This study identifies the relevant sources of firm working capital and examines their interrelationship with innovation activities and labor productivity among 529 manufacturing firms in DR Congo using the 2013 Enterprise Survey Database. We identify external funding sources as the most crucial funding source for innovation activities among manufacturing firms in DR Congo. We further establish a transmission mechanism of firm innovation through the availability of an active line of credit on firm productivity. Productive firms rely mainly on external funding for their innovation activities. We also show by the technique of propensity score matching, that the Average Treatment Effect (ATE) of R&D spending is positive and statistically significant at 5%. R&D spending impacts labour productivity by nearly 53% higher for firms with R&D spending in the last three (3) years than their counterparts. Similarly, the Average Treatment Effect on the Treated (ATET) is positive and statistically significant at 5%. We report an overwhelming 112% positive effect of R&D spending in the last three (3) years on firm productivity for the treatment group. Further analysis of the business environment shows that the absence of adequately educated labor force, obstacles associated with access to land, illegal activities of competitors, political instability, corruption, and obstacles encountered by firms from the courts and legal systems negatively affects firm productivity. Our key policy recommendation includes: 1) the need for an immediate robust and efficient financial market to channel funding to manufacturing firms, and 2) firm innovation should be the underlying factor in capital allocation.
In this study, we employed annual time series data of Ghana from 1982 to 2019 to examine the long-run money demand function and its stability. Through the methods of co-integration, Vector Error Correction Model, Auto-regressive Distributed Lag bounds test, CUSUM test (cumulative sum of the recursive residuals) and CUSUM sq test (cumulative sum squared of the recursive residuals) we established total stability and long-run relationship between money demand function and its determining factors. Accordingly, our key recommendation is for monetary policymakers to improve on their supervision and monitoring role in the financial market and institutions to avert failures within the sector such as what happened beginning 2014 with the proliferation of several Ponzi-schemes. Monitoring and supervision are key to the maintenance of confidence and stability in the monetary system.
Throughout our study entitled the impact of economic freedom and democracy on Income Inequality: empirical evidence from Sub-Saharan African countries. We have demonstrated that the economic freedom which is defined as the elementary right of all humans to have control on his or her own labor and property and an important impact on the economic growth. Individuals have the freedom to work, to produce, to consume and to save or invest the way they want in an economically free society. We use the measure of Fraser Institute's economic freedom from the world summary index (EF). A composite of five major sub-indices: Access to sound money index (SM), Freedom to trade internationally index (FT), Government size index (GV), legal structure and security of property rights index (PR), and regulation of credit, labor and business index (RG). The results show that the Freedom to trade internationally index (FT), the Government size index (GV), the regulation of credit, labor and business index (RG) have negative impact on the income inequality. Concerning the Governance, Government Effectiveness, Rule of Law, and Regulatory Quality is negatively related to Income Inequality. Nevertheless, the Control of Corruption and the coefficient of Political Stability and Absence of Violence have a positive impact on Income Inequality. The stability promotes the income inequality and through the protest and demonstration by the least privileged leads the government to reconsider the system of ruling. Our control variables such as economic growth and population throughout the four estimations they show none significance with the Income Inequality. So basically the economic growth doesn’t affect the income inequality in Sub-Saharan Africa. As Africa financial institutions, the Banks have a clear mandate to support the Regional Communities, to strengthen strategies and to lower the income inequalities across countries and within countries. The inclusive growth plans and agenda of the Banks and their new Long Term Strategy will position the Bank as a leading institution to promote activities that foster economic growth in an inclusive
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