Browsing by Author "Gossel, Sean J"

Now showing 1 - 14 of 14
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    An analysis of Candlestick charting: the predictive power of the three-outside-up and three-outside-down Candlestick patterns in the context of small capitalization stocks in the USA
    (2015) Hutton, Simon; Gossel, Sean J
    This paper examines the predictive power of two Japanese Candlestick patterns for a 49-stock sample of small capitalization stocks drawn from the S&P 600 for the period 1 June 2005 to 15 May 2015. Using the normal approximation to the binomial for statistical testing and a dynamic holding period strategy to test the threeoutside- up and three-outside-down patterns, this study contradicts earlier works that used dynamic holding period strategies for large capitalization stocks and showed moderate levels of statistically significant predictive power. This study finds no statistically significant evidence of the predictive power of the three-outside-up and three-outside- down patterns for the sample and time period considered. Hence, the findings imply that there is no evidence to challenge the Efficient Market Hypothesis.
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    An analysis of push and pull factors of capital flows in a regional trading bloc
    (2018) Mudyazvivi, Elton; Gossel, Sean J
    Inflows of Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI) into Sub Saharan Africa (SSA) between 2000 and 2014 remained a minute fraction (at only 2% and 1% respectively) of global inflows. This study seeks to explain this phenomenon by examining the push (global) and pull (domestic) factors that may help to explain inflows of FDI and FPI in SSA and the mechanisms through which these factors affect inflows (the how). As ongoing regional integration efforts in Africa through trading blocs, the study also discusses the role of regional trading blocs in explaining capital flows into SSA. In the process, the research challenges some of the established theories and contributes to policy for managing international capital inflows. The study identifies possible explanatory variables from existing theory and empirical studies. Data on possible determinants of FDI and FPI is largely extracted from the World Bank and IMF databases. The determinants considered are macro-economic, infrastructural, institutional, resource endowment and geographical related. These are modeled into econometric model of FDI and FPI. Several hypotheses on the possible determinants are then tested using panel regressions with random effects. The results indicate that SSA's FDI during the period reviewed is mainly pulled by macroeconomic dynamics, infrastructure and human resources factors and pushed by global macroeconomic performance. Likewise, FPI is largely pulled by GDP and infrastructure factors. The results further show that FDI and FPI inflows in regional trading blocs of SADC, COMESA and ECOWAS are affected by different risk, return, macroeconomic, trade and distance factors. The effects of factors such as distance and macroeconomic factors also vary across the regional trading blocs, suggesting their importance of these blocs in capital flows.
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    Causal linkages between FDI, financial sector development, remittances, domestic savings and economic growth in South Africa
    (2014) Mbu, John; Gossel, Sean J
    This report examines the causal linkages between FDI, financial sector development, savings, remittances and economic growth in South Africa using annual time series data from 1970 to 2010. The results show that none of the financial sector variables directly lead to economic growth. However, economic growth is found to stimulate FDI and financial sector development. With regards to the causal linkages between the different financial factors, the results show that savings have highly significant causal linkages with FDI and financial sector development. In addition, the results suggest that savings have a moderately significant causal relationship with remittances. Furthermore, the results indicate that FDI has a weakly unidirectional causal relationship with financial sector development, and the direction of causality runs from FDI. The findings also suggest that remittances have a weakly significant relationship with FDI. Thus, these findings suggest that policy-makers in South Africa should aim principally at increasing domestic savings and economic growth rates since increasing domestic savings will significantly increase FDI, financial sector development and remittances, and increases in the economic growth rates will significantly increase financial sector development and FDI.
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    Determinants of economic growth In Sub-Saharan Africa: decomposition of exports and imports
    (2017) Oyebanjo, Olawale; Gossel, Sean J
    This dissertation examines the impact of export and import components on economic growth in 18 Sub-Saharan African countries over the period of 1995-2015. This study uses a neoclassic economic growth model containing GDP, export components, import components, export concentration index, capital and labour force as variables of analysis. The results of fixed effects estimations show that both exports and imports contribute significantly to economic growth. On a specific level, growth in raw material exports, and not manufactured exports, is significantly associated with GDP growth while growth in manufactured imports, and not raw material imports, is significantly associated with GDP growth. The export concentration index is found to have no significant relationship with GDP growth. In addition, the results find that capital formation has a more significant influence on economic growth than labour does.
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    The effect of capital flows on the Kenyan economy
    (2014) Muthuuri, Njoki; Gossel, Sean J
    Foreign capital inflows (FCI) play an important role in the economic development of the recipient country as they fund investments and promote growth. However, the size and composition of such inflows are determined on the basis of country specific requirements. The study investigates the impact of capital inflows on the economy of Kenya at a time when the government implemented economic reform measures to stabilize the economy and restore sustainable growth. More specifically, the study examines the impact of foreign capital flows remittances such as overseas workers remittance, official development aid, and external debt, on selected macro-economic variables using monthly time series data and a single-equation empirical approach. The study findings reveal that some forms of FCI are not influenced by the macro economic variables in the country but by other factors such as political stability and policy variables.
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    Foreign direct investment and economic growth in South Africa: a sector level causality analysis
    (2015) Maseko, Michael; Gossel, Sean J
    Many empirical studies hypothesise that foreign direct investment (FDI) has a positive impact on economic growth. As a result, FDI has been targeted by many countries in their attempts to increase their standards of economic growth. South Africa (like many developing economies) is not a stranger to this phenomenon. However, there is a dearth of literature analysing the relationship between FDI and economic growth at a sector level in South Africa. This thesis analyses the causal relationship between FDI and economic growth in South Africa at a sector level comprising primary, secondary and tertiary industries. This study applied a more robust and asymptotically reliable Toda-Yamamoto-Dolado-Lutkephol (1995) methodology in analysing the causal relationship thus addressing the potential biases and asymptotic unreliability relating the traditional Granger causality technique. The report shows that FDI Granger-causes growth in primary, secondary, tertiary sectors and at an aggregate level. In addition, growth was found to Granger-cause FDI at tertiary and aggregate level. On the other hand growth does not Granger-cause FDI at primary and secondary sector level. The only bi-directional relationship that could be observed was at the tertiary and aggregate sector level, whereas at primary and secondary sector level, the relationship was found to be unidirectional.
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    The impact of financial development on private investment in South Africa
    (2017) Hashikutuva, Lovisa Ndapewelao; Gossel, Sean J
    The study analysed the impact of financial development (measured by depth, stability, efficiency and access) on private investment in South Africa over the period 1977 (Q1) to 2015 (Q4). Autoregressive distributive lag model was used in addition to conducting further tests to establish the efficiency of the model using standard diagnostics which confirmed the overall significance of the model. The results find the relationship between financial development and private investment in South Africa to be long-run in nature. The statistically significant variables found to explain the variance of private investment for South Africa in both the short- and long-run are market capitalization, domestic credit, growth in output as well as trade openness. Interest rate spread was found significant only in the short-run.
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    The impact of public spending on roads infrastructure on Malawi's economic growth
    (2015) Makhwatha, Alex Simeon; Gossel, Sean J
    Public expenditure has been a cardinal objective of all successive governments since Malawi gained its independence in 1964. Successive administrations have on different occasions made attempts to direct government spending towards achieving objectives that have direct bearing on its populace. According to Keynesian view, the increase in public spending on socio-economic and physical structures is important and encourages economic growth. However, Classical economists on the other hand argue that the increase in public expenditure may shift resources from the productive private sector to public sector which they believe is unproductive and hence, crowd out overall performance of the economy. These views indicate that policymakers worldwide including Malawi are under debate whether increase in public spending helps or hinders economic growth. Applying ADF and KPSS tests, Johansen-Juselius co-integration multivariate procedure and TYDL Granger causality test, this study investigates the relationship between government expenditure on roads infrastructure and GDP in Malawi using time series data spanning from 1978 to 2010. ADF and KPSS tests indicate that the series under investigation are integrated of order one (i.e. I(1)). The results of the Johansen co-integration tests indicate a long-run relationship between the roads expenditure and economic growth. The TYDL test indicates the existence of unidirectional causality running from roads expenditure and economic growth which supports Keynes hypothesis that government spending affects economic growth. The study, therefore, concludes that government spending on roads infrastructure causes economic growth, which confirms the main goal of MGDS that aims at achieving economic growth through infrastructure development. Based on these results, the study recommends that government should ensure that both capital and recurrent expenditure are properly managed to accelerate economic growth. More so, Government should promote efficient resource allocation on human capital development by encouraging more private participation to ensure productivity for intensive economic growth.
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    The link between sources of public spending and growth in sub-Saharan Africa
    (2012) Museru, Malimu H; Toerien, Francois; Gossel, Sean J
    The purpose of this investigation is twofold. First, I study the effect of the sources of public spending on its level. I argue that any impact on public spending from any of its sources (including foreign aid) should be carried over to GDP per capita growth. Of the three sources of public spending (namely central government revenue, foreign aid and external debt), this study finds central government revenue to have the most significant impact on public spending levels. ... Second, the study analyses the link between sources of public spending and growth. After correcting for the potential endogeneity of aid, there is strong evidence to suggest that Sub-Saharan African countries have benefited significantly from the decades of development assistance.
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    A macroeconometric analysis of South Africa’s post-liberalisation capital inflow components
    (2011) Gossel, Sean J; Biekpe, Nicholas
    In common with emerging countries in Asia and Latin America, South Africa received substantial capital inflows following socio-political and financial liberalisation in the mid-1990s. However, unlike many other emerging countries, the bulk of South Africa’s post-liberalisation inflows have been in the traditionally short-term forms of portfolio and other investment. Hence, in this thesis, a macroeconometric analysis of South Africa’s post-liberalisation capital flow components is conducted to investigate the extent to which their divergent impacts have complicated, or even rendered impotent, the dual policy goals of attracting capital inflows on the one hand, while mitigating any significant detrimental impacts on the other. The results of the analysis show that foreign direct investment is responsive to domestic factors, while portfolio and other flows respond to a combination of domestic and foreign factors. However, domestic business cycle fluctuations are found to have a greater effect on the capital outflows than the capital inflows, and are thus associated with heightened capital flight and repatriation during expansionary phases. Although the capital flow components are found to have varied effects on South Africa’s macroeconomy, transmission mechanisms, nominal Rand/U.S. Dollar exchange rate, and economic growth dynamics, the ‘hot’ flows are found to demonstrate greater boom-bust characteristics compared to foreign direct investment. Conventional economic theory posits that the destabilising effects can be controlled using fiscal and monetary policy mechanisms. However, analysis of the cyclical relationships between the capital flows and fiscal policy finds that net direct investment and net other investment tend to be counter-cyclically associated with fiscal policy, while net portfolio investment tends to be acyclical, indicating that the bulk of South Africa’s net capital inflows do not have a significant cyclical relationship with fiscal policy. In addition, net direct investment and net other investment are found to have inconsistent cyclical relationships with monetary policy, while net portfolio investment tends to be procyclical. Thus, this research finds that although South Africa has been able to use exchange rate flexibility and sterilisation to neutralise the early stages of capital inflows, the divergent characteristics of the country’s post-liberalisation capital flow components have limited the fiscal and monetary policy options available to mitigate the detrimental capital flow effects arising from structural factors.
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    The relationship between commodity price volatility and exchange rate stability in a single commodity dependent economy: The case of Zambia
    (2017) Anderson, Larry; Gossel, Sean J
    This study examines the empirical relationship between monthly spot copper price movements and monthly Zambian Kwacha / US Dollar spot exchange rates, for the period January 2005 to February 2015. The ARDL bounds short-run estimate reveals there is both positive and negative coefficient interaction of copper price movements on the exchange rates in the short-run. However, the overall impact of copper prices on the exchange rate, is not significant in the short-run. The ARDL bounds test also confirms the presence of a long-run relationship between copper prices and the exchange rate. The coefficient estimates reveal that both the consumer price index and the terms-of-trade have a statistical weak impact on the exchange rate in both the short and long run. The study finds that Zambia's GDP has a negative impact on the exchange rate in the short-run, but has a statistically significant positive long-run effect. China's GDP, is used as a proxy to capture foreign demand for copper, it has both a positive and negative interaction on the exchange rate in the short-run and a negative effect in the long-run.
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    Relationship between electricity prices, consumption and economic growth in South Africa
    (2020) Gasealahwe, Boitumelo; Gossel, Sean J
    This study analyses the relationship between electricity prices, consumption and economic growth at national and per sector levels in South Africa over the period from 2006 to 2017 using the auto-regressive distributed lag (ARDL) bounds testing approach and error correction model (ECM). With regards to electricity consumption, in the mining and residential sectors, the relationship between electricity consumption and GDP is insignificant and thus adheres to the neutrality hypothesis. In contrast, in the services, transportation and industrial sectors, there is a positive relationship between GDP and electricity consumption, which adheres to the conservative hypothesis. Lastly, the agricultural sector has a positive relationship between electricity consumption and economic growth in the short run, and thus adheres to the growth hypothesis. In the case of electricity prices and electricity consumption, the results find that the relationship is insignificant on a national basis and this is true for the services, transport, residential and agricultural sectors too, whereas there is a negative association with electricity consumption in the mining sector while the industrial sector has a negative association with electricity prices. The results for the relationship between electricity prices and electricity consumption show that in the national, services sector, transport sector, residential and agricultural sectors, electricity consumption has an insignificant relationship with the electricity prices. This is in contrast to the mining sector, whose electricity consumption is negatively associated with electricity prices while the industrial sector electricity consumption has a positive and significant relationship with electricity prices. With regards to the relationship between electricity prices and GDP, the results find that there is an elastic association in the national, services, mining, and industrial sectors with a negative impact on the GDP in the long run. In contrast, the relationship between electricity prices and GDP in the transport and residential sectors is insignificant.
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    The relationship between corruption, ease of doing business and FDI inflows in SADC countries
    (2021) Matete, Desmond; Gossel, Sean J
    Globalisation and trade integration have positioned Foreign Direct Investment (FDI) as a development imperative for many developing countries, including Southern African Development Community (SADC) economies. Despite concerted efforts both at individual country level and at regional level, FDI flows to the SADC region have declined compared to other regions in the world. The main reasons posited for SADC's inability to attract and retain FDI include negative risk perceptions; a weak ease of doing business environment, and endemic corruption. Hence, the study seeks to investigate the relationship between FDI inflows and corruption and ease of doing business in SADC. The research applies Generalised Method of Moments (GMM) analysis to all 16 SADC countries over a period of 2010 to 2019. The results show that although both corruption and ease of doing business are significantly and positively relate to FDI inflows in SADC, ease of doing business affects FDI to a greater extent compared to corruption. In addition, the inclusion of the interaction between corruption and ease of doing business shows that FDI inflows are more closely attracted by ease of doing business than by corruption.
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    The relationship between FDI, political and institutional risk in Sub-Saharan Africa
    (2021) Matima, Zorodzai; Gossel, Sean J
    This study uses Generalised Meod of Moments to investigate the roles of political risk and institutional quality determinants of Foreign Direct Investment inflows to 20 countries in SubSaharan Africa between 2003 and 2019. The results show that both political risk and weak institutional quality significantly and negatively affect FDI in Sub-Saharan Africa. The GMM interaction terms for institutional quality are larger than those for political risk. These results emphasize the importance of institutional quality above that of the political system, suggesting that institutional quality is more attractive to foreign investors than a sound political system. This is probably because foreign investors are more concerned with long-run regulatory enforcement and investment protection than by short-run political dynamics.