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The housing market in South Africa has the potential to drive economic growth and attract foreign investment, but it can be affected by various risk factors. This paper…
The housing market in South Africa has the potential to drive economic growth and attract foreign investment, but it can be affected by various risk factors. This paper aims to conduct an empirical analysis of the effect of country risk components on the housing market in South Africa.
Linear and nonlinear autoregressive distributed lag (ARDL) models were used to evaluate the effects of the economic, financial and political risk factors of country risk on the prices of different segments of houses based on 276 monthly time-series data from January1995 to December 2015.
First, the results established that the three housing indices were more sensitive to political risk in the long run. Second, short run results showed that the three housing indices were largely influenced by their own preceding adjustments in the short run albeit minimal influences from political risk. Third, large housing segments indicated a higher magnitude of the country risk effect in South Africa.
This paper concluded that the response of housing prices to changes in the country risk components differed across the three segments of the housing market in South Africa. Consequently, this study presented the first comparison of the reactions of different housing segments to different components country risk.
The study evaluated the interlinkages and diversification opportunities in the context of emerging bond markets from 2007:1 to 2020:5, using the vector autoregressive…
The study evaluated the interlinkages and diversification opportunities in the context of emerging bond markets from 2007:1 to 2020:5, using the vector autoregressive (VAR) model and sub‐period analyses to compare BRIC (2007:1–2010:11) and BRICS (2010:12–2020:5) regimes. As indicated by the breaking unit‐root test, dummies for the global financial crisis and COVID‐19 were incorporated in the analyses. VAR results showed that the Indian bond market responds positively to the previous change in the Chinese bond market during the BRIC era while BRICS bond markets are mostly uninfluenced by prior behavior patterns of one another. These suggested that the diversification opportunity has been increased following the admission of South Africa to the league. In addition, variance decomposition and impulse response provide proofs to suggest that BRICS bond markets are more exogenous and independent compared to what is obtained during the BRIC period. Consequently, the authors concluded that the BRICS bloc has provided greater diversification opportunities for emerging markets’ bondholders in the recent past.