Adefemi A. Obalade

This study examines the adaptive behavior of South African Rand (ZAR) exchange rate against its major trading partners, the US Dollar (USD) and the Chinese Yuan (CNY) over the period 1999-2020. The study uses a rolling parametric linear variance ratio (VR) test, nonparametric linear runs test, and non-linear Brock, Dechert and Scheinkman (BDS) test to determine time-varying predictability and regression analyses to assess the effect of market conditions. The results show that the foreign exchange market was found to be inefficient based on the VR tests, but efficient with very few windows of inefficiency based on the runs test and BDS test. In addition, apart from the GDP, none of the market conditions studied is associated with non-parametric linear and nonlinear predictabilities. The study draws two main conclusions. Firstly, the South African foreign exchange market is adaptively efficient. Secondly, foreign exchange market efficiency is primarily driven by the level of economic growth. Practically, it will be difficult for investors to exploit the few windows of predictability in the South African foreign exchange market by focusing mainly on the market conditions studied.

Political risk is prevalent in Nigeria and tends to influence business outcomes and the stability of the banking system. As a result of this study, it was determined whether political risk matters to the performance of the banking sector in Nigeria. The effect of political risk on different banks’ performance measures, such as return on assets, return on invested capital, credit risk and stock price, were examined in a panel of 12 selected commercial banks for the period 2006–2018. Data was analyzed using a two-stage system of generalized method of moments. The results provided evidence that the effect of political risk on bank performance depends on the performance proxies. Specifically, political risk was found to be negatively related to banks’ returns on invested capital and positively related to deteriorating credit risk. Hence, it can be concluded that political risk induces poor banking system performance in Nigeria. The study provides a critical insight into the management of a country’s political systems in terms of their potential to create unfavorable conditions for banking systems to thrive.

The focus of this study was to assess the contribution of Electronic Fiscal Devices (EFDs) to ensuring tax compliance among small business owners in the Arusha Region in Tanzania. The study was motivated by the fact that the government of Tanzania has invested effort and funds to ensure that revenue adequately supports development projects. Regardless of effort, there is continued reliance on external sources of funds to support development projects. This poses a question on how the introduction of EFDs would increase tax compliance and eventually impact the government income for development projects. The main objective of the study was to determine whether the rate of using EFDs, the level of transparency, fairness in tax procedures, and the perceived audit effectiveness affect the level of tax compliance. Data was analyzed using descriptive procedures, One Way ANOVA, Chi-Square, and ordinal regression. Findings of the study are as follows: First, fairness in tax procedures, the perceived level of transparency and the rate of EFD use had no impact on the level of tax compliance; second, business and EFD use experience, audit effectiveness, and the use of EFDs in tax audits have impacted tax compliance. The study recommends other government departments to consider adopting relevant technology in operational areas where transparency, fairness and compliance are required. The inclusion of other sectors not currently captured by EFD use will be a step in the right direction.

Workplace deviance is one of the significant problems in Nigerian public universities. This study aims to investigate the impact of HEXACO personality factors (honesty-humility, emotionality, and agreeableness (H-HEA)) on deviant workplace behavior in public universities in Southwestern Nigeria. The choice of the institutions (Ekiti State University, University of Lagos, and the Federal University of Akure) in the Southwestern region was based on purposive sampling. Simple random sampling was employed to select academic and non-academic staff. The study adopted a quantitative research design and employed Pearson correlation and multiple regression analysis to analyze and test the hypotheses. The findings revealed that the H-HEA domain of personality traits negatively correlates with organizational and interpersonal deviance. Secondly, H-HEA personality traits have a negative effect on organizational and interpersonal deviance. Overall, the results of the regression analyses suggest that the H-HEA HEXACO domains of personality traits individually reduces the organizational and interpersonal forms of deviance. Based on the findings, the human resource departments of these institutions can curb workplace deviance by giving preference to candidates or individuals with high scores in H-HAE personality traits. This will go a long way in curtailing the vices of workplace deviance in Southwestern Nigeria public universities.

Financial statements are often number intensive, and determining the importance and relevance of these numbers from the perspective of investors and equity holders is paramount. However, empirical studies concerning the correlation between several accounting and economic-based indicators with shareholder returns have yielded contradictory results. Additionally, considering the relatively limited studies on economic-based indicators such as refined economic value-added and economic value-added momentum, this study evaluated the predictive power of refined economic value added, economic value-added momentum, and economic value added (economic-based indicators), along with traditional accounting-based indicators such as return on equity and earnings per share on the shareholders' returns. The study employed fixed-effect instrumental variable regression and panel quantile regression techniques to examine 49 non-financial companies listed on the Johannesburg Stock Exchange from 2007 to 2021. Overall, the results showed that economic value added is a significant negative predictor of shareholder returns, while refined economic value-added is a positive determinant. In addition, the refined economic value-added coefficient remains positive, with the impact increasing across the conditional quantiles. This study concludes that refined economic value-added provides a superior and realistic determinant of shareholder value on the Johannesburg Stock Exchange compared to other measures.

The paper aims to explore the determinants of total volatility connectedness of nine super sectors on the Johannesburg Stock Exchange (JSE) market from 3rd January 2006 to 31st December 2021. These sectors are Automobile and Parts, Chemical, Telecommunication, Technology, Energy, Health, Finance, Insurance, and General Industrials. The paper applied Diebold and Yilmaz connectedness matrix and the time-varying parameter – vector autoregressive (TVP-VAR) model to determine the sectorial total volatility connectedness index (STVCI). After that, the nonlinear autoregressive distributed lag model (NARDL) was used to determine the asymmetric effects and the drivers of STVCI. It was found that the partial sum decomposition of the South African volatility index (SAVI) and Economic Policy Uncertainty Index (EPU) are the key determinants of the STVCI both in the long and short run. However, domestic market return (DMR) shows no significant asymmetric effect on STVCI. The study concluded that SAVI and EPU are the key determinants of volatility connectedness among the JSE super-sectors. The results unveil important implications for sectorial investors and policymakers on potential regulations and stability of the significant determinants of spillover risk.

Securitization has been used as a tool for bank funding, liquidity, risk management, and performance for over two decades. However, securitization activities were negatively affected by the recent financial crises, which led to stricter regulations of banks’ off-balance-sheet activities. This study examined the possible impacts of the Basel IV capital requirements on securitization activities and the performance of commercial banks in South Africa if implemented. The study used aggregated financial data of selected South African commercial banks to create a sample representative projection as if the selected banks had implemented the Basel IV capital requirements between 2002 and 2018. The simulated data were analyzed and compared to Basel III data using panel data analysis under certain assumptions, while other conditions held constant. The results revealed that the implementation of the Basel IV capital requirements will have a significant positive impact on securitization activities of commercial banks in South Africa. However, higher capital requirements of Basel IV may have no significant impact on performance of securitizing banks but it can protect banks from securitization exposure.