After the adoption of the multicurrency system in 2009 Zimbabwe’s macroeconomic environment stabilized but the new economic order exposed the economy to a crippling liquidity crisis. Exports remain the only sustainable solution to Zimbabwe’s liquidity crisis in the short to medium term given the current sanctions that limits other international capital flows. This study sort to understand the factors that determine Zimbabwean manufacturing firms’ likelihood and intensity to export. The study a was based on panel data from a 19 manufacturing firms listed on the Zimbabwe Stock Exchange over the period 2009 to 2017. The propensity and intensity to export was estimated using the logit and Tobit regression models respectively. Bigger firms and firms that engage in research and development had a high propensity to export. Foreign owned firms and firms that engage in research and development had a high intensity to export, while those with high domestic turnover tended to export less. The appreciation of the USD increased Zimbabwean manufacturing firms’ propensity and intensity to export. We urge the policy makers to design investment laws that attract foreign investors, and managers to prioritize research and development. We also recommend firm managers to take advantage of periods of currency appreciation to recapitalize at a cheaper cost and export more goods since Zimbabwe’s manufacturing production is highly import dependent.
The levels of public debt have grown significantly in both emerging and developed countries even during times of peace. The rising levels of debt pose substantial debt sustainability issues to developing countries including Zimbabwe. A defaulting country usually has limited access to new international credit lines or tends to borrow at a higher cost, due to high perceived country risk premium, making the country a less attractive investment destination. Zimbabwe is currently suffering debt distress and has since the year 2000 struggled to service her external debt from international multilateral financial institutions. Zimbabwe’s external debt continues to pile up due to penalties on defaults. This paper examines the impact of public external debt on private investment in Zimbabwe, using quarterly time-series data for the period 2009 and 2017. The period of study was a period of relative stability when Zimbabwe operated under a multicurrency system. Interest rates, political risk, trade openness and household consumption are control variables of this study. Using the Vector Error Correction Model (VECM), we find that external debt and external debt squared have a negative impact on private investment in the long run. Results suggest that Zimbabwe’s external debt is crowding out private investment. In the short-term, we urge the government of Zimbabwe to apply for debt rescheduling to avoid penalties that have so far contributed to the ballooning of Zimbabwe’s external debt obligations. In the medium term, we urge the government of Zimbabwe to design comprehensive debt and arrears reduction strategies, to reduce Zimbabwe’s external debt to sustainable levels. In the long term, after regaining borrowing rights, we urge the government of Zimbabwe to invest external borrowings in productive ventures, to facilitate debt amortisation. Secondly, we recommend that external debt be invested in education, health and infrastructure, which can potentially stimulate private investment, and thus create a multiplier effect on economic growth. Lastly, we recommend the government to invest foreign loans in sectors where Zimbabwe enjoys a comparative advantage, to ensure reliable export revenue for debt servicing.
This study sought to empirically examine whether cross listed firms perform better than non-cross listed firms in periods of economic crisis. The study reviewed several theories of the motivations for cross listing including the liquidity hypothesis, the market segmentation hypothesis, investor recognition hypothesis and the growth opportunities hypothesis. The study utilised secondary data from companies' published financial statements. A sample of sixteen (16) companies were studied, eight were cross listed, and eight were purely domestically listed. The study period was 2010-2014, and the data for analysis was in form of financial ratios. Data analysis was done using SPSS 16.0. Non-parametric methods; the Mann Whitney U test was used verify if there are differences in the performance of cross listed and non-cross listed firms. The study found that cross listed firms are more efficient, better governed and have higher market value compared to non-cross listed firm. There was however no statistical evidence of differences in the total assets and ability to pay interest obligations between the cross listed and non-cross listed firms..
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