Economies

16 pages, 2393 KiB

Open AccessArticle

Dynamics Between Foreign Portfolio Investment, Stock Price and Financial Development in South Africa: A SVAR Approach

by Kazeem Abimbola Sanusi and Zandri Dickason-Koekemoer

Economies 2025, 13(1), 8; https://doi.org/10.3390/economies13010008 - 3 Jan 2025

The goal of this study is to look into the dynamic relationship between stock prices, foreign portfolio investment, and financial development in the South African economy. Federal Reserve Economic Data (FRED) provided quarterly time series data from 1960 (Q1) to 2024 (Q2). This [...] Read more.

The goal of this study is to look into the dynamic relationship between stock prices, foreign portfolio investment, and financial development in the South African economy. Federal Reserve Economic Data (FRED) provided quarterly time series data from 1960 (Q1) to 2024 (Q2). This study uses a structural VAR estimation approach and dynamic conditional correlation (DCC GARCH model). The DCC GARCH approach displays time-varying correlations between stock prices, credit given to the private sector as a measure of financial growth, and foreign portfolio investments. The dynamic links between stock prices, financial development, and foreign private investment (FPI) are examined using the SVAR technique. Our findings show that a financial development shock encourages and provokes a substantial influx of foreign portfolio investment into the South African economy. This suggests that overseas portfolio investments react favorably and notably well to favorable shocks in the financial development process. We suggest that a stable financial system framework and lower credit costs would strengthen the impact of higher stock prices on private sector credit and guarantee that higher stock prices have a beneficial impact on other financial development metrics. Better financial development metrics, such as credit to the private sector, will therefore increase foreign portfolio investment. Full article

(This article belongs to the Special Issue Efficiency and Anomalies in Emerging Stock Markets)

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23 pages, 3388 KiB

Open AccessArticle

Food Insecurity and Coping Strategies in War-Affected Urban Settings of Tigray, Ethiopia

by Hafte Gebreselassie Gebrihet, Yibrah Hagos Gebresilassie and Mekonen Aregai Gebreselassie

Economies 2025, 13(1), 7; https://doi.org/10.3390/economies13010007 - 1 Jan 2025

Viewed by 433

Abstract

Armed conflict remains a significant global issue, with several studies highlighting its detrimental impact on the affected communities, making it a critical area of research. This study aimed to examine the effects of prolonged armed conflict on food security among urban households in [...] Read more.

Armed conflict remains a significant global issue, with several studies highlighting its detrimental impact on the affected communities, making it a critical area of research. This study aimed to examine the effects of prolonged armed conflict on food security among urban households in Tigray, Ethiopia, and to examine their coping mechanisms. Primary data were collected from 740 urban households between May and June 2024. The Food Insecurity Access Scale (FIAS), Food Insecurity Experience Scale (FIES), and Food Consumption Score (FCS) were employed to assess the levels of food security, while the Livelihood Coping Strategy Index (LCSI) was used to identify coping strategies. The findings revealed that female-headed households were more affected by food insecurity than male-headed households. FIAS (FIES) scores indicated that 17% (2%) of households were food-secure, with 20% (25%) mildly, 35% (32%) moderately, and 29% (30%) severely food-insecure. The FCS analysis showed that 52% of households had poor food consumption, 33% were borderline, and 16% were acceptable. The findings show that 39% of urban households experienced hunger in the post-conflict period. Stress-level strategies are the most widely adopted coping mechanisms. These findings underscore the urgent need for targeted policy interventions that address the specific vulnerabilities of female-headed households and ensure the development of sustainable coping strategies to mitigate the long-term effects of food insecurity in war-affected urban settings. This study offers novel insights into the urban dimensions of food insecurity and coping strategies in post-conflict settings. Full article

(This article belongs to the Topic Food Security and Healthy Nutrition)

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28 pages, 1540 KiB

Open AccessArticle

Integrating Macroeconomic and Technical Indicators into Forecasting the Stock Market: A Data-Driven Approach

by Saima Latif, Faheem Aslam, Paulo Ferreira and Sohail Iqbal

Economies 2025, 13(1), 6; https://doi.org/10.3390/economies13010006 - 31 Dec 2024

Viewed by 389

Abstract

Forecasting stock markets is challenging due to the influence of various internal and external factors compounded by the effects of globalization. This study introduces a data-driven approach to forecast S&P 500 returns by incorporating macroeconomic indicators including gold and oil prices, the volatility [...] Read more.

Forecasting stock markets is challenging due to the influence of various internal and external factors compounded by the effects of globalization. This study introduces a data-driven approach to forecast S&P 500 returns by incorporating macroeconomic indicators including gold and oil prices, the volatility index, economic policy uncertainty, the financial stress index, geopolitical risk, and shadow short rate, with ten technical indicators. We propose three hybrid deep learning models that sequentially combine convolutional and recurrent neural networks for improved feature extraction and predictive accuracy. These models include the deep belief network with gated recurrent units, the LeNet architecture with gated recurrent units, and the LeNet architecture combined with highway networks. The results demonstrate that the proposed hybrid models achieve higher forecasting accuracy than the single deep learning models. This outcome is attributed to the complementary strengths of convolutional networks in feature extraction and recurrent networks in pattern recognition. Additionally, an analysis using the Shapley method identifies the volatility index, financial stress index, and economic policy uncertainty as the most significant predictors, underscoring the effectiveness of our data-driven approach. These findings highlight the substantial impact of contemporary uncertainty factors on stock markets, emphasizing their importance in studies analyzing market behaviour. Full article

(This article belongs to the Special Issue Financial Market Volatility under Uncertainty)

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30 pages, 312 KiB

Open AccessArticle

Can the Succession Plan for Family Business Achieve Social Employment Stability? An Analysis from the Perspective of Entrepreneurs

by Hongmei Zhang, Mu Xing and Dong Chen

Economies 2025, 13(1), 5; https://doi.org/10.3390/economies13010005 - 31 Dec 2024

Viewed by 335

Abstract

Employment stability is crucial to social harmony and individual well-being. This study empirically analyzes whether the succession plan adopted by a family business can achieve the goal of stable employment and explores potential mechanisms at the individual level of entrepreneurs. This paper takes [...] Read more.

Employment stability is crucial to social harmony and individual well-being. This study empirically analyzes whether the succession plan adopted by a family business can achieve the goal of stable employment and explores potential mechanisms at the individual level of entrepreneurs. This paper takes the data from the latest Chinese Private Enterprise Survey as the research sample and employs OLS regression to empirically analyze the impact of family business succession plans on employee employment. The study finds that the succession plan can significantly increase the employment scale of a family business. The pathway mechanism indicates that the employment promotion effect is achieved by enhancing entrepreneurial responsibility and prospect perception. Additionally, when a training method involving different positions within the company is adopted, the succession plan has a more substantial promotion effect on labor employment. Finally, this study analyzes the impacts of the succession plan from three aspects: flexible employment forms, wage income levels, and employee recruitment preferences. Previous studies have not explored whether family enterprises’ formulation of a succession plan will affect social employment. By addressing this issue, new micro-level evidence is provided for further understanding of the relationship between family enterprises and the labor market. Full article

22 pages, 1278 KiB

Open AccessArticle

The Non-Monotonic Relationship Between Income and Life Insurance Demand: A Case Study of Forty-One Countries

by Kristio Rapi, Dominicus S. Priyarsono, Siti Jahroh and Toni Bakhtiar

Economies 2025, 13(1), 4; https://doi.org/10.3390/economies13010004 - 31 Dec 2024

Viewed by 302

Abstract

Income is often viewed as the main determinant of life insurance demand. However, in the last two decades, the world’s life insurance penetration has continued to decrease even as income grows. This study investigates the relationship between income and life insurance demand using [...] Read more.

Income is often viewed as the main determinant of life insurance demand. However, in the last two decades, the world’s life insurance penetration has continued to decrease even as income grows. This study investigates the relationship between income and life insurance demand using panel data from forty-one countries from 2013 to 2022, along with education and life expectancy as control variables. The study finds a non-monotonic relationship between income and life insurance penetration and between education and life insurance penetration, while life expectancy shows a monotonic relationship with life insurance penetration. This study provides significant policy implications for insurers to predict life insurance demand and suggests that non-high-income countries emphasize the improvement of their life insurance sector development. Full article

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30 pages, 7621 KiB

Open AccessArticle

Approaches to Prognosing the European Economic Crisis Through a New Economic–Financial Risk Sensitivity Model

by Monica Laura Zlati, Costinela Fortea, Alina Meca and Valentin Marian Antohi

Economies 2025, 13(1), 3; https://doi.org/10.3390/economies13010003 - 31 Dec 2024

Viewed by 368

Abstract

This paper presents a novel approach to prognosing European economic crises through the development of an economic–financial risk sensitivity model. The model integrates key macroeconomic indicators such as government deficit (NETGDP), GINI coefficient, social protection expenditure (ExSocP), unemployment rate (UNE), research and development [...] Read more.

This paper presents a novel approach to prognosing European economic crises through the development of an economic–financial risk sensitivity model. The model integrates key macroeconomic indicators such as government deficit (NETGDP), GINI coefficient, social protection expenditure (ExSocP), unemployment rate (UNE), research and development spending (RDGDP), and tax structures (TXSwoSC), assessing their role in predicting economic vulnerability across European countries. By applying the Kruskal–Wallis non-parametric test on data from 324 observations across multiple countries, significant differences were identified in the distribution of these variables. The results show that government policies related to social protection, R&D, and taxation play an important role in a country’s resilience to economic shocks. On the other hand, indicators such as income inequality and unemployment exhibit less variation, reflecting global economic conditions. The model provides a comprehensive risk assessment framework, allowing for the early detection of potential economic crises and guiding policy adjustments to mitigate risks. This methodology offers valuable insights into the sensitivity of European economies to financial disruptions, emphasizing the importance of fiscal policies and social expenditure in maintaining economic stability. Full article

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23 pages, 1001 KiB

Open AccessArticle

Effect of the Cash Support from the Vision Umurenge Programme on Household Financial Behaviour in Rwanda: The Case of Direct Support (DS)

by Emmanuel Munyemana, Charles Ruranga and Joseph K. Mung’atu

Economies 2025, 13(1), 2; https://doi.org/10.3390/economies13010002 - 28 Dec 2024

Viewed by 336

Abstract

This study aims to quantify the extent to which poor households receiving cash support from the Vision Umurenge Programme (VUP) allocate their income across major spending categories, mainly consumption, savings, household-level investment, and cash transfers for community participation. The analysis utilises a nationally [...] Read more.

This study aims to quantify the extent to which poor households receiving cash support from the Vision Umurenge Programme (VUP) allocate their income across major spending categories, mainly consumption, savings, household-level investment, and cash transfers for community participation. The analysis utilises a nationally representative panel dataset of 1642 respondents, collected between 2013 and 2017. A Maximum Likelihood Method (MLM) approach was employed to model four financial behaviours: (i) saving, (ii) consumption, (iii) investment, and (iv) social transfers as a proxy for community participation. The independent variables include the monetary benefits received by individuals over different periods, alongside demographic characteristics such as gender, age, education level, and area of residence (rural–urban), which were controlled in the analysis. The findings reveal a positive and statistically significant effect of the direct cash support provided by the VUP on increased consumption, and marginal effects on individual savings and investment behaviours. However, the data do not provide sufficient evidence to conclusively establish a relationship between participation in the VUP and cash transfers for community participation. The study recommends the intensification of efforts to engage in saving as way to build resilience, and further suggest a periodic increase in the VUP benefits’ size to cushion inflation effects. Full article

(This article belongs to the Section Economic Development)

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23 pages, 1442 KiB

Open AccessArticle

The Tariff Liberalisation Policy Nexus with Non-Tariff Measures: Panel Model Evidence in the SA–EU Fruit Products Trade

by Chiedza L. Muchopa

Economies 2025, 13(1), 1; https://doi.org/10.3390/economies13010001 - 25 Dec 2024

Viewed by 330

Abstract

Higher levels of quota granted can induce and increase exports, but the impact is not the same across all tariff lines. Answers are sought to the question of how the level of exports changes as the quota size of tariff rate quotas changes, [...] Read more.

Higher levels of quota granted can induce and increase exports, but the impact is not the same across all tariff lines. Answers are sought to the question of how the level of exports changes as the quota size of tariff rate quotas changes, thus enabling the investigation of whether unilateral quotas granted to South Africa by the European Union have influenced fruit products’ export flows in the presence of non-tariff measures. Drawing on panel data regression techniques, this study observes five fruit products’ tariff rate quotas repeatedly from 2004 to 2021. It also incorporates a variable to capture non-tariff measures based on the data from the WTO I-TIP database. The findings indicate a positive relationship between quota size and exports, further showing that for a given quota size, the increase in exports is small in the presence of non-tariff measures. These findings draw attention to future trade reforms that focus on seeking the expansion of quota size for the most productive tariff lines in terms of export growth while aiming for the simultaneous reduction of non-tariff measures and tariff rates. Full article

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Economies, Volume 13, Issue 1 (January 2025) – 8 articles

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