Merle Holden - Academia.edu (original) (raw)

Papers by Merle Holden

The paper aimed to establish the changes that had occurred in the institutional structures govern... more The paper aimed to establish the changes that had occurred in the institutional structures governing trade policy in South Africa during the period 1990-1998. It also examined the forces that had influenced the application of tariff policy by the major tariff setting bodies by applying various theories of endogenous protection to their decisions. Using firm level data on applications made to the Board on Tariffs and Trade, the study found that when estimating a Probit model, employment considerations rather than capital invested had influenced the Board's decisions to grant protection. In addition, the Board was found to have granted protection even in the face of tariff lines having been bound under the Uruguay Round. The paper argues that this should not be interpreted as a reversal of the trade liberalisation, but rather as an attempt by the Board to cushion firms from the acceleration in the tariff rationalisation process that had occurred after the GATT offer. Finally, it is suggested that the Board's response to changes in import penetration ratios between industries that were considered organised provided prima facie evidence of the superior lobbying ability of such industries.

Palgrave Macmillan UK eBooks, 1999

The World Economy, Jun 1, 1998

RePEc: Research Papers in Economics, 2005

South African Journal of Economics, 1985

OVER THE PAST SEVERAL YEARS the flexibility of exchange rate policy in South Africa has been incr... more OVER THE PAST SEVERAL YEARS the flexibility of exchange rate policy in South Africa has been increasing. Officials have frequently indicated that a 'market based' exchange rate policy is being followed which the De Kock Commission (1985) has described as a managed float. Certainly fluctuations in the rand exchange rate against all major currencies have increased in the recent past. With this greater variability, however, it has become increasingly difficult to determine exactly what has been happening to the competitiveness of the economy, given the substantial fluctuations in the exchange rates of the major trading partners of South Africa and the difference in their rates of inflation. The purpose of this paper is to examine some alternative measures of the exchange rate changes in order to determine exactly what has taken place in the period since the breakdown of the Bretton Woods system as well as to provide a framework for analysts seeking to make judgements about the appropriateness of the level of the exchange rate. In addition, we will discuss some of the issues surrounding the suitability of various exchange rate regimes for South Africa and measure whether in fact policy has become more flexible in the recent past.

Banks and Bank Systems, 2017

The 2008/2009 financial crisis resulted in renewed interest in the usually neglected subject work... more The 2008/2009 financial crisis resulted in renewed interest in the usually neglected subject working capital management by both practitioners and researchers because of the scarcity and high cost of funds of financial markets during the crisis. In this study, the author uses a balanced panel of 85 firms listed on Johannesburg Stock Exchange over the period 2001-2010 to analyze the linkages between investment in fixed and working capital and financing constraints. Using the generalized method of moments (GMM) estimation on the panel data for these firms, the author finds that working-capital investment is sensitive to fixed capital investment and cash-flow fluctuations. The study contends that good working capital management may help firms to alleviate the effects of financing constraints on fixed investment. Finally, the study suggests some policy implications for the managers and investors in South African markets.

Development Southern Africa, 1986

The policy of decentralisation of industry in South Africa is effected through a system of incent... more The policy of decentralisation of industry in South Africa is effected through a system of incentives and subsidies designed towards shifting resources from the urban areas to the rural areas. This paper examines this policy in the light of the infant industry argument for protection and its economic efficacy. In particular, the analysis is applied to a comparison of manufacturing industry in the Black States and in the rest of South Africa. Furthermore, the relationship between estimated differential subsidy rates granted to a sample of decentralised firms is examined in terms of their differential infant industry characteristics and capital intensity.

Development Southern Africa, 1989

This paper compares two studies which have estimated the employment effects of different trade re... more This paper compares two studies which have estimated the employment effects of different trade regimes for South Africa. The differing results of these studies are important in terms of facilitating the choice among alternative trade strategies at a time when the economy is experiencing low growth and economic sanctions. The paper concludes that one of the studies is incorrect in

Since the Second World War, the economies of the world have gradually integrated through increase... more Since the Second World War, the economies of the world have gradually integrated through increased trade. Over the past 20 years world merchandise exports have risen from 11 to 18 per cent of world GDP. Service exports have risen even faster increasing from 15 per cent of world trade to 22 per cent. Of all the trading on stock markets one in seven sales involve foreigners. These statistics provide a snap shot picture of the degree to which economies around the world have integrated, or to use the catch phrase of the moment the degree of globalization that has occurred.

This paper explores the factors influencing the use of trade credit as a source of finance for co... more This paper explores the factors influencing the use of trade credit as a source of finance for companies listed on the JSE Securities Exchange (JSE). The study uses a balanced panel data collected for 92 companies for the period of 20012010 and employs the generalized method of moments (GMM) estimation technique in order to control for unobservable heterogeneity and potential endogeneity problems. The evidence obtained from the study suggests that firms have a target level of account payable and that firm internally-generated resources, investment opportunities and short-term financial debt play an important role in the use of trade credit as a short-term source of financing among the listed companies. Finally, the study recommends that firms pay attention to relationships with their suppliers as their supply of goods on credit is an important source of funding.

The South African Journal of Economics, 1979

arid PAUL HOLDEN*(1) Du PLESSIS*(2) has questioned whether the percentage change in total value a... more arid PAUL HOLDEN*(1) Du PLESSIS*(2) has questioned whether the percentage change in total value added is equal to the percentage change in value added per unit. In the context of the calculations of effective tariff' rates in our paper,*(3) the two concepts are equal because we used data expressed in terms of domestic rather than free trade prices. This can be demonstrated as follows.

Journal of Economics and Behavioral Studies, 2016

This study investigates the existence of chaos on the Johannesburg Stock Exchange (JSE) and studi... more This study investigates the existence of chaos on the Johannesburg Stock Exchange (JSE) and studies three indices namely the FTSE/JSE All Share, FTSE/JSE Top 40 and FTSE/JSE Small Cap. Building upon the Fractal Market Hypothesis to provide evidence on the behavior of returns time series of the above mentioned indices, the BDS test is applied to test for non-random chaotic dynamics and further applies the rescaled range analysis to ascertain randomness, persistence or mean reversion on the JSE. The BDS test shows that all the indices examined in this study do not exhibit randomness. The FTSE/JSE All Share Index and the FTSE/JSE Top 40 exhibit slight reversion to the mean whereas the FTSE/JSE Small Cap exhibits significant persistence and appears to be less risky relative to the FTSE/JSE All Share and FTSE/JSE Top 40contrary to the assertion that small cap indices are riskier than large cap indices.

Mediterranean Journal of Social Sciences, 2014

This study seeks to establish the influence of the short-term insurance industry on financial and... more This study seeks to establish the influence of the short-term insurance industry on financial and economic development in South Africa. The study uses quarterly data from 1994 to 2009 to perform the Johansen (1991) co-integration tests and subsequently the Granger causality tests to establish the relationship between the short-term insurance industry and the finance-growth nexus. The study is premised on the 'demand-following' and 'supply-leading' propositions by Patrick (1966). Results show that the insurance industry has a positive relationship with economic development. The development of the short-insurance industry heavily relies on economic development rather than on banking sector development and financial deepness. This suggests that formulating policies that promote economic growth directly leads to the development of the shortterm insurance industry in South Africa confirming the demand-following proposition.

Journal of Economics and Behavioral Studies, 2014

This paper analyses the determinants of working capital investments of 92 companies listed on the... more This paper analyses the determinants of working capital investments of 92 companies listed on the Johannesburg Stock Exchange (JSE) over the period 2001-2010. Working capital management has grown in significance from being a survival issue to a strategic and competitive tool. Using the Generalized Method of Moments estimation, the study found that firms pursue target levels of current assets. However, the adjustment process is relatively slow. The study found that leverage, short-term finance and fixed investment significantly influence the level of working capital investment, while operating cash flows, state of the economy, firm size and sales growth rate were found to be statistically insignificantly related to working capital investment. The study recommends that managers understand the driving factors of working capital investment since working capital investment influences the value of the firm.

University of Natal and a doctorate at Duke University, and was previously Associate Professor at... more University of Natal and a doctorate at Duke University, and was previously Associate Professor at George Mason University. Professor Holden held a fellowship in the ERU from January-June 1988, during which period she undertook the research on which this paper is based.

A striking feature of South Africa's trade liberalisation is that, until 2995, it did not inv... more A striking feature of South Africa's trade liberalisation is that, until 2995, it did not involve any import liberalisation. The focus of earlier liberalisation wsa the reduction of the anti-export bias, and, on the import side, the replacement of QRs with equivalnet tariffs and other duties. This ditinguishes the process in South Africa from that which has happended in other African liberalisations. A seconddistinction (an the two are in in all liklihood conected) is that South Africa was not pressured into making changes as part of conditions attached to a loan; trade policy has evoloved in response to the perceived needs and problems of the economy, and has had the commitment of government and the support of the perceived beed and problems of the economy, and has had the commitment of government and the support of the businesss community, virtually eliminating the credibility problem. A third noteworthy difference is that South Africa was the first African country with a GATT...

There are many lessons and directions that can be drawn from the Mauritian experience. To begin w... more There are many lessons and directions that can be drawn from the Mauritian experience. To begin with, this chapter first briefly considers the island’s history. Against this background, we then discuss the change in international regimes towards developing countries, including Mauritius. The country’s historical development and growth is reviewed focusing on the role of trade and trade policy in making of this small island African developmental state such a success.

Can South and Southern Africa become Globally Competitive Economies?, 1996

The fear of many policy-makers is that the sub-continent, by virtue of a combination of events, m... more The fear of many policy-makers is that the sub-continent, by virtue of a combination of events, many of them in the form of external shocks and political upheavals, has been marginalised. The crisis in Africa has been characterised by stagnating or negative economic growth, balance-of-payments difficulties, fiscal problems, sluggish agricultural growth and rapid population growth. Many countries have undertaken structural adjustment programmes, often at the behest of the World Bank and IMF, and often in a climate of crisis but with the hope that these programmes could not worsen the economic situation. The verdict is still out on the efficacy of these programmes for Africa.

Journal of Interdisciplinary Economics