Based on the fact that Africa has not fared well in attracting foreign direct investments in the last decade compared to other regions of the world, especially during periods of high uncertainty occasioned by one crisis or the other, this study investigated: the impacts of global uncertainty and economic governance institutions on FDI inflow to Africa; the moderating effect of economic governance institutions on global uncertainty-FDI relationship in Africa; and other significant drivers of FDI inflow to Africa. The study used the system GMM modeling framework and a panel of 46 African economies over the period 2010–2019. The results indicate that global uncertainty has a significant dampening effect on FDI inflow to Africa, and economic governance institutions on the continent amplify this effect rather than mitigate it. The results further indicate that natural resource endowment, market size, and initial FDI inflows are robust drivers of FDI inflows to Africa, while the roles of financial development and trade openness remained muted. Overall, the study concludes that policymakers in Africa should take urgent steps to strengthen the quality of economic governance institutions as a means of mitigating the excruciating effect of global uncertainty on FDI inflows to Africa.
This study investigates the nexus between institutional quality and stock market development. The Autoregressive Distributed Lag Model (ARDL (1,1)) and ARDL bounds testing procedure (Pesaran et al., ) was adopted for the estimation. We used annual time series data that covers the periods 1985 to 2013. Institutional quality is measured with corruption control, democratic accountability and bureaucratic quality, while stock market development is measured with market capitalization ratio. The institutional quality captures the degree of transparency and the level of investors' confidence while market capitalization measures overall performance. In addition, we also accounted for the influence of the banking sector (proxy: ratio of credit to the private sector). We control for the influence of variables such as stock market liquidity and per capita income. The results of the bounds test suggest that institutional quality and market development move together in the long run. Further investigation also shows that corruption control and democratic accountability are key institutional measures that impact significantly on stock market development, suggesting that institutional quality promotes the degree of transparency and investors' confidence. Other variables such as stock market liquidity, bureaucratic quality and per capita income were also found to be important determinants of stock market development in Nigeria. Hence, given the above findings, the relevant authorities should increase their efforts to control the level of corruption through the enhancement of the regulatory framework that could ensure accountability and efficient monitoring of the market actors for the sustainability of investors' confidence and the promotion of stock market development in Nigeria.
This paper presents the first-ever analysis of South African and Eurozone road fuel markets for the possibility that firms may be manipulating the tax system to conceal rent-seeking behavior using the nonlinear ARDL model recently advanced by Shin et al. (2013). The paper also examines these markets for asymmetric price adjustment following changes in crude oil costs in the aftermath of the 2007-2008 Global Financial Crisis. Monthly data for gasoline, automotive diesel and costs of imported crude oil from November 2004 to August 2016 were used. The results indicate that while the Eurozone road fuel markets are fraught with the problems of long-run rent-seeking, rockets and feathers effect, and the possibility that firms may be exploiting the tax system to conceal rent-seeking behaviors, the South African markets are free from these problems. Even though South Africa and the Eurozone countries have high oil import dependency ratios, this paper shows that government regulatory activities somewhat account for the difference in market outcomes.
1. Introduction Digital financial inclusion for the poor is becoming a reality. While traditional microfinance and banks remain important, the potential of using new technology-based platforms to serve the poor is huge. In particular, digital finance network coverage and the use of a variety of indirect channels (e.g., agents) reduce the costs compared to more customary full service branches owned by banks. Cash is the main barrier to financial inclusion. In as much as poor people rely on cash or barter, it remains too costly for financial institutions to serve them. Once the poor have access to cost-effective digital means of payments, they exit this trap and could in principle be profitably supplied by a range of financial institutions. Providers can offer not only mobile money, but also savings, credit, insurance, and other digital financial products to the poor at low cost. Digital Financial inclusion is usually defined as the percentage of individuals and firms that have access to or use financial services (World Bank, 2014). Burkett and Sheehan (2009) define financial exclusion as: A situation where a person, group or organization lacks or is deprived of access to affordable, appropriate and fair financial products and services, with the result that their capability to participate fully in social and economic activities is reduced, financial adversity is increased, and poverty (measured by income, debt and assets) is exacerbated. Digital Financial inclusion, therefore, is beyond access to finance, usage and quality are also important. Many people may have access to digitalfinancial services at affordable prices, but decide not to use certain financial services for reasons such as religion or culture. Statistics show disparities due to factors such as income, age and gender (Demirgüc-Kunt et al, 2015). Others may lack access due to exorbitant costs of the services, unavailability of services because of regulatory barriers, or a variety of other market and cultural factors. Fuhrmann, (2017) postulated that the business of banks involves taking deposits and using the same deposits to make loans. It could be complicated, but this is the basic model used in banking. In the past banks in Asia have been accused of not reaching out in areas where the transaction or deposit size is very low. In places with low deposits, the volumes are usually low, and the costs of serving are high. The banks did not see any sense to open up branches in areas with low volumes and the high cost of operation. The revolution of information technology (IT) has changed every aspect
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