Journal of Academic Finance

Preface

jamel Eddine HENCHIRI — 2025-09-29

Preface of the special issue on Resilience and Regeneration of Businesses and Financial Markets in the Fourth Industrial Revolution

Editorial on Special Issue

Frank Ranganai MATENDA — 2025-09-29

Financial development and growth nexus

Phumla Mahlangu — 2025-09-29

Abstract

Purpose: This study investigated the relationship between financial development and economic growth in South Africa using the annual time series data (1980 to 2022) from the South African Reserve Bank and Quantec Easy Data.

Method: The study employed both the cointegrated autoregressive distributed lag (ARDL) and the Granger causality approach for the analyses.

Results: The unit test results revealed that the variables were stationary and nonstationary at level, implying a mixture of I(0) and I(1), hence the ARDL approach. The cointegration analysis revealed that the variables are cointegrated, which means there is a long run equilibrium relationship among them. Furthermore, the Granger causality test results revealed that causality runs from GDP to interest rate liberalisation or vice versa.

Originality/relevance: This study took a different angle by splitting financial development into four proxies and used interest rate liberalisation as an additional variable in the system.

Macro Economic Determinants of Economic Growth In South Africa

Dorah Dubihlela — 2025-09-29

Purpose: To investigate the determinants of economic growth in South Africa amidst ongoing macroeconomic challenges.

Method: Utilized yearly time series data. Assessed data stationarity using the Phillips-Perron and Augmented Dickey-Fuller tests. Employed an Autoregressive Distributed Lag (ARDL) model to analyze short- and long-run relationships. Applied Granger causality to explore causal relationships among the variables.

Results: In the long run, financial development, capital stock, and employment are significant determinants of economic growth. In the short run, all variables examined were significant.

Originality/Relevance: The study addresses critical macroeconomic challenges in South Africa, providing insights that can inform policies aimed at stimulating economic growth through employment, investment in capital, and financial development.

The linkage between foreign direct investment, external debt and economic growth of South Africa

Dintuku Maggie KGOMO — 2025-09-29

Purpose: A country's level of external debt and economic growth trends are regarded as imperative factors in attracting foreign direct investments of a country. Most developing countries are faced with high levels of external debt and lower growth. Due to such concerns, South Africa is among the developing countries that attract limited foreign direct investment. While investment is crucial for economic growth, hence an increase in foreign direct investment is beneficial for economic growth, especially in host economies. Thus, the study at hand examines the linkage between foreign direct investment, external debt, and economic growth of South Africa, using secondary time series data spanning from the periods of 1994 to 2021.

Method: In attaining the study aim, the study employed the following econometric techniques, unit root tests, autoregressive distributed lag cointegration bound test, diagnostic tests, and stability tests.

Results: The unit root results revealed that the variables are I(0) and I(1). The study distinguished a long-run link between foreign direct investment, external debt, and the economic growth of South Africa during the study period.

Originality/relevance: The study contributes to existing literature on foreign direct investment, external debt and economic growth, and offers new recommendations from the South African context from 1994 to 2021. Hence, the analyzes in this study are important in guiding policies on foreign direct investment, external debt, and economic growth.

Mapping the effects of international trade on economic growth of South Africa: Econometric review

Ndivhuho Eunice RATOMBO — 2025-09-29

Purpose: The purpose of this study is to investigate the effects of international trade on the economic growth of South Africa.

Method: The study employed the autoregressive distributed lag (ARDL) approach for 50 years, from 1973 to 2022 and annual time series data from the World Bank database.

Results: The study results revealed that South Africa economic growth is subsequent to the purchasing power parity theory and Heckscher-Ohlin theory, by highlighting that international trade is used to drive a higher inflation and to increase the level of exchange rate. There is evidence that South Africa has adopted measures that causes loss of value on the currency and economic growth in general.

Originality: The novelty of this study lies in the fact that the South African government must be considerate and sensible when creating international trading strategies by aligning the relevant real interest rate that will assist to monitor international trade channels and policies to enhance and sustain future economic growth. This study contributed to the understanding of the effects of international trade on economic growth debate particularly, by prompting the level of trade to drive South African economic growth to reach the desired level.

Keywords: economic growth, international trade, developing countries, ARDL approach, South Africa

The role of data analytics in driving resilient SME performance in South Africa.

Sharon MANDIZHA — 2025-09-29

Purpose: The COVID-19 pandemic has created unprecedented challenges for businesses worldwide, especially for Small and medium-sized enterprises (SMEs). The pandemic has created new risks and uncertainties that SMEs must navigate to remain operational and competitive. To address these challenges, SMEs need to adopt innovative practices to survive and thrive. Recent studies have shown that data analytics is increasingly becoming a key factor in driving firm performance. Thus, this study aims to empirically assess the importance of data analytics in driving resilient performance. Essentially this paper elucidates the strategic role of data analytics as one of the key components of an artificial intelligence driven world, to drive sustainable firm performance.

Methodology: The research employed a distinctive dataset of 450 SMEs in South Africa. Machine learning techniques, particularly Random Forest and Support Vector Regression (SVR), were utilised to model the influence of data analytics on SME performance during the Covid-19 pandemic. This approach facilitated a detailed examination of the correlation between data analytics adoption and organisational resilience during unprecedented circumstances.

Results: Data analytics can help SMEs prioritize urgent matters, ultimately improving their performance. Thus, the study recommends analytics software. With the help of analytics software, SMEs can gain valuable insights into critical issues that require immediate attention. By embracing these data analytics solutions, SMEs can effectively leverage their data to generate valuable insights that support decision-making processes.

Originality/Relevance: In the context of a developing country during the COVID-19 pandemic, this study addresses a substantial gaps in the literature by concentrating on the role of data analytics in the performance of SMEs. Although prior research has illustrated the significance of data analytics for SMEs in developed countries, this study offers new perspectives on its implementation and influence in South Africa. The use of advanced machine learning techniques to analyze a substantial dataset of SMEs adds methodological rigor to the research.

Keywords: SMEs; Data Analytics; Risk; Performance

The switching-regime effect of sovereign risk components on housing prices in South African major cities

Paul-Francois MUZINDUTSI — 2025-09-29

Purpose: This study aims to investigate the effect of sovereign risk components on housing prices in six major South African cities under switching regimes conditions.

Method: The Markov Switching Model was employed to analyse the switching effect of economic, financial and political risk on the property markets in major South African cities.

Results: In the bearish regime, the response of property prices to changes in country risk components varies across the cities. In contrast, country risk components do not affect property prices in the bullish regime in all sampled cities. Cape Town has the most volatile housing prices, and each city’s response to changing regimes is asymmetric, with the likelihood of staying longer in the bullish condition than the bearish market condition.

Originality: This study is the first to assess the impact of country risk factors on housing prices for South African cities with a specific focus on switching regimes.