Browsing by Author "Kaseeram, Irrshad"

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    Essays on the impact of inflation targeting in South Africa
    (2012) Kaseeram, Irrshad; Contogiannis, E.
    Through the literature review this study points out the debate as to whether inflation targeting (IT) has been effective in anchoring expectations, stabilizing output, reducing the inflation rate, and the volatility and persistence of inflation, is still an open question. Further, this study asserts that perhaps the perceived success of IT is nothing more than just ‘conservative window dressing’ (ie., raising interest rate to maintain low inflation at the expense of output losses). In the form of three separate essays this study attempts to contribute to the above debate about the effectiveness of IT and the conservative monetary policy assertion. The first essay undertakes a detailed econometric investigation into whether the inflation expectations of the various market players (viz., financial analysts, business executives and trade unionists) are anchored to an inflation target, and if so then it would imply that they find the central bank’s IT framework to be credible (termed the credibility proposition). However, if expectations are not anchored to the target then it implies that agents do not find the central bank’s IT policy to be credible. When the inflation and expectations data are stationary then the credibility proposition can be tested using the Cruijsen and Demertzis, (2010) vector autoregression framework, but when the mentioned data are nonstationary, as is the case of South Africa, then the Johansen (1991) cointegration and vector error correction modelling techniques must be used. The study found that only financial analysts tend to find the South African Reserve Bank’s IT framework to be credible while business executives and trade unionists do not find this policy framework to be credible. The second essay attempts to investigate whether inflation volatility and inflation persistence have declined since the adoption of IT, since IT purports to anchor expectations around a target or target band, thereby reducing inflation volatility and inflation persistence. This study contributes to the debate by examining South Africa’s IT performance in respect of inflation volatility and inflation persistence using the generalized autoregressive conditional heteroscedasticity (GARCH), GARCHM (-in mean) and AR (2) (second order autoregressive model) methodologies. In order to avoid erroneous conclusions the study accommodates for structural breaks in the data using the Bai and Perron, (2003), the Lee and Strazicich (2003), the Andrews and Ploberger (1994) and the Lumsdaine and Papell (1997) unit root tests. The study found no significant changes in inflation volatility and persistence over the pre and post IT periods. The third essay estimates forward-looking hybrid Taylor-type reaction functions using the general method of moments (GMM) technique. as was estimated by Clarida, Gertler and Gali (1998), Gerdesmeier and Roffia (2003), Hayo and Hofmann (2005). The results showed that over the IT period, South Africa followed a conservative (high weighting on inflation reduction and low weightings on output deviation in setting the repo rate) predictable monetary policy. The study also presented case studies of the IT experiences of Chile, Brazil, Turkey and compared them to South Africa. The findings suggest that in all the countries, IT is effective in reducing inflation and achieving sustainable economic growth. However, whether IT is effective in reducing inflation expectations, volatility and persistence and stabilizing output close to its normal levels, from a statistical perspective is still an open question. A synthesis of the three essays suggest that the authorities have not succeeded in convincing price and wage setters that IT can credibily maintain inflation within the target band, hence inflation and inflation volatility persists. Moreover the success of inflation targeting is hinged on raising the repo rate to prevent the second round effects of supply shocks (eg., oil price hikes, exchange depreciations) from manifesting itself, however the effect of this policy stance is at the expense of output stabilization, which poses challenges for the transformation of monetary policy in the future.
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    Sustainability of SMEs and the effect of technology adoption on SMEs' business performance in the King Cetshwayo District Municipality
    (University of Zululand, 2025) Olowe, Ayodele Rita; Kaseeram, Irrshad; Greyling, Lorraine; Ilesanmi, Kehinde D.
    Small and medium-sized enterprises (SMEs) are vital for economic development, providing significant employment and contributing to sustainable growth. However, to remain competitive, SMEs must enhance their efficiency and performance, and adopting information technology (IT) systems can improve coordination, decision-making, customer satisfaction and overall organisational efficiency. This study aims to investigate the impact of technology adoption, precisely information and communication technology (ICT) and financial technology (Fintech), on the business performance of SMEs in semi-rural regions such as the King Cetshwayo District Municipality (KCDM). A positivist paradigm is employed to achieve this goal, involving a quantitative approach incorporating a survey design and correlational analysis. “A unified framework is proposed that captures the antecedents of technology adoption, technology adoption intensity, and business performance outcomes. Data was obtained through questionnaires from senior managers and business owners across various industries in the district. 800 questionnaires were administered, and 604 valid questionnaires were analysed. A multinomial logistic regression was used to analyse the sustainability/viability of the SMEs and their innovative capacity. SMEs’ sustainability was measured by the level of their turnover, whereas the extent of their adoption of financial technology accounts for their innovative capacity. The results indicated that higher education and better adaptability to ICT are positively correlated with SMEs advancing in their innovative capacity. In addition, SMEs' sustainability is influenced by the socio-demographic and economic factors of the entrepreneur. To explain the impact of technology adoption on SME business performance, Partial Least Squares Structural Equation Modelling (PLS-SEM) was used to conduct empirical analyses on the survey data. The results indicate that enhancing technology intensity positively impacts SMEs' business performance, including efficiency and sales. From the study, it can be reasonably argued that technology enhances the performance of SMEs in the King Cetshwayo District Municipality (KCDM); this was achieved by switching from the customary labour-intensive ways of production and doing business. Some of the recommendations of this study included that owners of SMEs in semi-rural regions like the KCDM should prioritise and develop organisational learning abilities through research into practices for more productive ways of adopting emerging technologies. In addition, SMEs in the district should consider the trade-off between labour use and emerging technologies, as this will reduce the cost of production and enhance the efficiency of production processes. Regarding policy implications, the government should create an enabling environment by providing ICT infrastructures that allow small business owners in rural and semi-rural regions to leverage emerging technology to thrive. In addition, depending on the level and stages of technology adoption during the production process, government and SME stakeholders should develop ways of offsetting potential job losses that may arise from adopting technology.