African Journal of Economic and Management Studies

Purpose This paper examines the effectiveness of the joint impact of convergence policy measures on macroeconomic stability conditions in the West African monetary zone (WAMZ) countries, using an annual panel data from 1990 to 2021. Design/methodology/approach It uses the dynamic autoregressive distributed lag (ARDL) approach to exploit the short and long run dynamics macro stability. A composite convergence index was constructed and its impact was examined on three different macroeconomic stability measures representing: internal stability, external stability and overall stability. Findings Findings from the study suggest that a unit deviation of the convergence policy index from its mean, in the short run, leads to worsening external and overall macroeconomic stability conditions in the zone, but it leads to improvement in the internal macroeconomic stability conditions. However, in the long run, the opposite occurs, a unit deviation of the convergence policy index from its mean, it leads to improvement in both external and overall macroeconomic stability situations and deterioration in internal macroeconomic stability situation. Practical implications It is concluded that the convergence policy criteria are effective only in the long run and therefore these policies alone cannot be used to achieve short run macroeconomic stability within the zone. Thus, policymakers should have a second look at how fiscal and monetary policies are conducted and also work to address structural challenges. Originality/value The paper examines the effectiveness of the joint impact of convergence policy measures on macroeconomic stability conditions in the WAMZ countries.

Yahuza Abdul Rahman

Anthony Kofi Osei-Fosu

Daniel Sakyi

The impacts of convergence policies on macroeconomic stability in the West African monetary zone

西非货币区融合政策对宏观经济稳定的影响

Purpose The study measures business leaders’ perceptions of the likelihood of recovery, the competency of business rescue practitioners and the level of support they are expected to provide to businesses in rescue. By examining these three facets of confidence, using expectancy theory, the study seeks to reveal the perceptions of directors as decision-makers in commencing proceedings by inferring their level of confidence in the business rescue process to the likelihood of directors initiating business rescue proceedings timeously. Design/methodology/approach An online survey targeted South African business leaders, especially directors, was developed to recognise the confidence in the business rescue process. The study combined quantitative (Likert scale) and qualitative (open-ended questions) methods. Data were analysed using the expectancy theory, linking behaviour to anticipated outcomes, to derive confidence in the rescue process. Limitations such as the sensitive nature of insolvency and its inherence negative inclinations should be noted. Findings The study revealed some complex sentiments surrounding the business rescue proceedings. The responses are indicative of both confidence in and scepticism of the process, offering a nuanced look at South Africa’s insolvency proceedings from outside the confines of the industry itself. Research limitations/implications The limitations of the study are notably reflected in its reliance on qualitative insights, which may inherently skew towards negative perceptions due to the nature of the subject – business rescue proceedings. Moreover, despite the anonymity of the survey, there remains a possibility that respondents, who are directors with fiduciary duties, may not have been completely forthcoming. This reticence could stem from an unconscious bias to present themselves and the decisions they make in a more favourable light, thus potentially downplaying or overlooking their own hesitations or misgivings about the business rescue process. This may lead to an underrepresentation of both the depth of scepticism and the complexity of the challenges faced in initiating business rescue proceedings. Originality/value The originality of this paper lies in investigating the confidence business leaders have in the business rescue process in the context of South Africa derived from a survey instrument.

Wesley John Rosslyn-Smith

Investigating the confidence business leaders have in business rescue

探究企业领导人对企业救助的信心

Purpose This paper tests the causal relationship between bid ask spread and cash holding in the short and long run. It uses different proxy of corporate cash holding and test three proxies of a bid-ask spread. It also provides comprehensive and robust evidence for the causal relationship between cash holding and stock liquidity in an emergent market. Design/methodology/approach This study is based on a sample covering all financial and industrial firms in Tunisia’s stock market from 2008 to 2020. It uses a panel ARDL data approach to test the bi-directional relationship between cash holding and stock liquidity. This paper conducts rigorous statistical analysis of the collected data to test the hypothesized relationship between cash holding and bid-ask spread. This can involve running regression models, performing statistical tests, and analyzing the significance of the estimated coefficients. Findings Overall, paper’s findings provide empirical evidence supporting the bidirectional causal relationship between cash holding and bid-ask spread. The results highlight the importance of cash holding in determining stock liquidity and suggest that firms with higher cash holdings may face liquidity challenges. These findings have implications for corporate governance and can guide firms and regulators in improving stock liquidity and designing appropriate policies and recommendations. Practical implications Overall, the practical implications of this paper suggest that firms can enhance their stock liquidity by improving governance mechanisms and optimizing cash management strategies. Regulators can play a crucial role in creating a conducive market environment, and investors can take into account the relationship between cash holding and stock liquidity when making investment decisions. Originality/value We present empirical evidence of the relation causality between stock liquidity and cash holding. Our research is the first to test the bidirectional relationship between bid ask spread and cash holding in the short and long run. Overall, the originality of this paper lies in its exploration of the causal relationship between cash holding and bid-ask spread, the use of multiple proxies for stock liquidity, the examination of an emerging market context, the comparative analysis across sectors, and the practical implications for firms and regulators. These contributions add to the existing body of knowledge and provide new insights into the dynamics of cash holding and stock liquidity.

Wissem Daadaa

Mohamed Anis Daadaa

The bidirectional causal relationship between cash holding and bid-ask spread: evidence from panel ARDL model

现金持有与买卖价差之间的双向因果关系：基于面板自回归分布滞后模型的证据

Purpose This paper seeks to investigate the amplitude of macro-financial linkage for an emerging country like Morocco. Design/methodology/approach For this purpose, it presents a semi-structural new-Keynesian model. In the blocks of the former, a risk premium is charged on the lending rate in addition to the policy rate. To identify the macro-financial linkage, the risk premium is considered endogenous. It is represented as a function of the borrower’s probability of default, which is, in turn, a function of the GDP gap. To identify this two-wave relationship, we estimate an ARDL model between 2009Q1 and 2020Q1. Therefore, we integrate the estimation results into the new-Keynesian semi-structural model. Findings The results reveal a significant impact of the financial condition on the path of the business cycle. In fact, demand shocks and nonperforming loan shocks (NPLs) are exacerbated by the presence of macro-financial linkage. Under this condition, the amplitude and persistence of the shocks are amplified and extended. Originality/value This paper extends the literature on the interconnection between the real and financial economies by considering the endogeneity of the credit risk premium and modeling its dynamics.

Lahoucine Achmakou

M. El-Hassan Hachimi Alaoui

Macro-financial linkage, endogenous risk premium and monetary policy: evidence from a semi-structural model estimated for Morocco

宏观金融联系、内生风险溢价与货币政策：基于摩洛哥半结构模型的实证研究

Purpose A shortage of investment capital is one of the main issues facing most developing economies, including Tanzania. Policymakers, economists, and governments in these countries have been debating how to overcome this obstacle and improve economic growth through foreign direct investments (FDI). The present study endeavors to examine the relationship between FDI and economic growth in Tanzania during the period of 1991–2021. The analysis considers financial development, capital formation, and labor force involvement as intermediation variables. Design/methodology/approach The study uses time series data to estimate an autoregressive distributed lag (ARDL) model, as well as Granger causality tests to investigate the relationship between the variables under study. Findings The findings show a long-run co-integration between the studied variables. However, only FDI and labor input have a significant impact on gross domestic product (GDP) growth in both the short and long run. Bidirectional causality exists between FDI, labor input, and GDP growth in the short and long run. Practical implications This study contributes to an understanding of the relationship between inbound FDI, labor input, and economic growth in Tanzania, as well as updating the government to improve its financial system to gain more from FDI inflows and hence boost growth-enhancing effects. Originality/value This study provides insight into the relationship between inbound FDI and economic growth in Tanzania, which is a critical policy concern in developing economies. Extant studies’ results remain controversial, and this is the first study in Tanzania to investigate the FDI-growth nexus, by considering financial development, capital formation, and labor input simultaneously.

Benedict Huruma Peter Mwakabungu

Melkamu Wondimu

Foreign direct investment inflow and the economic growth nexus in Tanzania

外国直接投资流入与坦桑尼亚经济增长的关联

Purpose The study investigates the impact of financial inclusion, financial stability, bank nonperforming loans, inflation, macroeconomic management quality and the unemployment rate on economic growth in Nigeria. Design/methodology/approach The data are analyzed using the ordinary least squares regression, generalized linear model regression, robust least squares regression and the quantile regression methods. The sample period is from 2007 to 2022. Findings Financial inclusion, inflation rate and macroeconomic management quality are significant determinants of economic growth in Nigeria. Bank nonperforming loans, unemployment rate, international trade and climate change have an insignificant effect on economic growth in Nigeria. Also, financial inclusion, inflation rate, financial stability, macroeconomic management quality and the unemployment rate are significant determinants of economic growth in good economic years in Nigeria. Practical implications The well-known catalysts of economic growth, such as financial inclusion and financial stability, are not positive catalysts of economic growth in Nigeria during good economic years. Therefore, it is recommended that policymakers should find the right level of financial inclusion, financial stability and unemployment that stimulate economic growth in Nigeria. Originality/value This study examines some determinants of economic growth in Nigeria which have not been examined in the existing literature.

Peterson K. Ozili

Impact of financial inclusion, financial stability, bank nonperforming loans, inflation, macroeconomic management quality and unemployment on economic growth in Nigeria

金融包容性、金融稳定性、银行不良贷款、通货膨胀、宏观经济管理质量及失业对尼日利亚经济增长的影响

Abbreviation	AJEMS
Journal Impact	1.56
Quartiles(Global)	ECONOMICS(Q3)

ISSN	2040-0705, 2040-0713
h-index	27

Publication Information	Publisher: Emerald Group Publishing Ltd.，Publishing cycle: ，Journal Type: journal，Open Access Journals: No
Basic data	Year of publication: 2010，Proportion of original research papers: 100.00%，Self Citation Rate:7.10%， Gold OA Rate: 10.85%

African Journal of Economic and Management Studies

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The impacts of convergence policies on macroeconomic stability in the West African monetary zone

Investigating the confidence business leaders have in business rescue

The bidirectional causal relationship between cash holding and bid-ask spread: evidence from panel ARDL model

Macro-financial linkage, endogenous risk premium and monetary policy: evidence from a semi-structural model estimated for Morocco

Foreign direct investment inflow and the economic growth nexus in Tanzania

The impacts of convergence policies on macroeconomic stability in the West African monetary zone

Investigating the confidence business leaders have in business rescue

Macro-financial linkage, endogenous risk premium and monetary policy: evidence from a semi-structural model estimated for Morocco

The bidirectional causal relationship between cash holding and bid-ask spread: evidence from panel ARDL model

Impact of financial inclusion, financial stability, bank nonperforming loans, inflation, macroeconomic management quality and unemployment on economic growth in Nigeria