South Africa, being viewed as the centre of opportunities and enormous business prospects, is noted as having a long history of migrants, stemming from the South African Development Community region, seeking employment opportunities, both legal and illegal. Extant literature shows that there is a substantial flow of remittances from South Africa to other countries in the SADC region. Due to stringent South Africa's migration laws, many of these migrants remain undocumented, and hence use informal channels to remit to their countries of origin. This study investigates the determinants of remittance behaviour, which includes choice of remittance channels and level of remittances amongst immigrants residing in South Africa. This research contributes to the development finance (regional remittance market) body of knowledge by looking at South Africa within the SADC context. The research methodology employed was quantitative in nature, several statistical techniques were used to analyse the data including descriptive statistics with frequency tables, correlation, and binary logistic regression. SPSS and Stata 12 were used for data management and all statistical calculations. The descriptive statistics, including tallying of frequencies in the calculation of percentages, and central tendency summaries were used to summarise the data and present the sample profile and characteristics; binary logistics was used to test the three hypotheses on relationships and influences of the dependent and independent variables of interest. The findings of the study showed that sex, age, rental payments, and household expenditure were significant determinants or influencers of remittance behaviour. Furthermore, it showed that more immigrants were male, as compared to female immigrants in this study. This study concluded that since sex, age, rental payments, and household expenditure are significant determinants of remittance behaviour, the government, banks, and other stakeholders need to review their policies to create a platform that enables ease of remittances. Keywords: remittances, remittance channels, determinants of remittances, immigrants, remittance levels.

Sources of long-term growth in an economy hinge on the productive potential of the country. Major contributing factors in the production of an economy include the population representing the labour force, advanced technological inputs, investment and capital accumulation. External debt can be viewed as a critical additional income stream to enhance the productive capacity of an economy, and to supplement internal investment in cases where internal investment is not sufficient to fund economic growth focused projects and activities. However, external debt also has devastating effects on economic growth if left unmonitored or misused. Frontier Market Economies (FMEs), which are economies developing into Emerging Market Economies (EMEs), are amongst the fastest growing in the world with this growth projected to continue into the future. Yet, these countries are often forced to rely on external financing because of insufficient local markets. It is thus of critical importance to ascertain whether external debt has been a benefit or hindrance to these economies in the past, so as to develop appropriate debt management strategies to support their growth in the future. The effect of external debt on economic growth in eight FMEs is examined in this study using the system Generalized Methods of Moments (GMM) model to test for a linear relationship as well as an inverted U-shape curve between external debt and economic growth. An inverted U-shape curve implies that a threshold point exists which signals a point beyond which an economy becomes over-indebted, thus hampering economic growth. The findings of this study reveal that external debt has a positive and significant impact on economic growth in the FMEs studied. However, there was no inverted U-shape curve between the two variables. Instead a U-shape exists and thus, no maximum level of borrowing was found for the FMEs. Appropriate debt management strategies are discussed in light of the findings. Therefore, with improved demographics and strong consumption growth mixed with a lack of connection from world economics, FMEs have the potential to be part of the rapid growing economies in the world.

Abstract not available

Abstract not available

This dissertation examines both the macroeconomic and microeconomic implications for self-management of a current school of thought in Yugoslavia. Specifically, it examines the monetary theory of Ivo Perisin, Asim Stranjak, Antun Sokman, Milutin Golijanin and others associated with the Yugoslav Monetary Reform Proposal currently under discussion in Yugoslavia. In this work I discuss the similarities in approach between the nineteenth-century Banking School and the Yugoslav Monetary Reform Proposal. I also examine the similarity in approach between Marxian monetary theory and the Reform Proposal. A major portion of the dissertation is devoted to refuting the claim made by the Yugoslav authors of the Reform that their monetary theory is rooted in Marxian value theory. It is concluded that due to several methodological errors, several of which are shared by the Banking School and examined in full in this dissertation, that these Yugoslav monetary theorists more properly belong in the camp of Tooke and Fullarton than of Marx. At the heart of the Reform Proposal is the real bills doctrine. In addition to examining the macroeconomic consequences of employing the real bills doctrine as a theory of finance in a Western market economy, this dissertation asks whether it may be appropriate as a foundation for monetary policy in the self-managed Yugoslavia. The major finding of this dissertation is that under current institutional arrangements and with current investment and pricing policies pursued in Yugoslavia today, this theory of finance is inappropriate.

One of the persistent questions in public finance concerns the financial stability of American cities. "Fiscal stress," which results from failure to align revenues and expenditures, has become an increasingly common characteristic of cities and has prompted the consideration of significant policy changes by state and federal governments. Without a more complete understanding of the causes and institutional relationships which contribute to this condition, the formulation of effective programs to deal with urban solvency will most likely be fruitless. It is the purpose of this study to identify some of the factors related to fiscal stress and provide some insights which will make effective policy development possible. In this project, cities are seen as discrete units with given budgetary powers and expenditure pressures. Fiscal stress results when there is a deficit between revenues and expenditures. There are two sets of linkages through which economic, social and demographic changes are translated into financial choices. These linkages are the political and the financial systems. The principal goal of this research was to examine the responsiveness of the financial system to change. The hypothesis was that fiscally-stressed cities would have significantly different elasticities of revenues and expenditures with respect to city size and resident income than would nonfiscally-stressed cities. Regression was used to estimate the elasticities and the Chow test was used to test the hypothesis that the two sets of elasticities were significantly different. The data base included the revenues, expenditures, population and per capita income figures for 37 of the largest U.S. cities from 1961 to 1978. The hypothesis was rejected; there was insufficient evidence of any significant differences between fiscally-stressed and nonfiscally-stressed cities. The findings of this research suggest that fiscal stress is not a crisis, nor is it unique, and that fiscal stress is primarily a political concern, rather than a financial or economic problem.

For many firms, especially those with a high degree of operating or financial leverage, standard capital budgeting techniques do not allow for the incorporation of enough important economic or firm specific information. Nor do most techniques allow for the conduct of sensitivity analysis as it pertains to the capital budgeting decision. This thesis presents a capital budgeting model, a simulation model, which ties anticipated cash flows to standard economic factors and derives a distribution of net present values for each project under consideration. Stochastic dominance is then utilized to provide the decision criterion to choose from among these distributions of net present values. Developed, also, is an application of this model to aircraft procurement decisions in the commercial airline industry. Economic variable sensitivity analysis is performed within several of the project comparisons utilized. Further applications of this model are discussed as logical extensions of the work presented here. Among these extensions is the development of hedging strategies, to include the use of options and futures, to reduce project risk. Use of this model within a decisions support framework is cited as its most likely future means of implementation.

Portfolio Insurance is the name given to a wide variety of asset allocation strategies used to control investment risk in portfolios of various asset classes. Portfolio insurance provides downside protection without limiting the potential for upside gains. The success of domestic portfolio insurance strategies, however, may not indicate its benefits in international asset management. Foreign financial markets have different market structures which may not be suitable for the implementation of portfolio insurance strategies. This study, therefore, has attempted to establish the facts about the market structures, to discover the differences among the markets, and to analyze the effects of different market structures on the implementation and the costs of portfolio insurance. Market volatility and futures mispricing that crucially affect the implementation and performance of the international portfolio insurance programs are examined. The costs of two option based portfolio insurance strategies (put-protected and dynamic hedging) as well as a non-option based strategy (Constant Proportion Portfolio Insurance) have been assessed and analyzed under historical and simulated market conditions. The impact of the strategic decisions (e.g., the protection horizon, the floor return, and the rebalance interval) on the costs of alternative strategies is also analyzed. The empirical results show that although the Japanese and Hong Kong markets have been more volatile than the U.S. and the futures mispricing more persistent, the costs of alternative portfolio insurance strategies were not prohibitive for the periods tested. Generally, the cost of the 3-year program was less than that of the 1-year program. Moreover, for the long-run simulations the Constant Proportion Portfolio Insurance strategy outperformed the market for the periods examined.

This dissertation consists of two essays on mutual funds. In the first essay, I show that investors misallocate a substantial amount of capital in the active mutual fund industry. To this end, I develop a novel structural identification strategy to estimate returns to scale in active management and time-varying fund skill. A median fund is over-allocated by $29 million, so the majority of funds are expected to underperform. The industry can host more capital, but additional capital should go to a small fraction of funds. In particular, funds with the highest skills are severely under-allocated and account for most of the missing capital. In the time-series, under-allocated funds can outperform their benchmarks for three years. My findings suggest the active mutual fund industry deviates from a frictionless rational expectations equilibrium. The disequilibrium implies the existence of profit opportunities for informed investors and thus rationalizes the popularity of active management. In the second essay, we investigate the performance of active sector funds whose potential outperformance has not been exhausted entirely by decreasing returns to scale. We document that, despite good track records, most sector funds are relatively smaller than their equilibrium fund sizes — at which they are expected to generate zero net alphas. In particular, from 1998 to 2016, a passive indexation strategy of actively managed sector funds earns an annual benchmark-adjusted return of 5.70% and a monthly alpha of 27 basis points. Moreover, the strategy’s outperformance is present in market downturns (i.e., resilient to tail risk) and robust to change of rebalancing frequency and inclusion of expenses. Efficient diversification and under-appreciated skill – illustrated by an alpha arithmetic to guide similar strategies – explains the strategy’s success.

This thesis is based on the empirical examination of the impact of divestiture announcements, with a focus on spin-off and sell-off transactions, on the share performance of parent companies listed on the Johannesburg Stock Exchange (JSE) in South Africa. The sample of the study for spin-off consisted of 36 companies while that of sell-off transactions consisted of 41 companies listed on JSE for deals that were announced and concluded from 2006 to 2016. The cumulative average abnormal returns for the parent companies were calculated using the event study methodology over the entire event window. Abnormal returns were calculated using the two-factor APT model approach. The cumulative average abnormal returns significance was tested using the t-test. Thereafter, the average abnormal returns and cumulative average abnormal returns were compared over the event window for the pre and post announcement period. A comparison was also made between spin-off and sell-off transactions over the entire event window (-30, +30). Three key results were established, the first being that, spin-off transactions generate positive abnormal returns while sell-off transaction generate negative abnormal returns. Second, it is clear that there were significant positive cumulative average abnormal returns for postannouncement returns for spin-off transactions while the post-announcement returns for sell-off transactions generated a negative cumulative average abnormal returns. Thirdly, I compared the two form of divestiture (spin-off and sell-off transactions) and discovered that there appears to be significant evidence that the CAAR for spin-off transactions are higher than the CAAR for sell-off transactions.