants of private investment in South Africa and Zimbabwe employing annual data over the period 1980-2006. The focus is on Gross Domestic Product (GDP), Government Debt, Inflation, and interest rate policies. The data is subjected to stationarity and co integration tests, applied Vector Autoregressive and error correction models to estimate long- and short-run coefficients. The results suggest that GDP for both countries has a positive effect on private investment over the period of study. Government debt has a crowding out effect on private investment for Zimbabwe, for South Africa the effect is insignificant. Inflation for both countries negatively affects private investment. An interesting results supported data for developing countries is the positive relationship between interest rates and private investment.
An Empirical Analysis Of The Determinants and Growth of South African Exports
(University of Fort Hare, 2008-11) Choga, Ireen
Exports have considerable effects on economic growth, employment and trade so it is crucial to understand the factors that are responsible for their Variation. This study analyses the fundamental determinants of exports using annual South African data covering the period 1980 to 2006. It initially provides an overview of the South African export structure and export growth. A review of theoretical determinants is then specified. The study tests for stationarity and cointegration using the Johansen (1991, 1995) methodology. A vector error correction model is run to provide robust determinant variables on exports. The following variables which have been found to have a long run relationship with exports include: the domestic price of exports, real effective exchange rate, trade openness, foreign income and price of inputs (cost of production). The estimate of the speed of adjustment coefficient found in this study indicates that about 96% of the Variation in exports from its equilibrium level is corrected within one year. The results that have emerged from this analysis corroborate the theoretical predictions and are also supported by previous researchers or studies.
An Analysis of Casuality between Savings and Economic Growth in South Africa: (1980-2006)
(2008-11) Murombo, Takunda
The causal relationship between savings and economic growth has largely remained a debatable subject despite much research into this relationship. A number of recent empirical studies cast doubt on the unidirectional relationship using both time series and cross sectional data and have come up with different results supporting the possibility of bi-directional causal relationships. The literature has also suggested the relationship may differ from country to country.
Monetary policy, inflation, unemployment and the Phillips Curve in South Africa
(University of Fort Hare, 2009) Chicheke, Aaron
Inflation and unemployment are perhaps the two most important challenges that face the South African economy of today. Firstly, the study examines the relationship between monetary policy and the two economic fundamentals (inflation and unemployment), using the VEC modeling technique. The model regresses the monetary policy variable against inflation and unemployment growth over the period 1980-2008. The results suggest that (1) there is a long run relationship between inflation and unemployment (2) monetary policy reacts more to variations in inflation compared to variations in unemployment. Secondly, the relationship between inflation and unemployment as explained by the Phillips curve is investigated. The results show that there is a positive relationship between inflation and unemployment.
Profit incentives and technical efficiency in the provision of health care in Zimbabwe: an application of data envelopment analysis and econometric methods
(University of Fort Hare, 2009) Maredza, Andrew
This study examines issues surrounding efficiency in the Zimbabwean health sector with specific emphasis on for-profit hospitals in order to find out whether they are significantly more efficient than non-profit hospitals. The study attempts to explore the significance of profit incentives on efficiency. This study uses the Data Envelopment Analysis (DEA) methodology to examine hospital efficiency scores for the 100 hospitals in the sample classified as for-profit, mission and public. Outputs of the study include inpatient days and outpatient visits. The number of beds, doctors and nurses were used to capture hospital inputs. The findings indicated that there was a marked deviation of efficiency scores from the best practice frontier with for-profit hospitals having the highest mean PTE of 71.1%. The mean PTE scores for mission and public hospitals were 64.8% and 62.6% respectively. About 85 %, 83 % and 91 % of the for-profit, mission and public hospitals were found to be operating below their average PTE. More than half of the hospitals are being run inefficiently. Of more importance to this study is the fact that the hypothesis of for-profit hospital superiority was accepted implying that for profit hospitals are significantly more efficient than the non-profit category. The study indicated that the amount of inputs being used could be decreased substantially without decreasing the quantity of outputs achieved. In each of the hospitals included in the study, the total input reductions needed to make inefficient hospitals efficient are more than 50%. These input savings could go a long way in achieving other health concerns without mobilizing additional resources in the sector.
An empirical investigation of the balance sheet channel of monetary policy transmission in South Africa
(University of Fort Hare, 2009-12) Mudita, Kelvin
The intention of this study is to outline an empirical framework of the balance sheet channel of monetary policy transmission in South Africa. Specifically, this study examines how monetary policy decisions are transmitted, through the balance sheet of business firms, to the real economy. The study is motivated by the fact that credit has now occupied an important role in the funding of new capital investment in South Africa. Thus, the balance sheet channel may become a relevant channel in the monetary policy transmission process.
Does wage inflation cause price inflation in Zimbabwe(1970-2008)
(University of Fort Hare, 2010) Nyamazuzu, Zvikomborero
There has been much debate in literature on the direction of causality between price inflation and wage inflation. The Johansen procedure suggests that wage growth and price inflation are cointegration. Variables used in this study are real interest rates, money supply growth, real wages, productivity, real exchange rate and price inflation. This study employs an Error Correction Model (ECM) together with the Granger causality test to examine the causal relationship which is presumed to exist between these two variables. The empirical findings of the study show that (i) there is a long run relationship between price inflation and wage growth and (ii) there is bidirectional causality between inflation and wage growth. This shows that there is both cost push and demand pull inflation in Zimbabwe. Results
The global financial crisis and its impact on the South African economy
(University of Fort Hare, 2010) Madubeko, Vongai
This dissertation investigates the effects of the financial crisis on the South African economy. In order to do this, an index which describes the financial conditions of the South African economy is constructed and computed. The index indicates that domestic South African financial conditions have deteriorated substantially during the period under study and so the study investigates how this has impacted on the country’s economic growth. A VAR model with South African variables is specified and used to assess the quantitative effects of the financial crisis on South African real GDP growth. Results suggest that the South African economy was not significantly affected by the crisis, but economic growth was slowed down and may still grow substantially slower in the next few years due to the financial crisis. These results corroborate the theoretical predictions and are also supported by previous studies.
Power and Knowledge in the Implementation of the Great Limpopo Transfrontier Conservation Area: The Case of Sengwe in Zimbabwe.
(University of Fort Hare, 2010-01) Sibanda, Manasa
In this thesis I investigate power relations among various actors in Transboundary Natural Resource Management (TBNRM) settings. I look at their effects in relation to control over and access to resources, local farming and conservation practices and on the livelihoods of local people. I focus on the Great Limpopo Transfrontier Conservation Area (GLTFCA) and on the Sengwe prefecture in particular, part of which is a contested area that is designated as a wildlife-corridor (which I refer to as the Corridor). This, small but vital component of the park links Zimbabwe with the rest of the conservation area. While not much research has been done there the effects of the initiative bring about a total transformation to the livelihoods of approximately 5000 local people. When this Corridor was introduced in 2000, legislation required a total displacement of the human settlement. Almost a decade after its establishment land for relocation has not been set aside, nor have any compensatory plans been put in place.
Investigating the impact of capital account liberation on economic growth: A study of South Africa
(University of Fort Hare, 2011) Khumalo, Sibanisezwe Alwyn
Abstract The increased interest in capital flows has made it imperative to understand how they impact a particular economy. The Global drive for an interlinked world economy has increased the need for monetary authorities and Governments to able to effectively deal with any negative spins off from capital flows and also be able to take advantage of positive effects capital flows may have on an economy. The study seeks to understand how the change to lift restrictions on capital flows into the South African economy may have impacted on economic growth.
The economic impact of HIV and AIDS in South Africa.
(University of Fort Hare, 2011) Makhetha, Palesa
The SADC region has felt the impact of HIV/AIDS more than any other region in sub-Saharan Africa and the world. South Africa is the home of the largest number of people living with HIV/AIDS in the world. Historically, South Africa is one the countries that had a very disorderly past and this history is relevant to the explosive spread of HIV/AIDS in the region. The first cases of HIV were diagnosed in 1982 and that is when the first death from this disease was recorded. In 2004 over 5 million people out of a total 46 million South Africans were HIV positive, giving a total prevalence rate of 11%. HIV/AIDS has affected societies in many ways. Individuals, households and enterprises have all been affected by the pandemic. For individuals, incomes are lost as a result of HIV/AIDS. When individuals fall sick due to the disease, they loose their jobs and incomes. In most cases, these individuals are breadwinners in their households. The available money is then spent on medical services at the expense of other household investments. For example, the loss of a breadwinner inevitably affects rural households investments on farm inputs such as fertiliser, seeds etc. The result is low agricultural output and thus poverty. Dependent members of the households suffer immensely from the loss of income. Those at school are likely to drop out. When children drop out of school, they are more likely to be unemployed or underemployed. This makes them more vulnerable to being poor and other vices, such as crime or even HIV/AIDS. Poverty is another social and health issue that has a two-way relationship with HIV/Aids. Poverty increases individuals’ vulnerability to HIV/AIDS especially for females. Through its impact on productivity and loss of life of the economically productive members of the society, the disease condemns many to poverty. Households affected by the disease, are poorer than non-affected households.
The determinants of demand for public transport in South Africa
(University of Fort Hare, 2011-10) Seleng, Tshegofatso Priscilla
This study analyses the determinants of demand for public transport in South Africa, using quarterly data covering the period from 1990-2009. The study initially provides an overview of the South African public transport system and population trends. Based on the review of the theoretical and empirical literature on transport, the study specifies a model of public transport demand in South Africa. Tests for stationarity and unit roots in the series (both informal and formal tests), and co-integration test have been performed. The co-integration test is done using the Johansen (1990, 1995) methodology. A vector error correction model is run to provide robust determinant variables on public transport. The results revealed that in the short run, the demand for public transport depends positively and significantly on GDP per capita growth and negatively on prices for public transport and fuel prices. However, over the long run, the demand for public transport depends negatively on GDP per capita growth as expected, but positively on the other variables including the growth in employment levels.
The contribution of the motor industry to the South African economy
(University of Fort Hare, 2011-12) Tyatya, Khanya
The automobile industry in South Africa consists of the vehicle production sector and the components sector. The vehicle manufacturing sector includes Original Equipment Manufacturers (OEM) or vehicle assemblers. Four OEM's are based in the Eastern Cape namely Volkswagen, Daimler Chrysler, Ford Motor Company and General Motors with rest spread across Gauteng (Nissan & BMW) and Kwa-Zulu Natal (Toyota). A number of component suppliers support these OEM's. About 40% of South Africa's vehicle output comes from the Eastern Cape maintaining the country's position as an automotive competitor in Africa and the world (Department of Trade and Industry, 2009).
The Relationship between Exports and Economic Growth: An Empirical Case Study of the South Africa Auto Mobile Industry
(University of Fort Hare, 2012-03-25) Taylo, Nani-Mari
The dissertation investigates the relationship between automobile exports and economic growth in South Africa. Given the amount of investment and government assistance that has gone into assisting and developing the South African automobile industry via the Motor Industry Development Programme, this study examines whether the increase in automobile exports has impacted on economic growth. A demand-side model of the Export-Led Growth hypothesis is estimated in order to analyse the magnitude of the impact of automobile exports on growth. The results of the VECM and Dynamic Granger Causality test reveal that vehicle exports have a long-run positive impact on economic growth and that a uni-directional causal relationship is found to run from vehicle exports to economic growth. Even though vehicle exports are found to have a relatively significant impact on economic growth, domestic demand factors are concluded as being the key contributor of economic growth in South Africa.
The impact of oil price volatility on economic growth in South Africa : a cointegration approach
(University of Fort Hare, 2013) Matekenya, Weliswa; Hompashe, D
Oil is an essential commodity in the South African economy and a source of energy that is used for electricity generation, heating, and cooking. It is vital for the transportation system on which the very livelihood of the economy depends. 14% of South African primary energy needs are met by oil while 95% of crude oil is imported, primarily, from Saudi Arabia and Iran. This study investigates the impact of oil price volatility on economic growth in South Africa from 1994Q1-2010Q4. The study employs the VECM and shows that there exists both a long run and short run relationship between the following variables: crude oil price, GDP, gross fixed investment, real interest rate and real exchange rate. In a long-run analysis there is a positive relationship between oil price and GDP while there is negative relationship in the short-run. The study also shows that, as an oil importing country, South Africa‟s economic growth depends on imported oil which makes the country vulnerable to oil price shocks. Based on the findings of this study it is recommended that policy interventions should include both monetary and fiscal policies. It is in this regard that promoting a regional integration in order to reduce oil dependence, by optimizing electricity supplies across the region, is essential. This will improve efficiency and, owing to economies of scale, lower generation costs.
Factors influencing market orientation in SME computer retailers in the buffalo city metropolitan municipality, South Africa.
(University of Fort Hare, 2013) Moyo, Hazel Nobandile
Despite the significant contribution to socio-economic development by SMEs (small and medium enterprises), their failure rate is very high in South Africa. Adoption and implementation of market orientation has been identified by various scholars as a means to mitigate SME failure in the highly competitive environments they operate in. This study investigated the factors influencing market orientation in SME computer retailers in King Williams Town and East London, South Africa. The objectives of the study were to investigate whether owner/manager involvement of had an influence on market orientation in SME computer retailers, to establish whether organisational systems and interdepartmental dynamics had an impact on the customer focused culture as well as investigate whether competitive intensity influenced the SME computer retailers to be market focused. Both primary and secondary data sources were used in this study. A quantitative research design was used in conducting this research. Simple random sampling, a probability sampling technique was used to select a sample of 104 from the sample frame of 141 registered SME computer retailers. The survey method, by way of a self-administered questionnaire was used to collect primary data. The statistical Package for Social Sciences (SPSS) as statistical software was used to analyse data. The Chi-square test, Pearson correlation, the t-test, and descriptive statistics were used to analyse data. The findings of this research found that there are factors influencing market orientation in SME computer retailers, such as owner/manager involvement. Competitive intensity was found to influence SME computer retailers to be market focused. It was also found that organisational systems and interdepartmental dynamics did not impact on the customer focused culture. The findings of this research showed that SME owner/managers hold the key to shaping an organisation‟s values and culture orientation therefore in order to be market orientated, they need pass on a clear message to the lower levels of the organisation. The careful implementation of organisational systems and interdepartmental dynamics that encourage market orientation as well as constant matching and monitoring of competitors was recommended to enable SMEs to be market orientated and in turn improve their business performance and success.
Econometric analysis of labour demand in the South African textiles, clothing and footwear manufacturing sector: 1990-2012.
(University of Fort Hare, 2013) Chikwanha, Tafadzwa R
South Africa in its quest for socio-economic improvement still faces the problem of persistent unemployment. Unemployment in South Africa is very intricate and therefore makes it a complex challenge to tackle for policy makers. Differing unemployment phenomena exist in different sectors of the economy. Some sectors are facing employment growth while others are declining. This study examines the possible major determinants of labour demand (employment) in the textiles, clothing and footwear manufacturing sector in South Africa. The study is based on semi-annual time series data from 1990 to 2012. The Johansen (1991) model is used to examine the trends. The model is an error correction model imposed upon a vector autoregressive model. The results obtained showed that wages and imports both have negative relationships with the demand for workers. Based on these two important results, policy recommendations were made. The study recommended the introduction of a sector-based wage subsidy. The wage structure in South Africa is a perpetually problematic factor of the labour market and therefore a significant determinant in the viability of business and investment. Secondly, the import structure on textiles, clothing and footwear is not clearly and thoroughly setup. A complete restructuring of import tariffs on the entire sector is suggested.
Financial structure and economic growth nexus: comparisons of banks, financial markets and economic growth in South Africa
(University of Fort Hare, 2013) Godza, Praise; Makhetha-Kosi, P
The importance of the financial structure system, which comprises the banking sector and financial markets, to the growth of a country’s economy cannot be underestimated. It is important to analyse comparatively the contribution of each sector to the economic growth of a country. This study, therefore, empirically examined the relationship between financial markets, banks and economic growth in South Africa using time series analysis for the period 1990 to 2011. The study used the Vector Error Correction model (VECM) based causality tests to establish the link between financial structure (represented by both banks and financial markets) and economic growth. Real GDP was used as a measure for economic growth, Bank credit to the private sector was used as a proxy for the banking system, turnover ratio and value of shares traded was used as a measure for the stock market and bond market capitalisation was used as a measure for the bond market. To determine the net effects of financial structure on long run growth in South Africa, one control variable was added which was the ratio of government expenditure to GDP to control for the government’s role in the economy. The Johansen co-integration technique was also employed to obtain a long run relationship. The results from the study revealed that the stock turnover ratio, bond market capitalisation, and government expenditure have a long run relationship with economic growth while bank credit to private sector and value of shares traded showed a negative relationship with economic growth. With granger causality all the variables proved to granger cause economic growth except for bond market capitalisation where economic growth prove to granger cause bond market development. The study recommended that measures to improve liquidity, transparency and accessibility of both the banking sector and financial markets instruments should be a priority for South African authorities. The authorities should, therefore, encourage stock market development through an appropriate mix of taxes, legal and regulatory policies to remove barriers to stock market operations and thus enhance their efficiency since stock markets in Africa are underdeveloped. Strong financial regulation and supervision in banks to ensure efficiency in credit allocation should be done to enable channelling of credits to capital development rather than consumption spending.
The effect of real exchange rate volatility on export performance: evidence from south africa (2000-2011).
(University of Fort Hare, 2014) Chamunorwa, Wilson
This study sought to investigate the relationship between exchange rate volatility and export performance in South Africa. The main objective of the study was to examine the impact of exchange rate volatility on export performance in South Africa. This relationship was examined using GARCH methods. Exports were regressed against real effective exchange rate, trade openness and capacity utilisation. The research aimed to establish whether exchange rate volatility impacts negatively on export performance in the manner suggested by the econometric model. The result obtained showed that exchange rate volatility had a significantly negative effect on South African exports in the period 2000-2011.

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