Search results

This study investigates (1) whether democratization drives sovereign credit ratings (SCR) changes (the “democratic advantage”) or whether SCR changes affect democratization, (2) whether the degree of democratization in sub-Saharan African (SSA) countries affects the associations and (3) whether the associations are significantly affected by resource dependence.

This study investigates the effects of SCR changes on democracy in 22 SSA countries over the period of 2000–2020 VEC Granger causality/block exogeneity Wald tests, and impulse responses and variance decomposition analyses with Cholesky ordering and Monte Carlo standard errors in a panel VECM framework.

The full sample impulse responses find that a SCR shock has a long-run detrimental effect on the democracy and political rights but only a short-run positive impact on civil liberties. Among the sub-samples, it is found that the extent of natural resource dependence does not affect the magnitude of SCR shocks on democratization mentioned above but it is found that a SCR shock affects long-run democracy in SSA countries that are relatively more democratic but is more likely to drive democratic deepening in less democratic SSA countries. The full sample variance decompositions further finds that the variance of SCR to a political rights shock outweighs the effects of all the macroeconomic factors, whereas in more diversified SSA countries, the variances of SCR are much greater for democracy and political rights shocks, which suggests that democratization and political rights in diversified SSA economies are severely affected by SCR changes. In the case of the high and low democracy sub-samples, it is found that the variance of SCR in the relatively higher democracy sub-sample is greater than in the low democracy sub-sample.

These results have three implications for democratization in SSA. First, the effect of a SCR change is not a democratically agnostic and impacts political rights to a greater extent than civil liberties. Second, SCR changes have the potential to spark a negative cycle in SSA countries whereby a downgrade leads to a deterioration in socio-political stability coupled with increased financial economic constraints that in turn drive further downgrades and macroeconomic hardship. Finally, SCR changes are potentially detrimental for democracy in more democratic SSA countries but democratically supportive in less democratic SSA countries. Thus, SSA countries that are relatively politically sophisticated are more exposed to the effects of SCR changes, whereas less politically sophisticated SSA countries can proactively shape their SCRs by undertaking political reforms.

This study is the first to examine the associations between SCR and democracy in SSA. This is critical literature for the Africa’s scholarly work given that the debate on unfair rating actions and claims of subjective rating methods is ongoing.

Service–sales ambidexterity (SSA) offers sales managers crucial information about dealing with customer service failures through an effective management control system. This study aims to scrutinize the relationships among SSA, salesforce control system, salesperson’s role stressors and service recovery performance (SRP) in the business-to-business (B2B) context.

An analysis is conducted based on survey data collected from 586 B2B sales employees participating in an extensive survey. Structural equation modeling is used to analyze the proposed hypotheses.

Empirical findings suggest that behavior-based control harms SSA. On the other hand, outcome-based control has a positive impact on SSA. The research outcomes further disclose that SSA positively impacts salesperson role conflict and emotional fatigue, whereas emotional fatigue negatively impacts SRP. Salesperson resilience notably moderates the association between SSA and emotional fatigue.

The study addresses there is a dearth of research on SSA applying the sales management control system. When studying about ambidexterity in sales context, many supervisory styles have been explored; however, to the best of the authors’ knowledge, this is the first systematic attempt to understand how sales management control systems play a role in SSA.

This study examines the roles of cross-sectional dependence, asymmetric structure and country-to-country policy variations in the inflation-poverty reduction causal nexus in selected sub-Saharan African (SSA) countries from 1981 to 2019.

To account for cross-sectional dependence, heterogeneity and policy variations across countries in the inflation-poverty reduction causal nexus, this study uses robust Hatemi-J data decomposition procedures and a battery of second-generation techniques. These techniques include cross-sectional dependency tests, panel unit root tests, slope homogeneity tests and the Dumitrescu-Hurlin panel Granger non-causality approach.

Unlike existing studies, the panel and country-specific findings exhibit several dimensions of asymmetric causality in the inflation-poverty nexus. Positive inflationary shocks Granger-causes poverty reduction through investment and employment opportunities that benefit the impoverished in SSA. These findings align with country-specific analyses of Botswana, Cameroon, Gabon, Mauritania, South Africa and Togo. Also, a decline in poverty causes inflation to increase in the Congo Republic, Madagascar, Nigeria, Senegal and Togo. All panel and country-specific analyses reveal at least one dimension of asymmetric causality or another.

All stakeholders and policymakers must pay adequate attention to issues of asymmetric structures, nonlinearities and country-to-country policy variations to address country-specific issues and the socioeconomic problems in the probable causal nexus between the high incidence of extreme poverty and double-digit inflation rates in most SSA countries.

Studies on the inflation-poverty nexus are not uncommon in economic literature. Most existing studies focus on inflation’s effect on poverty. Existing studies that examine the inflation-poverty causal relationship covertly assume no asymmetric structure and nonlinearity. Also, the issues of cross-sectional dependence and heterogeneity are unexplored in the causal link in existing studies. All panel studies covertly impose homogeneous policies on countries in the causality. This study relaxes this supposition by allowing policies to vary across countries in the panel framework. Thus, this study makes three-dimensional contributions to increasing understanding of the inflation-poverty nexus.

This study investigates the relationship between bank capital and liquidity creation and further examines the effect that institutional quality has on this relationship in Sub-Saharan Africa (SSA).

The data comprise 41 universal banks in nine SSA countries from 2010 to 2022. The study employs the two-step system generalized methods of moments and further uses alternative estimators such as the fixed-effect and two-stage least squares methods.

The empirical results show that bank capital has a direct positive and significant effect on liquidity creation. In addition, the positive effect of bank capital on liquidity creation is enhanced, particularly in a strong institutional environment. The results imply that nonconstraining capital regulatory policies bolster bank solvency, improve risk-absorption capacity and increase liquidity creation.

This study has several policy implications. First, it provides empirical evidence on the position of banks in SSA on the financial fragility and risk-absorption hypothesis of bank capital and liquidity creation debates. This study shows that the effect of bank capital on liquidity creation in SSA countries is positive and supports the risk-absorption hypothesis. Second, this study highlights that a country's quality institutions can complement bank capital to increase liquidity creation. In addition, this study highlights that nonconstraining capital regulatory policies will bolster bank solvency, improve risk-absorption capacity and increase liquidity creation.

The novelty of this study is that it introduces the country's quality institutional environment into bank capital and liquidity creation links for the first time in SSA.

Debt sustainability and the growing level of external debt in sub-Saharan African (SSA) continue to be significant research priorities. This study aims to examine the corruption-external debt nexus in SSA economies and whether different levels of corruption better explain this relationship.

The panel quantile regression approach was applied to account for the heterogeneous effect of the exogenous variables on external debts. The research covers 30 years of panel data from 30 selected SSA economies for the period spanning from 2000 to 2021.

The empirical findings of the regression analysis demonstrate the heterogeneous influences of the exogenous variables on external debt. While there was a positive impact of foreign direct investment (FDI) inflows on external debts, corruption established a negative relationship with external debt from the 10th to the 80th quantile. The findings showed a positive link between trade openness and external debt, while they also showed a negative relationship between gross fixed capital formation and external debt.

It is implied that corruption “sands the wheels” of external debts in the selected SSA countries. Therefore, the amount of external debt that flows into SSA is inversely correlated with corruption activity.

To the best of the authors’ knowledge, this study is one of the first to use panel quantile regression to analyze how corruption affects debt dynamics across different levels of debt, allowing for a more nuanced understanding of how corruption affects debt dynamics. Based on the findings of this study, SSA countries should create enabling environments to attract FDI inflows and to continue to drive domestic revenue mobilization and capital so as to be less dependent on external debts.

This study examines the role of institutions and governance on the digital financial inclusion and economic growth nexus in Sub-Saharan Africa (SSA) from 2014 to 2020.

This study adopts the generalised method of moments technique which controls for endogeneity. The authors employed four main variables namely, index of digital financial inclusion, gross domestic product per capita growth, institutions and governance.

The results suggest a significant positive effect of institutional quality and governance on the digital financial inclusion-economic growth nexus in SSA. Furthermore, the authors find that effect of trade and population growth on economic growth was significantly positive while inflation reduces economic growth in the region.

This study also ignored the effect of digital financial inclusion on environmental quality. Future researches should focus on addressing these drawbacks and replicating the study in Africa as a whole and other developing countries across the world that are experiencing digital financial inclusion and economic growth challenges. The results from the study imply that a positive relationship between digital financial inclusion and economic growth. It is important to note that the study was carried out on the premise that institutions play a pivotal role in enhancing economic growth in SSA.

The results confirm the significance of policies that enhances institutional quality and governance which are other avenues the authorities can pursue to enhance economic growth in SSA.

The paper documents the importance of institutions in boosting economic growth which impacts on social life rather than digital financial inclusion only.

The paper makes a contribution through analysing the role of institutions and governance on the digital financial inclusion-economic growth nexus rather than the traditional financial inclusion–economic growth nexus which is common to the majority of the available empirical studies.

We wanted to find out how infant multinationals originating from Poland enact opportunities in Sub-Saharan African (SSA) countries.

We conducted a comparative case study of four Polish firms operating in SSA.

We found that when entering SSA, studied firms employed effectual decision-making logic. Thus, their internationalization was means-driven, serendipitous, partnership-oriented, based on the “affordable loss” principle and focused on shaping opportunities in SSA, rather than predicting, analyzing and planning any firm-specific assets or capabilities.

We illuminated the nature of the means employed in effectual internationalization and the role of partners (“effectual stakeholders”) in this process. Thus, we contribute to a deeper understanding of how infant multinationals navigate extreme uncertainty in the emerging SSA markets.

This study aims to provide an empirical investigation into rising capital flight and the role of institutional quality to mitigate its effect on the real sector in sub-Saharan Africa (SSA).

The study uses the system generalized method of moments and uses data spanning from 1989 to 2020 from 26 SSA countries.

The findings show that capital flight has no direct impact on the real sector while institutional quality adversely impacted the agricultural and industrial sectors. The study also found that institutional quality is unable to mitigate the effect of capital flight on the industrial sector.

This study investigates if institutional quality mitigates the impact of capital flight on the real sector proxied by industrial value-added and agriculture value-added.

As an effort to support the quest for a stable financial sector, this study aims to determine the factors that contribute to the financial stability gap in sub-Saharan Africa (SSA).

The estimation techniques used include the fixed and random effect, system general methods of moments and dominance analysis. The data used is annual data for 33 SSA countries, covering the period 2007 to 2018.

Key findings from the analyses indicate that nonperforming loans increase gaps in financial stability while regulatory quality, control of corruption, political stability and appreciation of the local currency reduce the financial stability gap in SSA.

The absence of a specific metric for measuring the financial stability gap appears to be the limitation of this study. Its existence could improve the discussion and also make replicability easier. However, this study relies on a measure introduced by Kulu et al. (2022b), which is also acceptable and quite popular in the literature.

To the best of the authors’ knowledge, this study is the first in the finance literature to estimate the determinants of the financial stability gap in SSA.

The discussion on international migration has become a significant part of globalization and a topical issue in international relations, especially in developing economies which mostly relies on migrant remittances. The purpose of the study is to examine whether financial market development (equity market development and banking sector development) really drives migrant remittance flow in Sub-Saharan Africa (SSA).

The study employs the dynamic heterogeneous panel data approach-the pool mean group (PMG) and the mean group (MG) techniques in analyzing the model based on data obtained from 27 SSA countries covering the period 2000–2020.

The findings of the study revealed that financial market development (equity market development and banking sector development) is a key driver of migrant remittances flows in the SSA region. In addition, the study revealed that the following macroeconomic variables such as real interest rate, unemployment rate, global growth, emigration, and economic growth are also determinants of migrant remittances flows in the SSA region.

The reviewed empirical literature revealed that several studies documents that the macroeconomic determinants of migrant remittances include inflation, GDP, interest rate, exchange rate, population growth, financial sector development and unemployment rate. Most of these studies fail to capture both equity market development and robust banking sector development (financial market development) as critical drivers of migrant remittances flow in SSA. Also, this study uses a robust measure of equity market development and banking sector development, unlike previous studies.

The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-05-2023-0361