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on Africa |
| By: | Dary, Stanley |
| Abstract: | Trade credit is a form of short-term financing employed by non-financial firms in inter-firm trade. This study examines the incidence and the motives for extending trade credit among agro-food manufacturing firms in Africa. The study uses a subsample of agro-food firms from 2014 World Bank Enterprise Survey data from eight African countries: Burundi, Malawi, Mauritania, Namibia, Nigeria, Senegal, Sudan and South Sudan. The incidence of trade credit is relatively high among agro-food firms as 60.5% and 55% of firms extend and receive trade credit respectively. However, the mean proportion of yearly total input purchases received as trade credit (22%) is higher than the mean proportion of yearly total sales extended as trade credit (19%). From the two-limit Tobit estimation, firm size, manager experience, degree of product diversification, access to bank credit, overdraft availability and supplier credit are found to play a significant role in the level of trade credit firms extend to customers. However, when supplier credit is added to the model, it completely absorbs the effect of access to bank credit. For suspected endogeneity of supplier credit, an instrumental variable (IV) two-limit Tobit is estimated and the results show no presence of endogeneity. From the results, transaction, quality verification, marketing and long-term relationship motives for extending trade credit to customers are implied. |
| Keywords: | Trade Credit, Trade Credit Theories, Agro-Food Firms, Two-Limit Tobit, Africa, Agribusiness, Agricultural Finance, Financial Economics, Industrial Organization, L66 L14, |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea17:252850&r=afr |
| By: | Kudo, Yuya |
| Abstract: | Levirate marriage, whereby a widow is inherited by male relatives of her deceased husband, has anecdotally been viewed as informal insurance for widows who have limited property rights. This study investigates why this widespread practice in sub-Saharan Africa has recently been disappearing. A developed game-theoretic analysis reveals that levirate marriage arises as a pure strategy subgame perfect equilibrium when a husband's clan desires to keep children of the deceased within its extended family and widows have limited independent livelihood means. Female empowerment renders levirate marriage redundant because it increases widows' reservation utility. HIV/AIDS also discourages a husband's clan from inheriting a widow who loses her husband to HIV/AIDS, reducing her remarriage prospects and thus, reservation utility because she is likely to be HIV positive. Consequently, widows' welfare tends to decline (increase) in step with the deterioration of levirate marriage driven by HIV/AIDS (female empowerment). By exploiting long-term household panel data drawn from rural Tanzania and testing multiple theoretical predictions relevant to widows' welfare and women's fertility, this study finds that HIV/AIDS is primarily responsible for the deterioration of levirate marriage. Young widows in Africa may need some form of social protection against the influence of HIV/AIDS. |
| Keywords: | Women welfare, Social customs, Marriage, Diseases, Tanzania, Female empowerment, HIV/AIDS, Informal insurance, levirate marriage, Social institution, Widowhood protection |
| JEL: | J12 J13 J16 Z13 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper627&r=afr |
| By: | Vecci, Joseph (Department of Economics, School of Business, Economics and Law, Göteborg University); Zelinsky, Tomas (Faculty of Economics, Technical University of Kosice, Kosice, Slovakia) |
| Abstract: | We use a Spatial Durbin Model to examine the relationship between civil society aid projects and measures of civil society including membership and participation in community groups and satisfaction with democracy in Nigeria and Uganda. We then study the effect of civil society aid programs on corruption, a proxy for elite capture. The spatial model allows us to estimate the effects of project spillovers that may indirectly impact non project areas. We find that civil society aid projects are associated with a decrease in the creation of community groups and attendance at community meetings in Nigeria. In Uganda, we find that civil society aid projects have a negative effect on the membership of community groups in neighboring areas. We also find that civil society projects have a positive effect on satisfaction with democracy, but they reduce satisfaction in neighbouring areas in both Nigeria and Uganda. Our corruption measures reveal that corruption has a positive direct correlation with civil society aid projects in Uganda. A number of robustness measures are used to account for selection. |
| Keywords: | Foreign Aid; civil society; corruption; Africa; development |
| JEL: | D72 D73 F35 O10 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0688&r=afr |
| By: | Ho, Sin-Yu |
| Abstract: | Over the past decade sub-Saharan African countries have made remarkable gains in promoting growth alongside economic stability. However, with the outbreak of the financial and economic crisis in advanced economies, will these hard-won economic gains in the region be threatened? In this paper, we seek to provide an overview of how sub-Saharan African countries are exposed to the crisis through both financial and real transmission channels, and to critically assess the impact of the crisis on different economies. To accomplish this task, we first provide an overview of the recent economic development of sub-Saharan African countries, and a brief discussion of the sources and the development of the crisis. We then proceed to explore the direct financial transmission channels of the crisis and their impacts on sub-Saharan African countries. In addition, we explore the indirect real transmission channels of the crisis and how the sub-Saharan African economies are impacted by them. Thereafter, we identify a couple of policy implications. |
| Keywords: | Global financial and economic crisis; transmission mechanisms; sub-Saharan Africa |
| JEL: | F02 G01 G15 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:75658&r=afr |
| By: | Eoin McGuirk (Yale University); Marshall Burke (Stanford University and NBER) |
| Abstract: | We study the impact of plausibly exogenous global food price shocks on local violence across the African continent. In food-producing areas, higher food prices reduce conflict over the control of territory (what we call “factor conflict”) and increase conflict over the appropriation of surplus (“output conflict”). We argue that this difference arises because higher prices raise the opportunity cost of soldiering for producers, while simultaneously inducing net consumers to appropriate increasingly valuable surplus as their real wages fall. In regions without crop agriculture, higher food prices increase both factor conflict and output conflict, as poor consumers turn to soldiering and appropriation in order to maintain a minimum consumption target. We validate local-level findings on output conflict using geocoded survey data on interpersonal theft and violence against commercial farmers and traders. Ignoring the distinction between producer and consumer effects leads to attenuated estimates. Our findings help reconcile a growing but ambiguous literature on the economic roots of conflict. |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:hic:wpaper:242&r=afr |
| By: | Stijn van Weezel (School of Economics, University College Dublin) |
| Abstract: | Despite the surge in quantitative research examining the link between climate variability and conflict, a lot of uncertainty exists concerning whether there is a link. One shortcoming of the current literature is that it focuses mainly on statistical inference in order to establish causation with little attention for the predictive performance of the model. In contrast, this study extends the current literature by focusing on the predictive accuracy of a model linking droughts to communal conflict using data for Nigeria for the period 2006-2014. Using a number of different model specifications and estimation methods to test the robustness of the results, the analysis shows that although the regression results show a positive link between the occurrence of droughts and communal conflict, the predictive accuracy of the model is relatively low. In contrast, accounting for the temporal and spatial dynamics of conflict leads to better forecasts compared to the climate variable. |
| Keywords: | Nigeria, droughts, communal conflict, cross-validation |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:hic:wpaper:240&r=afr |
| By: | Phiri, Andrew |
| Abstract: | The global financial crisis of 2008 sparked an ongoing debate concerning the interlink between monetary policy and equity returns. This study contributes to the debate by examining whether the South African Reserve Bank (SARB) repo rate responds asymmetrically to changes in the returns on four equity indices on the Johannesburg Stock Exchange (JSE). Our empirical model is the momentum threshold autoregressive (MTAR) model which is applied to monthly data corresponding to periods before the financial crisis (2002:01 - 2008:08) and periods after the crisis (2008:08 - 2016:12). There are three main findings which can be derived from our empirical analysis. Firstly, we significant negative relationship between equity prices to the repo rate before the crisis and this relationship turns insignificant in periods after the crisis. Secondly, we find that the Reserve Bank mainly monitored positive disturbances to equity indices before the crisis whereas after the crisis the Reserve Bank appears to be more responsive to negative equity deviations. Lastly, we find significant error correcting behaviour in periods before the crisis but not afterwards. Overall, our results indicate that the SARB appears to have been responsive to equity returns prior to the crisis but not for subsequent periods. |
| Keywords: | Repo rate; Stock market returns; Monetary Policy; South African Reserve Bank (SARB); Johannesburg Stock Exchange (JSE); Financial crisis; South Africa. |
| JEL: | C22 C51 C52 E52 G10 |
| Date: | 2017–02–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76542&r=afr |