Submitted in fulfillment of the requirements for the degree of Doctor of Technology: Business Administration, Durban University of Technology, Durban, South Africa, 2017. / This thesis was aimed at developing a model of growth through diversification, for shipping agencies in South Africa, under recessionary conditions. The study adopted a mixed methods approach, in seeking to develop a methodology to meet the aims of the research project; to develop a framework of diversification strategies for the shipping industry. The mixing of quantitative data and qualitative data not only enriched the findings but assisted with validation thereof, while achieving the research aims through the methodology adopted. The theoretical foundation of the study was on the theories of diversification, the theory of human behaviour and other economic principle theories, all of which were sampled among South African corporate executives in the shipping supply chain. Surveys were carried out using two structured research instruments in the form of questionnaires to collect quantitative data, with qualitative data collected through interviews, focus groups and observation. The data were analysed using triangulation to combine the results of the investigation. Statistical analysis was employed for the quantitative research and results illustrated in tables, combined with thematic analysis through qualitative research, to draw conclusions and recommendations on the study. The findings confirmed that there are opportunities for diversification into husbandry services, freight transportation, charterers’ services and other markets along the supply chain. Reasons for diversification among shipping firms include similar resource utilisation to service many functions, diversification to gain market leadership and poor performance in existing markets. The theory is not conclusive about whether related or unrelated diversification affects firm performance. The development of operation Phakisa, to focus on unlocking the economic potential of South Africa’s oceans, has not been addressed and needs more research into its feasibility and likely impact on the South African container shipping industry. There is need for management to mobilise resources, such that they can serve many functions and activities, and to build competences through human resources management. The study is relevant for the shipping supply chain executive, as it contributes to managerial decision-making, in terms of analysing their capability to create and apply knowledge in their competitive strategies. / D

The study investigates the relationship between stock market performance and business cycles in South Africa for the period 2002-2009 using monthly data. This is done by constructing a Vector Error Correction Model (VECM). The study specifies a business cycle model with the business cycle coincident indicator (BC) regressed against, the All Share Price Index (ALSI), Real Effective Exchange Rate (REER), Money Supply (M1), Inflation (CPIX) and the Prime Overdraft Rate (POR). The ALSI represents stock market performance whilst the rest of the variables are to enhance model specification. The study found a positive relationship between stock market performance and business cycles in South Africa. The results also indicated that business cycles are positively related to the lagged variable of the coincident indicator and money supply. In addition, the findings also reveal that BC is negatively related to interest rates and the real effective exchange rate.

This paper examines the ability of the yield curve to predict recessions in South Africa, and compares its predictive power with other commonly used variables that include the growth rate in real money supply, changes in stock prices and the index of leading economic indicators. The study also makes an attempt to find out if monetary policy explains the yield spread's predictive power with regards to future economic activity. Regarding methodology, the standard probit model proposed by Estrella and Mishkin (1996) that directly estimates the probability of the economy going into recession is used. Results from this model are compared with a modified probit model suggested by Dueker (1997) that includes a lagged dependent variable. Results presented in the paper provide further evidence that the yield curve, as represented by the yield spread between 3-month and IO-year government paper, can be used to estimate the likelihood of recessions in South Africa. The yield spread can produce recession forecasts up to 18 months, although it's best predictive power is seen at two quarters. Results from the standard probit model and the modified pro bit model with a lagged dependent variable are somewhat similar, although the latter model improves forecasts at shorter horizons up to 3 months. Compared with other indicators, real M3 growth is a noisy indicator and does not provide much information about future recessions, whilst movements in the All-Share index can provide information for up to 12 months but does not do better than the yield curve. The index of leading economic indicators outperforms the yield spread in the short run up to 4 months but the spread performs better at longer horizons. Based on the results from the study, it appears that changes in monetary policy explain the yield spread's predictive power. This is because the yield spread loses its explanatory power when combined with a variable representing the monetary policy stance of the central bank.

This study provides evidence of the relationship between bank-granted credit and business cycles in South Africa. The study is conducted in three phases, namely qualitative research (Phase I), quantitative research (Phase II) and econometric analysis (Phase III). A sequential (connected data) mixed methodology (Phase I and II) is used to collect and analyze primary data from market participants. The qualitative research (Phase I) involves structured interviews with influential or well informed people on the subject matter. Phase I of the study is used to understand the key determinants of bank credit in South Africa and to appreciate how each of the credit aggregates behaves during alternate business cycles. Qualitative survey results suggest key determinants of commercial bank credit in South Africa as economic growth, collateral value, bank competition, money supply, deposit liabilities, capital requirements, bank lending rates and inflation. The qualitative results are used to formulate questions of the structured survey questionnaire (Quantitative research- Phase II). The ANOVA and Pearman’s product correlation analysis techniques are used to assess relationship between variables. The quantitative results show that there is direct and positive relationship between bank lending behavior and credit aggregates namely economic growth, collateral value, bank competition and money supply. On the other hand, the results show that there is a negative relationship between credit growth and bank capital and lending rates. Overall, the quantitative findings show that bank lending in South Africa is procyclical. The survey results indicate that the case for demand-following hypothesis is stronger than supply-leading hypothesis in South Africa. The econometric methodology is used to augment results of the survey study. Phase III of the study re-examines econometric relationship between bank lending and business cycles. The study employs cointegration and vector error correction model (VECM) techniques in order to test for existence of long-run relationship between the selected variables. Granger causality test technique is applied to the variables of interest to test for direction of causation between variables. The study uses quarterly data for the period of 1980:Q1 to 2013:Q4. Business cycles are determined and measured by Gross Domestic Product at market prices while bank-granted credit is proxied by credit extension to the private sector. The econometric test results show that there is a significant long-run relationship between economic growth and bank credit extension. The Granger causality test provides evidence of unidirectional causal relationship with direction from economic growth to credit extension for South Africa. The study results indicate that the case for demand-following hypothesis is stronger than supply-leading hypothesis in South Africa. Economic growth spurs credit market development in South Africa. Overall, the results show that there is a stable long-run relationship between macroeconomic business cycles and real credit growth in South Africa. The results show that economic growth significantly causes and stimulates bank credit. The study, therefore, recommends that South Africa needs to give policy priority to promotion and development of the real sector of the economy to propel and accelerate credit extension. Economic growth is considered as the significant policy variable to stimulate credit extension. The findings therefore hold important implications for both theory and policy. / Business Management / D.B.L.

This study provides evidence of the relationship between bank-granted credit and business cycles in South Africa. The study is conducted in three phases, namely qualitative research (Phase I), quantitative research (Phase II) and econometric analysis (Phase III). A sequential (connected data) mixed methodology (Phase I and II) is used to collect and analyze primary data from market participants. The qualitative research (Phase I) involves structured interviews with influential or well informed people on the subject matter. Phase I of the study is used to understand the key determinants of bank credit in South Africa and to appreciate how each of the credit aggregates behaves during alternate business cycles. Qualitative survey results suggest key determinants of commercial bank credit in South Africa as economic growth, collateral value, bank competition, money supply, deposit liabilities, capital requirements, bank lending rates and inflation. The qualitative results are used to formulate questions of the structured survey questionnaire (Quantitative research- Phase II). The ANOVA and Pearman’s product correlation analysis techniques are used to assess relationship between variables. The quantitative results show that there is direct and positive relationship between bank lending behavior and credit aggregates namely economic growth, collateral value, bank competition and money supply. On the other hand, the results show that there is a negative relationship between credit growth and bank capital and lending rates. Overall, the quantitative findings show that bank lending in South Africa is procyclical. The survey results indicate that the case for demand-following hypothesis is stronger than supply-leading hypothesis in South Africa. The econometric methodology is used to augment results of the survey study. Phase III of the study re-examines econometric relationship between bank lending and business cycles. The study employs cointegration and vector error correction model (VECM) techniques in order to test for existence of long-run relationship between the selected variables. Granger causality test technique is applied to the variables of interest to test for direction of causation between variables. The study uses quarterly data for the period of 1980:Q1 to 2013:Q4. Business cycles are determined and measured by Gross Domestic Product at market prices while bank-granted credit is proxied by credit extension to the private sector. The econometric test results show that there is a significant long-run relationship between economic growth and bank credit extension. The Granger causality test provides evidence of unidirectional causal relationship with direction from economic growth to credit extension for South Africa. The study results indicate that the case for demand-following hypothesis is stronger than supply-leading hypothesis in South Africa. Economic growth spurs credit market development in South Africa. Overall, the results show that there is a stable long-run relationship between macroeconomic business cycles and real credit growth in South Africa. The results show that economic growth significantly causes and stimulates bank credit. The study, therefore, recommends that South Africa needs to give policy priority to promotion and development of the real sector of the economy to propel and accelerate credit extension. Economic growth is considered as the significant policy variable to stimulate credit extension. The findings therefore hold important implications for both theory and policy. / Business Management / D.B.L.