Mohd Noor Hidayat Jimainal, R. A. Hassan, Khairiah Mazdiah Kalimin, Rudy Ansar, Brahim Chekima, Lim Ming Fook
The objective of this study is to investigate the impact of business incubator graduation policy on the performance of entrepreneurs in the early start-up companies in Malaysia with the moderating role of risk-taking propensity. The target respondents were entrepreneurs who graduated from business incubator in Sabah, Sarawak, Johor, Selangor, Kuala Lumpur and Penang. A total of 121 valid questionnaires were used for analysis in this paper. The data were analysed using Partial Least Squares (PLS) within the Structural Equation Modelling (SEM) technique. The results show that graduation policy has a significant positive effect on the performance of entrepreneurs in the early start-up companies. However, risk-taking propensity has no moderating role between graduation policy and the performance of entrepreneurs in the early start-up companies in Malaysia. The findings of the study's outputs may serve as guidelines for the Malaysian policy makers and government agencies as well as business incubators to have a better picture of entrepreneurs in business incubators in Malaysia. The results obtained can also be used by other researchers as guidelines for their future research in the same field of study. Discussion and limitation of the study is elaborated further.
{"title":"The Effect of Business Incubator Graduation Policy towards the Performance of Entrepreneurs in the Early Start-Up Companies in Malaysia with the Moderating Effect of Risk-taking Propensity","authors":"Mohd Noor Hidayat Jimainal, R. A. Hassan, Khairiah Mazdiah Kalimin, Rudy Ansar, Brahim Chekima, Lim Ming Fook","doi":"10.5296/ber.v12i3.20094","DOIUrl":"https://doi.org/10.5296/ber.v12i3.20094","url":null,"abstract":"The objective of this study is to investigate the impact of business incubator graduation policy on the performance of entrepreneurs in the early start-up companies in Malaysia with the moderating role of risk-taking propensity. The target respondents were entrepreneurs who graduated from business incubator in Sabah, Sarawak, Johor, Selangor, Kuala Lumpur and Penang. A total of 121 valid questionnaires were used for analysis in this paper. The data were analysed using Partial Least Squares (PLS) within the Structural Equation Modelling (SEM) technique. The results show that graduation policy has a significant positive effect on the performance of entrepreneurs in the early start-up companies. However, risk-taking propensity has no moderating role between graduation policy and the performance of entrepreneurs in the early start-up companies in Malaysia. The findings of the study's outputs may serve as guidelines for the Malaysian policy makers and government agencies as well as business incubators to have a better picture of entrepreneurs in business incubators in Malaysia. The results obtained can also be used by other researchers as guidelines for their future research in the same field of study. Discussion and limitation of the study is elaborated further.","PeriodicalId":37165,"journal":{"name":"African Journal of Business and Economic Research","volume":"27 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86929757","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Muhammad Aiman Haziq Norehan, Abdul Rahim Ridzuan, S. Ismail, Mohamad Idham Md Razak, M. Shaari
This paper examines whether there is a long-run relationship between foreign direct investment (FDI) inflows, ICT development and economic growth in China and Malaysia. We use a newly developed cointegration test, the autoregressive distributed lag (ARDL), to examine this long-run relationship by employing annual data from 1980 to 2017. The study results show that ICT has a positive relationship with economic growth in China while negative in Malaysia. Capital and labour were found significantly influence economic growth in China and Malaysia. FDI inflows and human capital failed to influence economic growth in China, but human capital significantly influenced Malaysia. The findings are important for formulating policies by recommending mandatory policies related to FDI inflows, human capital and labour to achieve long-term and sustainable development in China and Malaysia.
{"title":"The Impact of FDI Inflows and ICT Development towards Economic Growth: Evidence for China and Malaysia","authors":"Muhammad Aiman Haziq Norehan, Abdul Rahim Ridzuan, S. Ismail, Mohamad Idham Md Razak, M. Shaari","doi":"10.5296/ber.v12i3.20139","DOIUrl":"https://doi.org/10.5296/ber.v12i3.20139","url":null,"abstract":"This paper examines whether there is a long-run relationship between foreign direct investment (FDI) inflows, ICT development and economic growth in China and Malaysia. We use a newly developed cointegration test, the autoregressive distributed lag (ARDL), to examine this long-run relationship by employing annual data from 1980 to 2017. The study results show that ICT has a positive relationship with economic growth in China while negative in Malaysia. Capital and labour were found significantly influence economic growth in China and Malaysia. FDI inflows and human capital failed to influence economic growth in China, but human capital significantly influenced Malaysia. The findings are important for formulating policies by recommending mandatory policies related to FDI inflows, human capital and labour to achieve long-term and sustainable development in China and Malaysia.","PeriodicalId":37165,"journal":{"name":"African Journal of Business and Economic Research","volume":"14 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81807313","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-06DOI: 10.31920/1750-4562/2022/v17n3a7
Tapiwa Muzata
Corporate governance (CG) failures, exemplified by noncompliance with laws, regulations and best practices, have pecuniary costs. Using agency theory, the study aimed to quantify costs of governance failures in South Africa’s FTSE/JSE Top40 listed companies and establish ultimate cost bearer. This differentiates this study from extant literature and makes both methodological and practice contributions by using Value at Risk procedures. Except for Steinhoff, which lost 85% of its value in six weeks, event study method was used to select the other eleven Top40 listed companies included in the study. Data on identified CG failures, published on the Stock Exchange News Service and announced by Regulatory Authorities between 2008 and 2016, was used. At 99.99% confidence level, up to 73.33% of revenue and 62 cents per R1 of market capitalisation were eroded because of governance failures. Due to ascertained losses, the study concluded that CG failures have pecuniary socio-economic costs incurred by principals and government through social expenditure. Theoretical implications suggest agency theory’s extension as agency costs underestimate potential costs by excluding socio-economic costs. The study recommended the use of behavioural theories for insights into agents’ behaviours leading to governance failures and losses. It also recommended that policymakers should strengthen the role of gatekeeping professions to curb the magnitude of ascertained costs.
{"title":"Costs of Corporate Governance Failures: Evidence from South Africa","authors":"Tapiwa Muzata","doi":"10.31920/1750-4562/2022/v17n3a7","DOIUrl":"https://doi.org/10.31920/1750-4562/2022/v17n3a7","url":null,"abstract":"Corporate governance (CG) failures, exemplified by noncompliance with laws, regulations and best practices, have pecuniary costs. Using agency theory, the study aimed to quantify costs of governance failures in South Africa’s FTSE/JSE Top40 listed companies and establish ultimate cost bearer. This differentiates this study from extant literature and makes both methodological and practice contributions by using Value at Risk procedures. Except for Steinhoff, which lost 85% of its value in six weeks, event study method was used to select the other eleven Top40 listed companies included in the study. Data on identified CG failures, published on the Stock Exchange News Service and announced by Regulatory Authorities between 2008 and 2016, was used. At 99.99% confidence level, up to 73.33% of revenue and 62 cents per R1 of market capitalisation were eroded because of governance failures. Due to ascertained losses, the study concluded that CG failures have pecuniary socio-economic costs incurred by principals and government through social expenditure. Theoretical implications suggest agency theory’s extension as agency costs underestimate potential costs by excluding socio-economic costs. The study recommended the use of behavioural theories for insights into agents’ behaviours leading to governance failures and losses. It also recommended that policymakers should strengthen the role of gatekeeping professions to curb the magnitude of ascertained costs.","PeriodicalId":37165,"journal":{"name":"African Journal of Business and Economic Research","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42525709","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-06DOI: 10.31920/1750-4562/2022/v17n3a6
Baba Adibura Seidu, Yaw Ndori Queku, G. Tackie, J. Mensah
This paper examined the dynamics of working capital targeting and corporate life cycle (CLC) of listed manufacturing and trading firms on the Ghana Stock Exchange (GSE). Annual data spanning 2008 to 2019 and Panel Dynamic OLS, Delay and Half-life were used for the empirical analysis. The paper found that working capital varies across the stages of CLC with cash holding exhibiting low-high-high-low-low pattern while inventory holding showing U-shape. There is relatively high persistence at each stage of CLC with no sequential order of transition in the stages of life-cycle. Firms’ working capital targeting showed very high rate of adjustment to changes in stages of CLC with cash holding targeting showing the highest speed of adjustment while inventory holding being slowest to adjustment. The results imply that firms’ working capital policies are markedly interacted with the transitional mechanism of CLC and, therefore, firms should continuously evaluate working capital targets within the corporate life-cycle transition process.
{"title":"Working Capital-targeting and Firms Life Cycle: Analysis of Persistence and Speed of Adjustment","authors":"Baba Adibura Seidu, Yaw Ndori Queku, G. Tackie, J. Mensah","doi":"10.31920/1750-4562/2022/v17n3a6","DOIUrl":"https://doi.org/10.31920/1750-4562/2022/v17n3a6","url":null,"abstract":"This paper examined the dynamics of working capital targeting and corporate life cycle (CLC) of listed manufacturing and trading firms on the Ghana Stock Exchange (GSE). Annual data spanning 2008 to 2019 and Panel Dynamic OLS, Delay and Half-life were used for the empirical analysis. The paper found that working capital varies across the stages of CLC with cash holding exhibiting low-high-high-low-low pattern while inventory holding showing U-shape. There is relatively high persistence at each stage of CLC with no sequential order of transition in the stages of life-cycle. Firms’ working capital targeting showed very high rate of adjustment to changes in stages of CLC with cash holding targeting showing the highest speed of adjustment while inventory holding being slowest to adjustment. The results imply that firms’ working capital policies are markedly interacted with the transitional mechanism of CLC and, therefore, firms should continuously evaluate working capital targets within the corporate life-cycle transition process.","PeriodicalId":37165,"journal":{"name":"African Journal of Business and Economic Research","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41860725","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-06DOI: 10.31920/1750-4562/2022/v17n3a12
Tumi Vuyolwethu Nkohla, S. Munacinga, N. Marwa, R. Ncwadi
Using a second-stage Data Envelope Analysis (DEA) model, this paper seeks to determine the drivers of efficiency for 23 public universities in South Africa for the period 2009-2016 with special attention given to the funding–efficiency nexus. Our Tobit results indicate that quality of staff, government funding, student fees, private income, and Gross Domestic Product (GDP) per capita are positive factors of efficiency, while the proportion of non-white to white staff was found as the determinant of inefficiency. It was concluded that adequate funding and proper management of income by the universities, economic growth and employment of high educated academic staff can increase efficiency levels of the public universities in South Africa. On the other hand, an increase of non-white to white staff in the South African public universities is a threat to the universities’ efficiency. It is, therefore, vital to allocate adequate funding for universities to improve their efficiency.
{"title":"Determinants of Technical Efficiency of Public Universities in South Africa","authors":"Tumi Vuyolwethu Nkohla, S. Munacinga, N. Marwa, R. Ncwadi","doi":"10.31920/1750-4562/2022/v17n3a12","DOIUrl":"https://doi.org/10.31920/1750-4562/2022/v17n3a12","url":null,"abstract":"Using a second-stage Data Envelope Analysis (DEA) model, this paper seeks to determine the drivers of efficiency for 23 public universities in South Africa for the period 2009-2016 with special attention given to the funding–efficiency nexus. Our Tobit results indicate that quality of staff, government funding, student fees, private income, and Gross Domestic Product (GDP) per capita are positive factors of efficiency, while the proportion of non-white to white staff was found as the determinant of inefficiency. It was concluded that adequate funding and proper management of income by the universities, economic growth and employment of high educated academic staff can increase efficiency levels of the public universities in South Africa. On the other hand, an increase of non-white to white staff in the South African public universities is a threat to the universities’ efficiency. It is, therefore, vital to allocate adequate funding for universities to improve their efficiency.","PeriodicalId":37165,"journal":{"name":"African Journal of Business and Economic Research","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43120281","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-06DOI: 10.31920/1750-4562/2022/v17n3a2
T. Qabhobho, H. Khobai
This paper examined the potential inflation spill-over effects from BRIC to five SADC countries (Angola, Botswana, South Africa, Tanzania and Zambia) by using data collected for the period 1985-2020. Thirty-six (36) observations were used to obtain more reliable results with greater precision. Studies conducted on the impossible trinity argue that, in the case of highly financially integrated economies, domestic interest rates are tightly linked to the international interest rates if it is impossible to manipulate domestic interest rates. Specifically, interest rates for open economies tend to be influenced by international interest rates if these economies opt for free capital flows with a fixed exchange rate regime. Fisher's effect theory asserts that domestic interest rates trend positively with inflation rates. The principal method of research used is that of quantitative analysis. Given the empirical nature of the research, the paradigm employed is positivist. This paper employed the generalised method of moments (GMM) model, the Johansen cointegration procedure, and the Granger causality test in a vector error correction (VEC) model. The findings indicated that the fixed-exchange-rate regimes (soft pegs and hard pegs) are associated with high responsiveness of the domestic inflation rate to the foreign countries’ inflation rates, rather than to floating exchange-rate regimes (free-floating and managed floats). The policy implications for control of inflation in SADC economies are that, because of the financial market integration increase between SADC and BRIC economies, monetary authorities in SADC countries should consider floating exchange rate regimes (managed-floats or free-floating).
{"title":"Inflation Spill-overs from BRIC to SADC Economies: The Impossible Trinity Theory Analysis","authors":"T. Qabhobho, H. Khobai","doi":"10.31920/1750-4562/2022/v17n3a2","DOIUrl":"https://doi.org/10.31920/1750-4562/2022/v17n3a2","url":null,"abstract":"This paper examined the potential inflation spill-over effects from BRIC to five SADC countries (Angola, Botswana, South Africa, Tanzania and Zambia) by using data collected for the period 1985-2020. Thirty-six (36) observations were used to obtain more reliable results with greater precision. Studies conducted on the impossible trinity argue that, in the case of highly financially integrated economies, domestic interest rates are tightly linked to the international interest rates if it is impossible to manipulate domestic interest rates. Specifically, interest rates for open economies tend to be influenced by international interest rates if these economies opt for free capital flows with a fixed exchange rate regime. Fisher's effect theory asserts that domestic interest rates trend positively with inflation rates. The principal method of research used is that of quantitative analysis. Given the empirical nature of the research, the paradigm employed is positivist. This paper employed the generalised method of moments (GMM) model, the Johansen cointegration procedure, and the Granger causality test in a vector error correction (VEC) model. The findings indicated that the fixed-exchange-rate regimes (soft pegs and hard pegs) are associated with high responsiveness of the domestic inflation rate to the foreign countries’ inflation rates, rather than to floating exchange-rate regimes (free-floating and managed floats). The policy implications for control of inflation in SADC economies are that, because of the financial market integration increase between SADC and BRIC economies, monetary authorities in SADC countries should consider floating exchange rate regimes (managed-floats or free-floating).","PeriodicalId":37165,"journal":{"name":"African Journal of Business and Economic Research","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46325718","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper investigated the effect of information and communications technology (ICT) on technical inefficiency in the Southern African Democratic Community (SADC). A stochastic production and technical inefficiency functions were simultaneously estimated, using panel data on 16 SADC member countries between 1980 and 2017. The study provided evidence that ICT can reduce technical inefficiency. Further, evidence shows that capital, labour and human capital are significant in increasing countries’ outputs. This paper concluded that the Southern African Democratic Community needs to ensure that investment in ICT is increased across its member states as a means to reduce technical inefficiency and increase output.
{"title":"ICT and Technical Inefficiency in SADC: A Stochastic Frontier Analysis","authors":"Biyase Mduduzi, Udimal Thomas, Kirsten Frederich, Mapumulo Noluthando","doi":"10.31920/1750-4562/2022/v17n3a3","DOIUrl":"https://doi.org/10.31920/1750-4562/2022/v17n3a3","url":null,"abstract":"This paper investigated the effect of information and communications technology (ICT) on technical inefficiency in the Southern African Democratic Community (SADC). A stochastic production and technical inefficiency functions were simultaneously estimated, using panel data on 16 SADC member countries between 1980 and 2017. The study provided evidence that ICT can reduce technical inefficiency. Further, evidence shows that capital, labour and human capital are significant in increasing countries’ outputs. This paper concluded that the Southern African Democratic Community needs to ensure that investment in ICT is increased across its member states as a means to reduce technical inefficiency and increase output.","PeriodicalId":37165,"journal":{"name":"African Journal of Business and Economic Research","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44868245","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-06DOI: 10.31920/1750-4562/2022/v17n3a13
Anrusha Bhana
The study aimed to address the management and its impact on the age and tenure cohort at a higher education institution. An overview of what constitutes the characteristics of managers as well as a discourse between leadership and management skills is provided. The study adopted a mixed method design comprising a quantitative approach for employees and a qualitative approach for line management leadership and executive management leadership. The total population for the quantitative method constituted 1874 academic and administrative employees with a targeted sample of 420. The study obtained a response rate of 312 out of 420 employees. The qualitative data collection tools for the management were semi-structured interviews and open-ended interviews of 12 out of 18 being the realised sample size. The study showed evidence of poor leadership and management qualities in relation to support, role-modelling, trust, critical decisions, and self-management which may have a negative effect on younger and new employees. The study made an original contribution to this area as it depicted a clear indication of poor role-modelling and decision-making that managers lack, conflict management skills and its implications thereof.
{"title":"Role-modelling, Decision-making and Conflict Resolution: Impact of Leadership and Management on Academic and Administrative Employees at a South African Higher Education Institution","authors":"Anrusha Bhana","doi":"10.31920/1750-4562/2022/v17n3a13","DOIUrl":"https://doi.org/10.31920/1750-4562/2022/v17n3a13","url":null,"abstract":"The study aimed to address the management and its impact on the age and tenure cohort at a higher education institution. An overview of what constitutes the characteristics of managers as well as a discourse between leadership and management skills is provided. The study adopted a mixed method design comprising a quantitative approach for employees and a qualitative approach for line management leadership and executive management leadership. The total population for the quantitative method constituted 1874 academic and administrative employees with a targeted sample of 420. The study obtained a response rate of 312 out of 420 employees. The qualitative data collection tools for the management were semi-structured interviews and open-ended interviews of 12 out of 18 being the realised sample size. The study showed evidence of poor leadership and management qualities in relation to support, role-modelling, trust, critical decisions, and self-management which may have a negative effect on younger and new employees. The study made an original contribution to this area as it depicted a clear indication of poor role-modelling and decision-making that managers lack, conflict management skills and its implications thereof.","PeriodicalId":37165,"journal":{"name":"African Journal of Business and Economic Research","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48560157","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-06DOI: 10.31920/1750-4562/2022/v17n3a1
Erasmus Yaw Afriyie
This study attempts to fill the research gap caused by a lack of empirical studies on the determinants of commercial banks’ profitability in sub-Saharan Africa. The purpose of the study was to provide comprehensive knowledge of commercial banks’ profitability and its determinants in sub-Saharan Africa, using only bank-specific factors. The study sourced panel data from the audited financial statements of the commercial banks through the Orbis database, which covered the period 2011 to 2018. In total, 400 commercial banks in 40 countries were involved in the eight-year study, thus generating 3,200 observations. The study employed return on average assets (ROAA) as a representation of bank profitability indicators. Bank-specific factors such as cost to income ratio (CTI), net interest margin (NIM), non-performing loan (NPL), and net income (NIC) represented the independent variables. Descriptive statistics, correlation matrix, the variance inflation factor and tolerance value were considered for the analysis. The study used multiple linear regressions to measure the impact in sub-Saharan Africa. The empirical findings revealed that net interest margin (NIM) and net income (NIC) had a significant positive impact on bank profitability, whereas the cost to income ratio and non-performing loan (NPL) had a significant negative impact on bank profitability. The study recommended that bank managers and policymakers should develop optimum credit risk and operational costs policies to reduce the cost to income ratio and non-performing loans to improve net income and net interest margin in the sub-region.
{"title":"Profitability Determinants of Commercial Banks: Empirical Evidence from Sub-Saharan Africa","authors":"Erasmus Yaw Afriyie","doi":"10.31920/1750-4562/2022/v17n3a1","DOIUrl":"https://doi.org/10.31920/1750-4562/2022/v17n3a1","url":null,"abstract":"This study attempts to fill the research gap caused by a lack of empirical studies on the determinants of commercial banks’ profitability in sub-Saharan Africa. The purpose of the study was to provide comprehensive knowledge of commercial banks’ profitability and its determinants in sub-Saharan Africa, using only bank-specific factors. The study sourced panel data from the audited financial statements of the commercial banks through the Orbis database, which covered the period 2011 to 2018. In total, 400 commercial banks in 40 countries were involved in the eight-year study, thus generating 3,200 observations. The study employed return on average assets (ROAA) as a representation of bank profitability indicators. Bank-specific factors such as cost to income ratio (CTI), net interest margin (NIM), non-performing loan (NPL), and net income (NIC) represented the independent variables. Descriptive statistics, correlation matrix, the variance inflation factor and tolerance value were considered for the analysis. The study used multiple linear regressions to measure the impact in sub-Saharan Africa. The empirical findings revealed that net interest margin (NIM) and net income (NIC) had a significant positive impact on bank profitability, whereas the cost to income ratio and non-performing loan (NPL) had a significant negative impact on bank profitability. The study recommended that bank managers and policymakers should develop optimum credit risk and operational costs policies to reduce the cost to income ratio and non-performing loans to improve net income and net interest margin in the sub-region.","PeriodicalId":37165,"journal":{"name":"African Journal of Business and Economic Research","volume":" ","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45134653","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-06DOI: 10.31920/1750-4562/2022/v17n3a11
Salmon Mugoda, Noluntu Stella Dyubhele
This paper uses primary data to examine the portrait and obstacles faced by SMEs in Bukedi sub-region, Uganda. Evidence suggests that most businesses surveyed (57.6%) were one-man ventures where self-employed people solely managed their enterprises. This indicts the perceived role of SMEs to employment growth and poverty reduction. With the exception of seemingly technical fields like drug-shop business, people without formal education and early leavers exhibited formidable entrepreneurial orientation in non-skill-oriented businesses. This included selling essential products (72.3%), food (100%), produce (57.2%) and running restaurants (81.8%). Therefore, the decision to undertake a specific business might have been determined by the level of education of entrepreneurs. The empirical results further indicate that the factors motivating business start-ups were both “push” and “pull” factors. For the former, circumstances forced unemployed individuals (66.8%) to start business to help themselves, whereas in the latter scenario, attractive conditions lured people (33.2%) into starting business. The study recommends that to augment SME performance, government needs to become solution oriented and initiate robust supportive strategies in areas of regulatory framework, electricity, finance, and enhancing purchasing power. This has got massive potential to revitalise the sector for Bukedi’s economic transformation and development.
{"title":"The Portrait of Small and Medium Enterprises (SMEs) and the Main Obstacles Faced by Businesses: Evidence from Bukedi Sub-region of Uganda","authors":"Salmon Mugoda, Noluntu Stella Dyubhele","doi":"10.31920/1750-4562/2022/v17n3a11","DOIUrl":"https://doi.org/10.31920/1750-4562/2022/v17n3a11","url":null,"abstract":"This paper uses primary data to examine the portrait and obstacles faced by SMEs in Bukedi sub-region, Uganda. Evidence suggests that most businesses surveyed (57.6%) were one-man ventures where self-employed people solely managed their enterprises. This indicts the perceived role of SMEs to employment growth and poverty reduction. With the exception of seemingly technical fields like drug-shop business, people without formal education and early leavers exhibited formidable entrepreneurial orientation in non-skill-oriented businesses. This included selling essential products (72.3%), food (100%), produce (57.2%) and running restaurants (81.8%). Therefore, the decision to undertake a specific business might have been determined by the level of education of entrepreneurs. The empirical results further indicate that the factors motivating business start-ups were both “push” and “pull” factors. For the former, circumstances forced unemployed individuals (66.8%) to start business to help themselves, whereas in the latter scenario, attractive conditions lured people (33.2%) into starting business. The study recommends that to augment SME performance, government needs to become solution oriented and initiate robust supportive strategies in areas of regulatory framework, electricity, finance, and enhancing purchasing power. This has got massive potential to revitalise the sector for Bukedi’s economic transformation and development.","PeriodicalId":37165,"journal":{"name":"African Journal of Business and Economic Research","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2022-09-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41603492","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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