Due to recent changes in global shipping, we investigate the Merchant Marine Act of 1920 – also known as the Jones Act. When constructed, our governing body decided that the Act was necessary for the country’s naval defenses and for proper growth of foreign and domestic commerce. The plan was for the fleet to be owned and operated privately by citizens of the United States. However, in today’s economic conditions some are wondering if the Jones Act is a liability to foreign commerce. In our work, we explore the advantages of naval defense and shipbuilding as well as the disadvantages on commerce and U.S. transportation infrastructure. To conclude, we offer opinions for policy changes to create a more level playing field for the U.S. to compete in global logistics.
The impact Walt Disney’s animated film Frozen is having on Disney’s bottom line and on tourism within Norway is highlighted. Although Frozen takes place in fictional Arendelle, movie producers incorporated Norwegian inspired scenery, imagery, and culture. Using a bi-lingual survey (English and Norwegian), we analyzed how the movie has increased travel in Norway, who appears to be most influenced to consider Norway as a travel destination, compared attitudes of film audiences in the U.S., Norway, and other countries on a variety of related factors, and provide suggestions concerning marketing connections to the movie Frozen in an attempt to further boost tourism within Norway.
In recent years around the world, it is apparent that the need for mutual assistance between states is increasing and gaining support. The Organisation for Economic Cooperation and Development (OECD) has been in the lead of this effort. This approach has also been prevalent in Africa, particularly in the Southern African Development Community (SADC) which is viewed in the context of strengthening economic integration and cooperation in the region. Recently, there has been extensive commitment by many jurisdictions around the world to eradicate problems to the exchange of information in tax matters by approving and supporting the international standard on transparency and exchange of information. The regional organisations in Sub-Saharan Africa have engaged in new trends in tax policy and administration. This has seen the adoption of agreements to regulate exchange of information in tax matters which is the subject of the present enquiry.
Corporate finance literature has developed a number of models for use in estimating the cost equity in for cross-border investments. Most of the models, if not all, are specifically developed for use by US firms investing in emerging markets. The widely used models are the home country CAPM, the local CAPM, the country-risk adjusted CAPM or the Lessard model, the Godfrey-Espinosa model, the Goldman Sachs model, the Gamma model and the SalomonSmithBarney model. Using a hypothetical case study of FirstRand Limited’s proposed investments in Ireland and Turkey, this study tests for the suitability of the reverse-engineered versions of these models in estimating the cost of equity for a South African firm planning to invest in both Ireland (developed country) and Turkey (emerging country). The results of the study indicate that the Godfrey-Espinosa the Goldman-Sachs models are equivalent. The Lassard model is equivalent to the Gamma or Damodaran mode, and both models yielded estimates closer to the SalomonSmithBarney model. All the models’ estimates for the Turkish investment are consistent with the credit ratings of both Turkey and South Africa. The cost equity estimates show that FirstRand Limited investors will demand an additional risk premium for investments in Turkey. The cost of equity estimates for the Irish investment are mixed, inconsistent with the Ireland’s credit rating and had a higher standard deviation than the estimates for the Turkish investment. The Irish estimates seem to be largely affected by the country’s high country and banking industry betas. The reverse-engineered versions of these models are suitable for use by firms in emerging countries.
This study seeks to explore with keen understanding of personal hurdles as revealed by owner-managers from two rural settings of the Northern Cape Province (NCP). The study focuses on personal hurdles that according to literature contributes to the growing failure of entrepreneurial activities. Personal hurdles were assessed using “Statistical Package for the Social Science” (SPSS). A survey method is utilized in gathering primary dataset, descriptive analysis and frequency tables were used to assess all the basic variables including the personal hurdles of owner-managers. Factor analysis was utilized as a determinant of personal hurdles. Formulated hypotheses for the study were tested by the inferential statistic of Analysis of Variance (ANOVA). Relationships between dependent (rural entrepreneurial failures) and independent variables (resources, information and infrastructure gaps) were ascertained through the Pearson Correlation techniques. The study revealed that the resource gaps affect rural entrepreneurial failure (REF)On the other hand, information and infrastructure do not have significant effect on REF.A moderate positive linear correlation between resource gap and REF was detected. Furthermore, there is a low positive linear correlation between REF and the two independent variables (information and infrastructure gaps) were detected.
The Basel regulatory credit risk rules for expected losses require banks use downturn loss given default (LGD) estimates because the correlation between the probability of default (PD) and LGD is not captured, even though this has been repeatedly demonstrated by empirical research. A model is examined which captures this correlation using empirically-observed default frequencies and simulated LGD and default data of a loan portfolio. The model is tested under various conditions dictated by input parameters. Having established an estimate of the impact on expected losses, it is speculated that the model be calibrated using banks' own loss data to compensate for the omission of correlation dependence. Because the model relies on observed default frequencies, it could be used to adapt in real time, forcing provisions to be dynamically allocated.
Using 2003 US data, this paper examines job satisfaction and economic returns to science and engineering (STEM) baccalaureate recipients who obtain STEM PhDs or professional degrees in the fields of law, MBA, medicine, and MS engineering. The salient finding of this research is that the future STEM PhD supply will largely be determined by the availability of tenured academic positions. Despite inferior economic returns, job satisfaction for STEM PhD recipients significantly exceeds that of other professional degree recipients except for medicine. Superior job satisfaction for STEM PhDs results almost entirely from employment in tenured academic positions. 55 percent of STEM PhDs working outside the academic sector have similar job satisfaction compared to professional degree recipients but without the economic rewards. This analysis further suggests STEM PhDs would not have higher job satisfaction if they had completed degrees in medicine or law instead of PhDs. The policy to increase STEM PhD employment in the US economy has focused on supply. The findings of this paper indicate that a demand-side focus may be a more effective policy and that the future STEM PhD supply will be largely driven by the availability of full-time tenure-track academic job openings.
The Basel II accord (2006) includes guidelines to financial institutions for the estimation of regulatory capital (RC) for retail credit risk. Under the advanced Internal Ratings Based (IRB) approach, the formula suggested for calculating RC is based on the Asymptotic Risk Factor (ASRF) model, which assumes that a borrower will default if the value of its assets were to fall below the value of its debts. The primary inputs needed in this formula are estimates of probability of default (PD), loss given default (LGD) and exposure at default (EAD). Banks for whom usage of the advanced IRB approach have been approved usually obtain these estimates from complex models developed in-house. Basel II recognises that estimates of PDs, LGDs, and EADs are likely to involve unpredictable errors, and then states that, in order to avoid over-optimism, a bank must add to its estimates a margin of conservatism (MoC) that is related to the likely range of errors. Basel II also requires several other measures of conservatism that have to be incorporated. These conservatism requirements lead to confusion among banks and regulators as to what exactly is required as far as a margin of conservatism is concerned. In this paper, we discuss the ASRF model and its shortcomings, as well as Basel II conservatism requirements. We study the MoC concept and review possible approaches for its implementation. Our overall objective is to highlight certain issues regarding shortcomings inherent to a pervasively used model to bank practitioners and regulators and to potentially offer a less confusing interpretation of the MoC concept.
This paper employs a newly-available and representative National Income Dynamics Study (NIDS) data of South African households to investigate whether social grants crowd-out or displace remittances. The estimated results based on full sample reveal that while the social grants have a negative impact on the amount of remittances received, the effect is statistically insignificant – social grants do not crowd out or displace remittances. The coefficient on the social grant is also insignificant in both sub-samples (rural and urban), consistent with the results on the full sample
Work is something common to all of humanity and it always has been. Throughout human history there have been many major revolutions in the world of work that have changed how people work and the types of things that they produce. The Agricultural Revolution changed how people produced and used food and changed how and where they lived. Similarly, when humans started producing pottery and metal tools and weapons there were additional changes in work and what kinds of things people did to support and protect themselves. The Industrial Revolution resulted in significant changes in the nature of work, but also where people worked and lived and they kinds of products they were now able to produce. More recently, the Information Revolution has also dramatically changed the nature of work and what people do while at work.This paper will review the nature of work and look at this topic as an important part of the psychology of humans and how work has changed over the centuries and millennia and what it looks like today. By work we mean, “A purposeful activity that is intended to facilitate survival, comfort, protection of the society, and self-fulfillment.” In addition to examining the history and evolution of work, this paper examines the functional nature of work and how that has changed and evolved as well. In addition, the motivational basis of work will be examined and the various reasons why people work will also be explored as well. One of the principal foci of this paper will be a thorough examination of how work is changing in the 21st century and looking at how globalization and technology have changed the world of work and the psychological importance of work today.
This study investigates the impact of Metacognitive, Cognitive, and Motivational Cultural Intelligence (CQ) on Behavioral Cultural Intelligence (CQ). In particular, we examine whether cognitive capabilities influence actions and behavior. The results show that 28.4% of the variability in behavioral CQ is explained by metacognitive CQ, cognitive CQ and motivational CQ. Further analysis was done to determine how each of these three dimensions impacts on behavioral CQ. Results show that only metacognitive and motivational CQ influence behavioral CQ.
Although small, micro and medium enterprises (SMMEs), such as hair salons, have harnessed a subtle combination of private and public funding to bankroll their business operations, literature on the performance of SMMEs in developing countries that often identifies finance as a major obstacle to the SMMEs’ survival, tends to be uncritical about the nature and sources of funding. In view of the fragmented nature of the literature that examines the isolated influences of private and public funding on performance, it becomes difficult to unpack the combined influence of these different funding sources on the performance of emerging firms. The problem is compounded further by the existence of limited literature that focuses on the environmental and organisational variables that mediate the funding-performance relationship in small emerging firms. This article considers a critical integrated approach that is located at the intersection of types of funding (private and public funding), mediating organisational and environmental factors and performance, in explaining the SMME performance, well aware that there is a potential for large firms to crowd out the growth opportunities of SMMEs and the insufficiency of the “wicked financial problem” in explicating the performance of such firms. The theoretical study adopts hair salons as a metaphor for an otherwise large, complex beauty and cosmetological industry in its exploration of the combined influence of private and public funding on the performance of SMMEs, with organisational and environmental concepts as mediating variables. The study deviates from mainstream studies that tend to accord significance solely to finance in SMME development and therefore, places financing, organisational and environmental variables as key variables in explaning successful business performance. The main contribution of this paper is a conceptual framework that is based on the view that financing-performance does not occur in vacuum, but is rather mediated by organisational (human resources, technological acquisition, staff training and education) and environmental (technology acquisition, firm location, competition) variables.
The South African automotive industry is faced with the challenge of how to expand through exports in a saturated global automotive market, characterized by overcapacity. The vision of the South African automotive industry is to double its vehicle production to one million units per annum by 2020. However, domestic market limitations impede the ability to achieve sufficient economies of scale. Trade arrangements contribute towards increasing market access. The impact of the AGOA on automotive trade between the United States of America and South Africa was analyzed. It was found that the AGOA resulted in a substantial increase in two-way trade. Further research is encouraged with regard to the potential of regional integration in Africa for automotive exports from South African and the USA.
Empirical studies have demonstrated that loan default probabilities (PD) and loss given defaults (LGD) are positively correlated because of a common, business cycle, dependency. Regulatory capital requirements demand that banks use downturn LGD estimates because the correlation between PD and LGD is not captured. Economic capital models are not bound by this constraint. We extend and implement a model which captures the PD and LGD correlation by exploring the link between defaults and recoveries from a systemic point of view. We investigate the impact of correlated defaults and resultant loss rates on a portfolio comprising default-sensitive financial instruments. We demonstrate that the systemic component of recovery risk (driven by macroeconomic conditions) exerts greater influence on loss estimation and fair risk pricing than its standalone component.
The International Standards on Auditing require of the external auditor to perform analytical procedures during audits. Analytical procedures range from simple to advanced, but available literature focuses on ratio and trend analysis for use in audits. This study therefore aims to analyse and compare the objective, advantages and disadvantages of selected analytical procedures other than ratio and trend analysis (Du Pont, Economic Value AddedTM (EVA), Altman’s Z-score and Benford’s Law) in an external auditing context by means of a qualitative literature analysis. Findings indicate that further analytical procedures significantly compliment ratio and trend analysis during audits, specifically during going concern evaluations and identifying error and fraud. Du Pont, Altman’s Z-score and Benford’s Law is found to be of particular value to the auditor, due to its cost benefit. EVA is found to be impractical to utilise by the auditor if not implemented by the entity. The study is an important contribution to the literature on analytical procedures as it is the first of its kind to analyse the objective, advantages and disadvantages of analytical procedures other than ratio and trend analysis in an external auditing context.
South Africa relative to its peers (upper middle income countries) suffers from high unemployment and sub-optimal economic growth. This study investigates the ‘marginal effects of employment’ with respect to real output and capital in South Africa, using annual data covering the period 1946-2015. It estimates the responsiveness of employment to real output growth and capital, employing the short and long-run dynamic interactions between these variables via the application of the VAR/VECM Johansen (1991) framework. The results show that there exists a statistically significant long-run co-integrating relationship between labour employment and real GDP growth. Marginal employment growth effect is positive; a one per cent increase in GDP tends to increase employment by about one third of one per cent. Employment adjusts consistent with expectations when it overshoots its structural relationship with other variables. However, real output tends to adjust contrary to expectations, implying significant diminishing returns to employment in the economy. Growth in capital impacts positively on output and employment. The study concluded that greater labour market flexibility and higher worker productivity is needed across all sectors of the economy.
This paper tests the validity and accuracy of the Capital Asset Pricing Model and the Fama-French Three-Factor Model, by predicting the variation in excess portfolio returns on the Johannesburg Stock Exchange. Portfolios of stocks were constructed based on an adapted Fama-French (1993) approach, using a annual sorting procedure, based on Size and Book-to-Market metrics respectively. The sample period spans six years, 2010 to 2015, and includes 46 companies listed on the JSE. The results indicate that both models perform relatively poorly because of inadequate market proxy measures, market liquidity restrictions, unpriced risk factors and volatility inherent in an emerging market environment. The Value Premium is found to explain a larger proportion of variation in excess returns than the Size Premium, and is more pronounced in portfolios with relatively higher book-to-market portfolios.
After more than two decades of enduring global reforms, the current paper makes an attempt to investigate the fundamental prerequisites of a successful reform program. The study is particularly complicated by the ambiguity surrounding the very subject matter. While most scholars are united in the view that in order to facilitate a successful transitional process, transitional economies must execute fundamental grassroots reforms, there is no formally accepted universal blueprint of what is considered to be an acceptable transitional program. In an effort to broaden the scope of the investigation, the author probes into neoclassical economic thinking and examines ‘conventional reform indicators’ commonly associated with successful reforms. But the quest brings the author to the realization that mainstream neoclassical economic thinking by itself is not sufficient; it leaves behind unanswered fundamental questions which—for the sake of methodological and pragmatic necessity—demands resolution. Consequently, the author excavates beneath superficial philosophical thinking, and probes ‘mainstream theories’ for answers to valid problems confronting transitioning economies. The inquiry is not only beneficial for knowledge, but has implications for policy-making. The paper is sectioned into four parts: introduction is an appraisal of conventional thinking; section II examines reform pre-requisites and pragmatic questions; section III is an attempt to suggest answers to questions prompted in section II and rationalize unequal reform outcomes in reforming societies that execute identical reform program; the concluding section synchronously weaves together the different pieces and ideas by drawing attention on the uniqueness of contemporary reforms and lessons learned from past reforms.
This paper undertakes a desktop examination of innovation policy and governance in Africa. The article therefore adds on to the importance of intra-African region innovation policy dialogue by exploring policy developments in the African region. The article identifies a weak and fragmented innovation system as a major challenge facing many of the African countries, exacerbated by the lack of an explicit innovation strategy. The literature indicates that Science, Technology and Innovation (STI) policies should not simply adopt a science-push approach to innovation, but rather focus on building an entire system of innovation. The emergence of a knowledge-based economy and globalisation such as the BRICs - Brazil, Russia, India, China and South Africa are restructuring the dynamics of innovation in developing countries. The literature has also shown that several international organisations have played significant roles in the development of Science and Technology (S&T) policies among African countries. However, the international organisations initiatives have mostly focused on the development of S&T with minimal emphasis on the role of policies and administration, which would increase learning and innovation performance in Africa. The central premise of the article is that innovation policy and governance is an essential component of the National System of Innovation in the African region.
The prevalent form of business organizations in Korea is a chaebol. The chaebol is a diversified conglomerate. This paper addresses the following issues concerning Korean chaebols: 1) reasons for diversification, 2) advantages and shortcomings of chaebols, 3) issues facing Korean chaebols, and 4) chaebols’ managing the crisis and making reforms. We found that Korean chaebols managed to learn from the economic crisis and made successful reforms.
