Entrepreneurial challenges facing female entrepreneurs in informal micro businesses: a case study of uMhlathuze municipality

In low-income economies, large gender gaps suggest that fewer women engage in entrepreneurial activities. The quest for gender inclusion has been a relevant issue, contested among scholars investigating ways to alleviate poverty through economic growth in South Africa and the sphere of entrepreneurial studies. The aim of this study was to investigate the obstacles that female entrepreneurs in small, medium, and micro-informal companies face in the uMhlathuze Municipality in South Africa. Twenty-four (24) females who operate small and medium micro-informal companies were interviewed using a qualitative research methodology. Content analysis was used to examine the data. Females confront various challenges, including criminality, draughts, non-conducive working settings, and intense competitiveness, according to the research. Lack of infrastructure, funding and information, education and training, and operational permission concerns are all obstacles to business development. The key issues that most of the participants faced were a lack of funds, infrastructure, and education and training, all of which were used to develop recommendations. The municipality should establish training centres in each township to train and educate women who want to start or expand their companies. The study seeks to contribute to the literature on women entrepreneurship in the informal sector by focusing mainly on challenges/barriers hindering female entrepreneur’s success in the uMhlathuze Municipality. They are limited studies that have conducted a similar research in this geographic area

Government social protection and households’ welfare during the Covid-19 pandemic in South Africa

Purpose – This study evaluates the impact of government social protection interventions on households’ welfare in South Africa. Design/methodology/approach – The study uses survey data comprising 393 observations and the multinomial logistic regression technique to analyse the effect of government interventions on households’ welfare. For robustness purposes, a negative binomial regression model is also estimated whose results corroborate the main results from the multinomial regression model. Findings – The study’s findings show that government economic interventions through social protection significantly reduce the likelihood of a decrease in household income or consumption. COVID-19 grant/social relief of distress grant, unemployment insurance, tax relief and job protection and creation are all significant in sustaining household income and consumption. Practical implications – The findings have policy implications for social development. Specifically, the findings support the use of government social protection as a safety net for low-income groups in South Africa. Originality/value – The study presents preliminary evidence on the effectiveness of several measures used to ameliorate the COVID-19-induced recession within the South African context

Shadow Banking, Bank Liquidity and Monetary Policy Shocks in Emerging Countries: A Panel VAR Approach

The study provides an analysis of the relationships between monetary policy, shadow banking and bank liquidity in emerging market economies. It is aimed at broadening knowledge on the effect of shadow banking on monetary policy transmission. Furthermore, the study seeks to analyze the impact of changes in bank liquidity on the growth of the shadow banking sector. We employ panel VAR technique to analyse the dynamics of monetary policy, shadow banking and bank liquidity using data for 15 emerging economy countries. A contractionary monetary policy shock results in a decrease in shadow banking and a decrease in bank liquidity. We also find that a positive shock in bank liquidity increases shadow bank growth and a positive shock in shadow banking also increases bank liquidity. The results point to complementarity between shadow banking and bank liquidity; and the interconnectedness between the two markets in emerging economies. We suggest continuous monitoring of shadow banking activities to minimize transmission of risk from the shadow banking system into the banking sector

Macroeconomic determinants of long-term sovereign bond yields in South Africa

This paper seeks to analyse the impact of government debt and other macroeconomic variables on the long term bond yield for South Africa. Recent increases in the government budget deficit and its corresponding borrowing has renewed interest in understanding fiscal dynamics within the economy. The study employs both the linear and non-linear Auto-regressive distributed lag (ARDL) technique to estimate the determinants of the long-term bond yield. Our results show that the short-term interest rate is the major determinant of the long term yield in both the short-run and long-run. Government debt and the US long term yield positively impact long term bond yields both in the short- and long-run. The rate of inflation, economic growth, nominal effective exchange rate and bank credit all have negative effects on the bond yield in the long-run. Tests for non-linearity reveal that the short-term interest rate has an asymmetric relationship with the long-term bond yield. However, we only establish non-linearity between government debt and bond yields in the long-run. We suggest complementarity between monetary policy and fiscal policy, a systematic program of deleveraging and implementation of structural changes aimed at increasing production

An investigation of financial contagion between cryptocurrency and equity markets: Evidence from developed and emerging markets

AbstractThe present study conducts a dynamic conditional cross-correlation and time–frequency correlation analyses between cryptocurrency and equity markets in both advanced and emerging economies. The purpose of the study is twofold. First, the study investigates the presence of the pure (narrow) form of financial contagion between cryptocurrency and stock markets in both advanced and emerging economies, during the black swan event of the COVID-19 crisis. Second, the study examines the hedging and safe-haven properties of cryptocurrencies against equity markets, before and during periods of financial upheaval triggered by the COVID-19 pandemic. Two econometric models are used: (1) the dynamic conditional correlation (DCC) GARCH and (2) the wavelet analysis models. Using the DCC GARCH model, the study found the evidence of high conditional correlations between cryptocurrency and equity markets. The high conditional correlation was mostly detected in periods of financial turmoil corresponding to the first quarter and the second quarter of 2020. The increase in conditional correlation during periods of financial upheaval (compared to a tranquil period) indicates the presence of the pure form of financial contagion. The wavelet cross-correlation analysis showed the evidence of positive cross-correlation between the Bitcoin and the equity markets during period of financial turmoil. The cross-correlation was identified in both short and long (coarse) scales. In short scales, the equity markets lead the cryptocurrency market, while the cryptocurrency market leads equity markets in coarse scales. The findings of the present study revealed that the degree of interdependence between cryptocurrency and equity markets has substantially increased during the COVID-19 period, and this has negated the safe-haven and hedging benefits of cryptocurrencies over equity markets

Shadow financial services and firm performance in South Africa

The last two decades have seen a sharp increase in shadow banking activities in both advanced and emerging economies. Shadow banks have therefore become an important part of financial markets due to their credit creation and capital allocation roles. This study investigates the impact of shadow banking on firm profitability in South Africa and evaluates the linkages between shadow banking and real economic activity. We employ single-equation cointegration methods and three measures of firm profitability in our analyses, and several macroeconomic and bank-specific variables are used as control variables. Our results are mixed showing that shadow banking has a negative impact on traditional banks’ profitability whilst on the other hand it positively impacts non-financial firms and the overall measures of firm profitability. Our results indicate that both non-financial firms and non-bank financial institutions could be benefiting from the expansion in shadow banking activities. Targeted, functional regulation is suggested in order to promote economic activities in the shadow banking sector whilst at the same time limiting possible risks that may arise