Human capital and the timing of the first birth

This paper constructs and partially characterizes the solution of a life-cycle model of fertility choice and human capital accumulation. Because children take time to raise, women face a trade-off between between lifetime earnings and childbearing. The model implies that (i) earnings must drop discontinuously at the time of a birth; (ii) age at first birth […]

Understanding South Africa’s trade policy and performance

Policy Paper 26 South Africa’s exports have lagged behind the rest of the world over recent decades, and this has likely constrained overall economic growth. There are multiple reasons for this disappointing trade performance, including the structure of the country’s export basket (which remains dominated by commodity products), its dependence on a limited number of […]

Dominant Firms and the Economy by Thomas Philippon

The topic for the fourth virtual meeting is Dominant Firms and the Economy. The meeting will take place on 11 January 2021 at 4:00 pm (CAT).  Professor Thomas Philippon will present on the topic. Thomas Philippon is the Max L. Heine Professor of Finance at New York University, Stern School of Business. Philippon was named […]

Market Potential, Agglomeration Effects and the Location of French Firms in Africa

This paper informs the debate on the existence of agglomeration effects in Africa. It uses a structural estimation approach to investigate the impact of agglomeration economies and forward linkages on the localization of French affiliates in Africa. Using a sample of French subsidiaries in Africa, we compate the theoretically derived measure of market potential with […]

Determinants of tax revenue performance in the Southern African Development Community (SADC)

This paper investigates the determinants of tax revenue performance in all 15 Southern African Development Community countries during 1990-2010, using panel data. The investigation makes use of two estimation techniques in testing for country specificity. These are the least squares dummy variables fixed effects and the feasible generalised least squares by Park (1967) and Kmenta […]

Analysis of tax harmonisation in SADC

In this paper the authors provide an analysis of the extent of tax harmonisation (including tax rates and tax policy) in the SADC and also assess robust levels of tax harmonisation on foreign direct investment (FDI) inflows. Anecdotal evidence shows that the environment in which multinationals operate in the SADC is characterised by tax information […]

The analysis of borders effects in intra-African trade

The study aims to analyze the border effects on intra-African trade through the use of a gravity specifi cation based on the monopolistic competition model of trade introduced by Krugman (1980). The study used CEPII data on trade flows between African countries over the period 1980-2006. We accommodate for the signifi cant number of zero […]

Analysis of tax harmonisation in the SADC

This paper analyses tax harmonisation in the SADC region. Results of first attempt to devise a tax policy harmonisation measure (TPHM) by the use of a cross-sectional and panel data are reported. New methodology of computing optimum tax rates (OTRs) are introduced and a robustness test (via a sensitivity analysis) on the impact of taxation […]

Assessment of Monetary Union in SADC: Evidence from Cointegration and Panel Unit Root Tests

In this paper we investigate the likelihood of a proposed monetary union in the Southern African Development Community (SADC) being successful from the viewpoint of the Generalised Purchasing Power Parity (GPPP) hypothesis and optimum currency area (OCA) theory. We apply Johansen’s multivariate co-integration technique, panel unit root tests, Pedroni’s residual cointegration test and error correction […]

Monetary Integration in SADC: Assessment of Policy Coordination and Real Effective Exchange Rate Stability

This paper evaluates the strength of policy coordination in Southern African Development Community (SADC) as well as real effective exchange rate stability as indicative of sensible monetary integration. The underlying hypothesis goes with the assertion that countries meeting OCA conditions face more stable exchange rates. The quantitative analysis encompasses 12 SADC member states over the […]

Dynamic Integration of Emerging Market Bond Yields into the Global Bond Market

This paper investigates empirically the integration of bond markets of emerging market economies into the global bond markets from 2003 to 2012. The paper employs factor analysis based on the Arbitrage Pricing Theory to extract global factors from a panel of 38 bond yields of advanced and emerging market economies.The results reveal that bond yields […]

A Disaggregated Analysis of Product Price Integration in the Southern African Development Community

Integrated product markets are characterised by the absence of (or very low) barriers to commerce and the movement of goods. More integrated product markets are expected to experience higher volumes of bilateral trade, stronger competition and greater convergence in relative prices. Progress towards greater market integration should be reflected in lower price differentials for similar […]

A Greek wedding in SADC? – Testing for structural symmetry

This paper investigates structural symmetry among SADC countries in order to establish, judged by modern OCA theory, which of these countries may possibly make for a good monetary matrimony and which countries may be left out in the cold. SADC remains adamant that it would conclude monetary union by 2018. It can ill afford a […]

A regional perspective on Aid and FDI in Southern Africa

The global trend for official development assistance continues to decline in favour of philanthropic focussed and specific assistance on the one hand and Foreign Direct Investment (FDI) on the other. A further development in the global development sees 2015 the introduction of the New Development Bank (NDB) (NDB, 2015). This multilateral bank sponsored by the […]

Empirical Evidence on Firms and International Trade

One of the most exciting developments in the field of international trade in recent years has been the increased attention given to the heterogeneity of firms. Empirical evidence has demonstrated that only a minority of firms are involved with international trade, and that the firms that do trade are different in significant ways from other […]