Microeconomic Competitiveness And Post-Conflict Reconstruction: Firm-Level Evidence From Zimbabwe

This paper examines the micro-level factors that constrain Zimbabwean firms in the country’s post-conflict environment. An analysis was conducted into what Zimbabwean firms see as their most debilitating obstacle to achieving higher levels of competitiveness. Among the findings was that so-called non-politically constrained firms face many challenges in their day-to-day operations, which often points to internal strategic and operational shortcomings. Politically constrained firms, on the other hand, have progressed to a stage where their internal systems are in good shape, but their future vision and goals are potentially threatened by the unstable political situation in the country. This creates uncertainty, which can impact negatively on ongoing investment and expansion

Characterisation of cyclists' willingness to pay for green initiatives at Africa's largest cycle tour

The Cape Argus Pick n Pay Cycle Tour is a major event on the road cycling calendar. The majority of cyclists travel significant distances and participation produces a substantial carbon footprint. This paper examines participants’ willingness to pay to offset their carbon footprint. The purpose of this paper is to make a contribution to the literature by linking willingness to pay to attitudes towards or beliefs (green views) about the initiatives in place, to ensure a greener cycle tour. Factor analysis is used to identify different types of cyclists, based on their green views: those with green money, those who prefer green products and the “re-cyclers”. The results of the regression analysis reveal that socio-demographic variables and the right attitude towards the environment are significant predictors of stated willingness to pay for climate change mitigation

An evaluation of interest deduction limitations to counter base erosion in South Africa

This paper aims to describe funding structures of companies liable for tax in South Africa and how this relates to other characteristics, including ownership, of the companies. The research that the paper reports on was performed as descriptive analyses. While no clear indication of a preference for debt could be identified, the results showed that the mean net interest coverage ratio for certain foreign-owned entities differed significantly from that of domestically owned entities. This may be evidence of profit-shifting activities. The results highlight trends in interest coverages ratios that may be of relevance for future legislative developments

An evaluation of interest deduction limitations to counter base erosion in South Africa

Background: The Organisation for Economic Cooperation and Development (OECD) made a number of recommendations in relation to interest deduction limitations as part of the Base Erosion and Profit Shifting (BEPS) project. In 2016 the South African National Treasury indicated that the interest deduction limitations contained in the Income Tax Act would be reviewed in the light of these recommendations.   Aim: This paper aimed to describe funding structures of companies in South Africa liable for tax and how this relates to other characteristics, including ownership, of the companies.   Setting: The research was performed using data from tax returns submitted by companies liable for income tax in South Africa.   Methods: This paper reports on descriptive analyses of the research conducted.   Results: The results showed that the mean interest-to-earnings before interest, taxes, depreciation, and amortisation (EBITDA) ratio for certain foreign-owned entities differed significantly from that of domestically owned entities.   Conclusion: The results may present evidence of profit-shifting activities. They also highlight trends in interest-to-EBITDA ratios that may be of relevance for future legislative developments. Further related research is required if interest deduction limitations in the South African tax legislation are to be reviewed in light of the OECD proposals

Socio-demographic profile and travel behaviour of biltong hunters in South Africa

This article examines the socio-demographic characteristics and travel behaviour of biltong hunters in South Africa. It attempts to determine the relationship between these factors and local tourist expenditure. In order to achieve the goal, a survey was conducted among members of the three main South African hunting associations. The behavioural variables that exerted the greatest influence on hunter expenditure were the number of hunting trips per year and the length of stay at a hunting destination. The contribution of the research is primarily, that from a methodological point of view, it was the first time that a more advanced statistical analysis has been applied to data concerning biltong hunting in South Africa, and secondly, findings will assist game-farm owners to market and develop their products in order to attract the higher spending market

South African firm-level evidence of the links between finance and efficiency

Small and medium-sized enterprises are often seen as drivers of economic growth and development by generating employment opportunities. However, for SMEs to be successful they need finance. Access to finance has been found to be a major obstacle to SMEs' ability to do business in South Africa. This paper takes a closer look at firms, their access to finance and output per worker in South Africa, by using data from the World Bank Enterprise Survey 2007. The results show that firms that are financially constrained are more vulnerable to shocks and competition, and are weaker contributors to employment creation and growth. These firms are typically small and less established. They hold less inventory, have lower capacity utilisation and are unlikely to be exporters or to introduce new products in response to competition. The results from the regression model confirm that access to finance and different sources of finance are drivers of productivity at firm level.http://reference.sabinet.co.za/webx/access/electronic_journals/jefs/jefs_v5_n1_a16.pd

The Trade Liberalization and Productivity Growth: Firm-Level Analysis from Kenya

We analyze the impact of trade liberalization on firm productivity growth in Kenya’s manufacturing sector, using a panel spanning 8 years; 1992-1999. Our analysis reveals that liberalizing trade generates high productivity improvements in the manufacturing sector. We find that a one-unit reduction in import duties as a percentage of total imports significantly increases firm-level productivity in the manufacturing sector by 5.7%. When we examine this effect on the firm’s share of exported output, we find that lowering of import duties significantly increases the share of output exported by 0.7%. Further, we sought to assess how the effect of import duties varied across the different industries in our sample. Examining the effect of import duties on industrial performance, we find a negative and statistically significant relationship in some of the industries. Our results show heterogeneous effect of reduction of import duties on industrial performance. Not all industries benefited from the lowering of import duties, especially the food and bakery, and garment industry, where productivity did not increase. These findings have important policy implications for improving the manufacturing sector. Consequently, formulating policies that effectively relax restrictive barriers to trade in the economy could speed up firm-level productivity in the manufacturing sector

Barriers to Internationalisation: Firm-Level Evidence from South Africa

The internal resource barriers that firms experience influence their capability to export. This in turn influences the export performance of the country and the extent to which exports contribute to economic growth. The aim of this paper is to analyse the impact of resource barriers, more specifically firm size, productivity, firm-specific capital and labour market constraints, on South African firms' decision to internationalise. The literature on South African exporting firms presents some interesting glimpses of the exporting behaviour of firms in South Africa. However, these were cross-sectional studies focusing on earlier NES data and the 2003 ICA data. This paper tries to provide another dimension in terms of data, by taking the 2007 ICA data into account and by constructing a unique panel from the World Bank Enterprise Survey data for 2003 and 2007. Using panel data allows for better understanding of South African firms in that it enables one to consider the dynamic nature of firms over time. Also, the earlier South African contributions examined the export behaviour of South African firms, but did not control for unobserved heterogeneity. This paper takes the analysis a step further by estimating a panel data two-step Heckman selection model of the predictors of firms’ export propensities and intensities. From the overall results of the model, it is clear that the unobserved factors that make export more likely tend to be associated with lower levels of exports. The main findings are that firm size, productivity and finance matter for exports. Also, barriers to doing business, such as electricity, customs delays and transportation and the use of imported inputs influence exporting firms’ supply-side capabilities.