Purpose: Given the importance of valuations in business rescue and the vague guidance provided by the Companies Act 71 of 2008, the study analyses valuation-related disclosure in published business rescue plans (PPs) in South Africa (SA). The main objective of the paper, in addition to being exploratory of actual practices, was to highlight a need for improvements in the Companies Act legislation to support more consistent practices. Design: A quantitative content analysis was done of 55 PPs between 2013 and 2018, using descriptive content analysis and inferential statistical techniques. Findings: Primarily, the list of material assets were disclosed at accounting book values in PPs, and liquidation values were mostly independently determined. PPs described various risks relating to the implementation of the PP; however, the PPs mostly lacked calculations of how the risk will affect the business rescue value. On average, the business rescue value exceeded the liquidation value with 36.4 cents for concurrent creditors compared to 33.7 and 21.2 cents for preferent and secured creditors, respectively. Notably, when the PP included a sale of the business, offers received were, on average, 2.5 times the liquidation value and represented 57% of the book value of the company’s assets at the time. Practical implications: The study suggests improvements to the Companies Act to support more consistent valuation-related disclosure in PPs in SA, in particular, the disclosure of the valuation basis used, the average business rescue premium and offers relative to asset values. Such disclosure would provide evidence to investors on the sound potential of investing in a financially distressed company in SA but, at the same time, set realistic sale expectations for both creditors, BRPs and shareholders. Originality: In view of limited empirical evidence on business rescue prices, the article presents the results of original research in this field.
{"title":"A Quantitative Analysis of Valuation Disclosure in Published Business Rescue Plans","authors":"S. Conradie, C. Lamprecht","doi":"10.25159/1998-8125/9746","DOIUrl":"https://doi.org/10.25159/1998-8125/9746","url":null,"abstract":"Purpose: Given the importance of valuations in business rescue and the vague guidance provided by the Companies Act 71 of 2008, the study analyses valuation-related disclosure in published business rescue plans (PPs) in South Africa (SA). The main objective of the paper, in addition to being exploratory of actual practices, was to highlight a need for improvements in the Companies Act legislation to support more consistent practices.\u0000Design: A quantitative content analysis was done of 55 PPs between 2013 and 2018, using descriptive content analysis and inferential statistical techniques.\u0000Findings: Primarily, the list of material assets were disclosed at accounting book values in PPs, and liquidation values were mostly independently determined. PPs described various risks relating to the implementation of the PP; however, the PPs mostly lacked calculations of how the risk will affect the business rescue value. On average, the business rescue value exceeded the liquidation value with 36.4 cents for concurrent creditors compared to 33.7 and 21.2 cents for preferent and secured creditors, respectively. Notably, when the PP included a sale of the business, offers received were, on average, 2.5 times the liquidation value and represented 57% of the book value of the company’s assets at the time.\u0000Practical implications: The study suggests improvements to the Companies Act to support more consistent valuation-related disclosure in PPs in SA, in particular, the disclosure of the valuation basis used, the average business rescue premium and offers relative to asset values. Such disclosure would provide evidence to investors on the sound potential of investing in a financially distressed company in SA but, at the same time, set realistic sale expectations for both creditors, BRPs and shareholders.\u0000Originality: In view of limited empirical evidence on business rescue prices, the article presents the results of original research in this field.","PeriodicalId":44582,"journal":{"name":"Southern African Business Review","volume":"43 1","pages":""},"PeriodicalIF":0.6,"publicationDate":"2022-03-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84455470","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 : 2022-03-31DOI: 10.25159/1998-8125/10250
C. Cherry
Purpose/objectives: The objectives of this article are to obtain an understanding of difficulties encountered by auditors during the Covid-19 pandemic and to determine how they addressed these difficulties. This is to add to and verify the accuracy of the existing body of literature that speculates on the possible effects of the pandemic on external auditors. Design/methodology/approach: Literature from several professional bodies, practitioners and academics is examined. The effects of Covid-19 on audits are explored through examining auditors’ reports, including the Key Audit Matters (KAMs) raised by auditors during audits conducted since the start of the pandemic. Findings: A selection of audit reports of companies listed on the Johannesburg Stock Exchange (JSE) reveals how Covid-19 plagued the audits of 2020. The audit reports themselves confirm these concerns and reveal that Covid-19 is not only linked to a significant number of key audit matters but could also be significantly associated with the type of key audit matter raised. Practical implications: This article aims to bridge the gap between speculations on the effects of Covid-19 on financial external audits and the actual effects of Covid-19. This provides insight into what the real challenges faced by auditors were during the pandemic and how significant they were to conduct an effective audit over this period. Through this, understanding future audits in stressed environments, such as pandemics, can be better managed. Originality/value: To the author’s knowledge, no such research examining the actual effects of Covid-19 on external financial audits have yet been conducted and this research, therefore, adds to the current body of academic research by enhancing the value of audit reporting and adding credibility to the current speculative literature around the perceived effects of Covid-19 on audits.
{"title":"The Auditor’s Report Tests Positive for Covid-19","authors":"C. Cherry","doi":"10.25159/1998-8125/10250","DOIUrl":"https://doi.org/10.25159/1998-8125/10250","url":null,"abstract":"Purpose/objectives: The objectives of this article are to obtain an understanding of difficulties encountered by auditors during the Covid-19 pandemic and to determine how they addressed these difficulties. This is to add to and verify the accuracy of the existing body of literature that speculates on the possible effects of the pandemic on external auditors.\u0000Design/methodology/approach: Literature from several professional bodies, practitioners and academics is examined. The effects of Covid-19 on audits are explored through examining auditors’ reports, including the Key Audit Matters (KAMs) raised by auditors during audits conducted since the start of the pandemic.\u0000Findings: A selection of audit reports of companies listed on the Johannesburg Stock Exchange (JSE) reveals how Covid-19 plagued the audits of 2020. The audit reports themselves confirm these concerns and reveal that Covid-19 is not only linked to a significant number of key audit matters but could also be significantly associated with the type of key audit matter raised.\u0000Practical implications: This article aims to bridge the gap between speculations on the effects of Covid-19 on financial external audits and the actual effects of Covid-19. This provides insight into what the real challenges faced by auditors were during the pandemic and how significant they were to conduct an effective audit over this period. Through this, understanding future audits in stressed environments, such as pandemics, can be better managed.\u0000Originality/value: To the author’s knowledge, no such research examining the actual effects of Covid-19 on external financial audits have yet been conducted and this research, therefore, adds to the current body of academic research by enhancing the value of audit reporting and adding credibility to the current speculative literature around the perceived effects of Covid-19 on audits.","PeriodicalId":44582,"journal":{"name":"Southern African Business Review","volume":"29 1","pages":""},"PeriodicalIF":0.6,"publicationDate":"2022-03-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87429634","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}
Purpose of the study: This paper investigates the impact of bank competition on access to finance by informal firms in 14 sub-Saharan African countries, using World Bank enterprise survey data. Access to finance is one of the main factors identified as hindering the growth of opaque borrowers, who are generally characterised by poor financial transparency. Methodology: This study uses a discrete binary choice probit model to estimate the probability or likelihood of accessing finance, conditional on the level of bank competition and other firm-level characteristics. Findings: Results show that the impact depends on the competition measure used. The Lerner index shows a positive relationship supporting the information-based hypothesis, while the most robust competition indicator, the Boone index, is negative in line with the market power hypothesis. These results also show that reducing or minimising information asymmetry using public credit registries is good for enhancing financial access. Research implications: Improving the competitiveness of the banking sector by encouraging the entrance of more players should be promoted without compromising the soundness of the sector. Measures should be introduced to control anti-competitive behaviour in the banking industry. Originality: The informal sector contributes close to 50% to Africa’s GDP and 80% towards employment and, therefore, strategies aimed at eliminating the obstacles faced by these firms are important for livelihood protection. Many studies done on the African banking industry have generally found it to be less competitive and this affects financial access since banks tend to be risk averse in such settings. There are also few studies that have analysed the relationship between bank competition and credit access in the informal sector, mostly because publicly available data on these firms are scarce.
{"title":"Bank Competition and Credit Access: The Case of Informal Firms in Sub-Saharan Africa","authors":"B. Moyo, A. Sibindi","doi":"10.25159/1998-8125/6799","DOIUrl":"https://doi.org/10.25159/1998-8125/6799","url":null,"abstract":"Purpose of the study: This paper investigates the impact of bank competition on access to finance by informal firms in 14 sub-Saharan African countries, using World Bank enterprise survey data. Access to finance is one of the main factors identified as hindering the growth of opaque borrowers, who are generally characterised by poor financial transparency.\u0000Methodology: This study uses a discrete binary choice probit model to estimate the probability or likelihood of accessing finance, conditional on the level of bank competition and other firm-level characteristics.\u0000Findings: Results show that the impact depends on the competition measure used. The Lerner index shows a positive relationship supporting the information-based hypothesis, while the most robust competition indicator, the Boone index, is negative in line with the market power hypothesis. These results also show that reducing or minimising information asymmetry using public credit registries is good for enhancing financial access.\u0000Research implications: Improving the competitiveness of the banking sector by encouraging the entrance of more players should be promoted without compromising the soundness of the sector. Measures should be introduced to control anti-competitive behaviour in the banking industry.\u0000Originality: The informal sector contributes close to 50% to Africa’s GDP and 80% towards employment and, therefore, strategies aimed at eliminating the obstacles faced by these firms are important for livelihood protection. Many studies done on the African banking industry have generally found it to be less competitive and this affects financial access since banks tend to be risk averse in such settings. There are also few studies that have analysed the relationship between bank competition and credit access in the informal sector, mostly because publicly available data on these firms are scarce.","PeriodicalId":44582,"journal":{"name":"Southern African Business Review","volume":"12 1","pages":""},"PeriodicalIF":0.6,"publicationDate":"2021-09-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90540812","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}
Research purpose: This study aims to determine the reasons for the low penetration rate of the South African co-operative financial institution (CFI) sector; and to recommend a valid and reliable tool for assessing key success factors of CFIs. Little research has previously been undertaken on why the South African CFI sector remains small, with a penetration rate of just 0.1%. Research design, approach and method: This study used a quantitative design to evaluate objective data. A structured questionnaire was used to collect data from 303 consumers around Tshwane, and from 20 registered CFI representatives around the country. The SPSS software was used to analyse the data. Main findings: The study revealed that the low penetration rate of the CFI sector is due to consumers’ lack of knowledge about them, their products and activities. An assessment model has been proposed to help address the issue. Practical implication: The assessment model could be a useful tool for CFIs and other micro-credit lenders, as it aims to assist in measuring the effectiveness of their innovation and entrepreneurial strategies and then to initiate the necessary steps and training programmes to address the problem. Original value: The study findings provide empirical evidence on possible reasons for the low penetration rate of South African CFIs; and the proposed assessment model may help to improve membership growth and performance in the sector; particularly as no prior study has been conducted to determine the possible reasons for such a low penetration rate of SA co-operative financial institutions.
{"title":"Assessment Model Measuring Key Success Factors in Co-operative Financial Institutions to Improve Penetration Rate","authors":"B. Ismaila, V. Gamede","doi":"10.25159/1998-8125/8978","DOIUrl":"https://doi.org/10.25159/1998-8125/8978","url":null,"abstract":"Research purpose: This study aims to determine the reasons for the low penetration rate of the South African co-operative financial institution (CFI) sector; and to recommend a valid and reliable tool for assessing key success factors of CFIs. Little research has previously been undertaken on why the South African CFI sector remains small, with a penetration rate of just 0.1%.\u0000Research design, approach and method: This study used a quantitative design to evaluate objective data. A structured questionnaire was used to collect data from 303 consumers around Tshwane, and from 20 registered CFI representatives around the country. The SPSS software was used to analyse the data.\u0000Main findings: The study revealed that the low penetration rate of the CFI sector is due to consumers’ lack of knowledge about them, their products and activities. An assessment model has been proposed to help address the issue.\u0000Practical implication: The assessment model could be a useful tool for CFIs and other micro-credit lenders, as it aims to assist in measuring the effectiveness of their innovation and entrepreneurial strategies and then to initiate the necessary steps and training programmes to address the problem.\u0000Original value: The study findings provide empirical evidence on possible reasons for the low penetration rate of South African CFIs; and the proposed assessment model may help to improve membership growth and performance in the sector; particularly as no prior study has been conducted to determine the possible reasons for such a low penetration rate of SA co-operative financial institutions.","PeriodicalId":44582,"journal":{"name":"Southern African Business Review","volume":"3 1","pages":""},"PeriodicalIF":0.6,"publicationDate":"2021-09-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90659178","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}
Purpose: South Africa is a water-scarce country and efforts to conserve water should focus on both demand and supply management. The study that directed this article, investigated the predictors of water conservation intention by hotel guests by extending the Theory of Planned Behaviour (TPB). Two constructs (environmental concern and water conservation activities in everyday life) were added to the TPB to develop a unique model of predictors of water conservation intention by hotel guests. The indirect effect of environmental concern was also examined. Methodology: The study followed a quantitative research design. The cross-sectional survey method was used for data collection from hotel guests and the Partial Least Square Structural Equation Modelling (PLS SEM) was used for data analysis. Findings: The findings of the study indicated that the extended TPB model is useful in predicting the water conservation intention of hotel guests. In addition, attitude, perceived behavioural control and water conservation activities in everyday life mediate the relationship between environmental concern and intention. Research implications: Theoretically, the study developed and tested a unique model of water conservation intention by extending the TPB. Managerial implications that focus on both management and guests are discussed. Originality: The study developed and tested a unique model of predictors of water conservation intention by extending the TPB with two constructs and examining the mediation effect.
{"title":"Predictors of Hotel Guests’ Water Conservation Intention in South Africa","authors":"O. Fatoki","doi":"10.25159/1998-8125/9249","DOIUrl":"https://doi.org/10.25159/1998-8125/9249","url":null,"abstract":"Purpose: South Africa is a water-scarce country and efforts to conserve water should focus on both demand and supply management. The study that directed this article, investigated the predictors of water conservation intention by hotel guests by extending the Theory of Planned Behaviour (TPB). Two constructs (environmental concern and water conservation activities in everyday life) were added to the TPB to develop a unique model of predictors of water conservation intention by hotel guests. The indirect effect of environmental concern was also examined.\u0000Methodology: The study followed a quantitative research design. The cross-sectional survey method was used for data collection from hotel guests and the Partial Least Square Structural Equation Modelling (PLS SEM) was used for data analysis.\u0000Findings: The findings of the study indicated that the extended TPB model is useful in predicting the water conservation intention of hotel guests. In addition, attitude, perceived behavioural control and water conservation activities in everyday life mediate the relationship between environmental concern and intention.\u0000Research implications: Theoretically, the study developed and tested a unique model of water conservation intention by extending the TPB. Managerial implications that focus on both management and guests are discussed.\u0000Originality: The study developed and tested a unique model of predictors of water conservation intention by extending the TPB with two constructs and examining the mediation effect.","PeriodicalId":44582,"journal":{"name":"Southern African Business Review","volume":"73 1","pages":""},"PeriodicalIF":0.6,"publicationDate":"2021-09-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80458211","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}
Purpose: Financial inclusion is increasingly being recognised as having an important influence on household wellbeing, as it provides resources and income, enhances consumption and investment in productive assets and stimulates overall economic growth. In this paper, we examine the impact of financial inclusion on household wellbeing in Namibia. Design/methodology: Using data extracted from the 2017 Namibia Financial Inclusion Survey, a UNDP approach for computing human development indices is used to generate a wellbeing index. Two-stage least squares regression analysis is employed to address the potential endogeneity associated with financial inclusion. Findings: The results suggest the positive and significant effects of financial inclusion on household wellbeing. The effects are consistent across location and gender when different methodological approaches are applied. Household characteristics such as education, income, and financial decisions, are important determinants of household wellbeing. Implications: National and international agencies are encouraged to promote policies that enhance the ability of both the public and private sector to innovate and expand financial services to vulnerable populations. Originality/value: An inclusive financial system is key in determining the level of household wellbeing, but many studies have utilised macro time-series data as opposed to household data, to tease out this relationship.
{"title":"Financial Inclusion and Household Wellbeing in Namibia","authors":"A. Mukong, Elina M. Amadhila","doi":"10.25159/1998-8125/7866","DOIUrl":"https://doi.org/10.25159/1998-8125/7866","url":null,"abstract":"Purpose: Financial inclusion is increasingly being recognised as having an important influence on household wellbeing, as it provides resources and income, enhances consumption and investment in productive assets and stimulates overall economic growth. In this paper, we examine the impact of financial inclusion on household wellbeing in Namibia.\u0000Design/methodology: Using data extracted from the 2017 Namibia Financial Inclusion Survey, a UNDP approach for computing human development indices is used to generate a wellbeing index. Two-stage least squares regression analysis is employed to address the potential endogeneity associated with financial inclusion.\u0000Findings: The results suggest the positive and significant effects of financial inclusion on household wellbeing. The effects are consistent across location and gender when different methodological approaches are applied. Household characteristics such as education, income, and financial decisions, are important determinants of household wellbeing.\u0000Implications: National and international agencies are encouraged to promote policies that enhance the ability of both the public and private sector to innovate and expand financial services to vulnerable populations.\u0000Originality/value: An inclusive financial system is key in determining the level of household wellbeing, but many studies have utilised macro time-series data as opposed to household data, to tease out this relationship.","PeriodicalId":44582,"journal":{"name":"Southern African Business Review","volume":"106 1","pages":""},"PeriodicalIF":0.6,"publicationDate":"2021-09-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84593534","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}
Context: Corporate governance in South African municipalities is severely lacking and retrograding. The audit committee should essentially be an oversight committee that acts on behalf of the municipal council to ensure that key controls are operating, ethical practices are reinforced, key accounting estimates and judgements are properly made, and that internal and external audits are effective. However, the Municipal Finance Management Act requires that the audit committee acts in an advisory capacity to among others, the municipal management. This statutory requirement is in contrast to international governance code best practice for audit committees. Purpose: The aim of this study was to establish how municipal audit committee members perceive their role and whether they realise the self-review threat brought about by the role conflict between legislation and internationally accepted best practice. Design: A web-based survey questionnaire was used to collect primary data from municipal audit committee members. Findings: The study found that municipal audit committee members seem to be unaware of the self-review threat their perspectives on their role hold. Practical implications: Results of the study may assist policy makers and other stakeholders in drafting regulations and legislation governing the functioning and establishment of independent municipal audit committees in South Africa. Originality: Although the conflicting roles of assurance (oversight) and consulting (advisory) have received attention in the disciplines of external auditing and internal auditing, similar attention is needed in the case of South African municipal audit committees.
{"title":"The Municipal Audit Committee Self-review Threat: The South African Dilemma","authors":"L. Erasmus, Thabo Matsimela","doi":"10.25159/1998-8125/6332","DOIUrl":"https://doi.org/10.25159/1998-8125/6332","url":null,"abstract":"Context: Corporate governance in South African municipalities is severely lacking and retrograding. The audit committee should essentially be an oversight committee that acts on behalf of the municipal council to ensure that key controls are operating, ethical practices are reinforced, key accounting estimates and judgements are properly made, and that internal and external audits are effective. However, the Municipal Finance Management Act requires that the audit committee acts in an advisory capacity to among others, the municipal management. This statutory requirement is in contrast to international governance code best practice for audit committees.\u0000Purpose: The aim of this study was to establish how municipal audit committee members perceive their role and whether they realise the self-review threat brought about by the role conflict between legislation and internationally accepted best practice.\u0000Design: A web-based survey questionnaire was used to collect primary data from municipal audit committee members.\u0000Findings: The study found that municipal audit committee members seem to be unaware of the self-review threat their perspectives on their role hold.\u0000Practical implications: Results of the study may assist policy makers and other stakeholders in drafting regulations and legislation governing the functioning and establishment of independent municipal audit committees in South Africa.\u0000Originality: Although the conflicting roles of assurance (oversight) and consulting (advisory) have received attention in the disciplines of external auditing and internal auditing, similar attention is needed in the case of South African municipal audit committees.","PeriodicalId":44582,"journal":{"name":"Southern African Business Review","volume":"20 1","pages":""},"PeriodicalIF":0.6,"publicationDate":"2021-04-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73406097","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}
Purpose: The aim of this study was to investigate the mediating role of knowledge sharing on social capital and product innovation among tourism SMEs in Zimbabwe. Design/methodology/approach: A quantitative approach was adopted in this study and data was collected using an online survey, from owners and managers of small and medium enterprises in the tourism industry. The respondents were drawn using a simple random sampling technique from a database created and maintained by the Zimbabwe Tourism Authority of Sanganai/Hlanganani World Tourism Expo participants. Covariance-based structural equation modelling was used to analyse the data and test the hypotheses proposed. Findings: The study found that both interorganisational trust and social reciprocity enhance product innovation in the tourism sector. It was also revealed that knowledge-sharing capability partially mediates the relationship between interorganisational trust and social reciprocity and product innovation. Research limitations/implications: By focusing on interorganisational trust and social reciprocity, this study was limited to the relational dimension of social capital, and this offers scope for future research. More research needs to be undertaken to explore the role of interorganisational trust and social reciprocity across other dimensions of social capital other than the relational attributes. It is also necessary to conduct longitudinal studies to capture variations in time and across sectors using more robust measures. Originality/value: The study expands on the existing line of scholarly work by providing a social dimension of the antecedents of product innovation. The findings suggest in the wake of resource limitation, firms in Zimbabwe may rely on interorganisational trust and social reciprocity to foster superior product innovation. In this knowledge-intensive business environment, this study also adds value by providing empirical evidence for the mediating role of knowledge-sharing capability in the relationship between interorganisational trust and social reciprocity, and product innovation.
{"title":"The Mediating Role of Knowledge Sharing on Social Capital and Product Innovation among Tourism SMEs","authors":"David Pooe, W. Munyanyi","doi":"10.25159/1998-8125/7721","DOIUrl":"https://doi.org/10.25159/1998-8125/7721","url":null,"abstract":"Purpose: The aim of this study was to investigate the mediating role of knowledge sharing on social capital and product innovation among tourism SMEs in Zimbabwe.\u0000Design/methodology/approach: A quantitative approach was adopted in this study and data was collected using an online survey, from owners and managers of small and medium enterprises in the tourism industry. The respondents were drawn using a simple random sampling technique from a database created and maintained by the Zimbabwe Tourism Authority of Sanganai/Hlanganani World Tourism Expo participants. Covariance-based structural equation modelling was used to analyse the data and test the hypotheses proposed.\u0000Findings: The study found that both interorganisational trust and social reciprocity enhance product innovation in the tourism sector. It was also revealed that knowledge-sharing capability partially mediates the relationship between interorganisational trust and social reciprocity and product innovation.\u0000Research limitations/implications: By focusing on interorganisational trust and social reciprocity, this study was limited to the relational dimension of social capital, and this offers scope for future research. More research needs to be undertaken to explore the role of interorganisational trust and social reciprocity across other dimensions of social capital other than the relational attributes. It is also necessary to conduct longitudinal studies to capture variations in time and across sectors using more robust measures.\u0000Originality/value: The study expands on the existing line of scholarly work by providing a social dimension of the antecedents of product innovation. The findings suggest in the wake of resource limitation, firms in Zimbabwe may rely on interorganisational trust and social reciprocity to foster superior product innovation. In this knowledge-intensive business environment, this study also adds value by providing empirical evidence for the mediating role of knowledge-sharing capability in the relationship between interorganisational trust and social reciprocity, and product innovation.","PeriodicalId":44582,"journal":{"name":"Southern African Business Review","volume":"37 1","pages":""},"PeriodicalIF":0.6,"publicationDate":"2021-04-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78370199","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}
Background: South Africa is a corporate governance pioneer. The King Reports have offered guidance to listed companies in the country since 1994 and unlisted entities since 2016. In the drive for corporate change, attention is increasingly placed on the role of activist shareholders, in particular institutional investors, given the size of their investments. Purpose/objectives: This study aimed to gauge institutional investors’ views on the differences between the King III and IV Reports related to positive aspects and room for improvement. Design/methodology/approach: Semi-structured interviews were conducted with selected institutional investors. Themes were then derived by conducting an interpretive thematic analysis. Findings: Interviewees commended the format and scope of the latest King Report but suggested that outcomes-based training should be offered to directors to ease implementation. Executive remuneration, director independence and auditor independence were highlighted as areas that require attention. Some interviewees questioned whether the current non-binding vote on executive remuneration is sufficient. They suggested that executive remuneration should be tied to performance outcomes across the triple bottom line. Participants recommended that director independence should be considered on a case-by-case basis, instead of strictly applying King IV’s suggested tenure guideline. Furthermore, mandatory audit firm rotation could enhance auditor independence, and hence transparency. Stakeholders are encouraged to demand enhanced transparency on corporate matters to enable more informed decision-making.
{"title":"Reflecting on Corporate Governance in South Africa: Lessons Learned and the Way Forward","authors":"Marilee van Zyl, Nadia Mans-Kemp","doi":"10.25159/1998-8125/6654","DOIUrl":"https://doi.org/10.25159/1998-8125/6654","url":null,"abstract":"Background: South Africa is a corporate governance pioneer. The King Reports have offered guidance to listed companies in the country since 1994 and unlisted entities since 2016. In the drive for corporate change, attention is increasingly placed on the role of activist shareholders, in particular institutional investors, given the size of their investments.\u0000Purpose/objectives: This study aimed to gauge institutional investors’ views on the differences between the King III and IV Reports related to positive aspects and room for improvement.\u0000Design/methodology/approach: Semi-structured interviews were conducted with selected institutional investors. Themes were then derived by conducting an interpretive thematic analysis.\u0000Findings: Interviewees commended the format and scope of the latest King Report but suggested that outcomes-based training should be offered to directors to ease implementation. Executive remuneration, director independence and auditor independence were highlighted as areas that require attention. Some interviewees questioned whether the current non-binding vote on executive remuneration is sufficient. They suggested that executive remuneration should be tied to performance outcomes across the triple bottom line. Participants recommended that director independence should be considered on a case-by-case basis, instead of strictly applying King IV’s suggested tenure guideline. Furthermore, mandatory audit firm rotation could enhance auditor independence, and hence transparency. Stakeholders are encouraged to demand enhanced transparency on corporate matters to enable more informed decision-making.","PeriodicalId":44582,"journal":{"name":"Southern African Business Review","volume":"61 1","pages":""},"PeriodicalIF":0.6,"publicationDate":"2020-12-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78155009","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}
Carla Haarburger, Y. Yasseen, Irfaan Omarjee, Zakiyyah Varachia
Purpose/objectives: The purpose of this paper is to investigate the quality of financial reporting in South Africa and India. The accounting profession has been placed in the spotlight as a result of the high number of public failures and corporate collapses. The importance of high-quality financial reporting has been demonstrated not only by past corporate failures, but also due to the scarce level of capital that is required to be allocated within capital markets. Design/methodology/approach: The study employed a 21-index scorecard developed by Beest, Braam, and Boelens (2009) to score the application of the qualitative characteristics in the financial statements of 50 entities from the Johannesburg Stock Exchange (JSE) and Bombay Stock Exchange (BSE). The entities were selected based on the highest market capitalisation entities for the 2017 year-end. Findings: The main finding of this study is that South African companies apply the qualitative characteristics of financial reporting to a higher degree than Indian companies. However, timeliness was a characteristic where India outperformed South Africa. Originality/value: Studies have focused on the type of information presented in annual reports rather than on the quality of information. The need for high quality information is imperative, given the role played in capital allocation particularly in emerging economies. As such, the study contributes to the body of knowledge regarding the quality of financial information with a focus on emerging economies.
{"title":"Assessment of the Financial Reporting Quality of South African and Indian Listed Companies","authors":"Carla Haarburger, Y. Yasseen, Irfaan Omarjee, Zakiyyah Varachia","doi":"10.25159/1998-8125/7794","DOIUrl":"https://doi.org/10.25159/1998-8125/7794","url":null,"abstract":"Purpose/objectives: The purpose of this paper is to investigate the quality of financial reporting in South Africa and India. The accounting profession has been placed in the spotlight as a result of the high number of public failures and corporate collapses. The importance of high-quality financial reporting has been demonstrated not only by past corporate failures, but also due to the scarce level of capital that is required to be allocated within capital markets.\u0000Design/methodology/approach: The study employed a 21-index scorecard developed by Beest, Braam, and Boelens (2009) to score the application of the qualitative characteristics in the financial statements of 50 entities from the Johannesburg Stock Exchange (JSE) and Bombay Stock Exchange (BSE). The entities were selected based on the highest market capitalisation entities for the 2017 year-end.\u0000Findings: The main finding of this study is that South African companies apply the qualitative characteristics of financial reporting to a higher degree than Indian companies. However, timeliness was a characteristic where India outperformed South Africa.\u0000Originality/value: Studies have focused on the type of information presented in annual reports rather than on the quality of information. The need for high quality information is imperative, given the role played in capital allocation particularly in emerging economies. As such, the study contributes to the body of knowledge regarding the quality of financial information with a focus on emerging economies.","PeriodicalId":44582,"journal":{"name":"Southern African Business Review","volume":"7 1","pages":""},"PeriodicalIF":0.6,"publicationDate":"2020-12-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75605060","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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