Global Journal of Emerging Market Economies

This article examines the impact of human capital and openness on total factor productivity (TFP) for five South Asian countries—India, Pakistan, Sri Lanka, Bangladesh, and Nepal—during the period from 1980 to 2011. The empirical results derived from the panel cointegration techniques provide evidence of a long-run relationship among the variables. The dynamic ordinary least squares (DOLS) results show that the long-run elasticities of TFP with respect to human capital and openness are positive. The results, however, suggest that the impact of human capital on TFP is relatively weaker than the impact of openness on TFP for the South Asian countries. The study also examines the long-run and short-run Granger causality between these three variables in a panel framework. The results indicate that there is a long-run Granger causality running from trade openness and human capital to TFP. Similarly, in the short-run, there exists a bi-directional Granger causality between trade openness and total factor productivity and between total factor productivity and human capital. The study suggests that by improving trade policy reforms, such as, licensing policies, and removing trade barriers, the low-income countries in South Asia can increase their level of openness, which would boost the TFP in the short run.

This article outlines a vision for Africa in 2050 in which the continent narrows the gap in per capita income and development outcomes that it has with middle- and high-income countries. Specifically, this article describes the challenges of building on Africa’s endowment of natural resources to become a supplier of intermediate and finished goods and agricultural products, with a diversified private sector, a growing service sector, and a high degree of economic integration on the continent and in the world. First, the article outlines Africa’s resource endowment. Africa has a fairly modest global reserve position, with the exception of gemstones, titanium, and bauxite. Second, the article evaluates African countries’ track record in terms of extraction and processing, including a classification of countries according to their reliance on resource rents. Next, the authors present a vision for Africa’s extractive industries that has the ultimate goal of macroeconomic stability. The article suggests that stabilization/liquidity funds and wealth funds contribute to an increase in the quality of public investment and monetary policy. Finally, the authors suggest that African governments should encourage the growth of an ecosystem of supportive industries around the natural resource sector to increase the number of positive spinoffs from the extractive industries.

This article examines the challenges facing agriculture in Africa. First the article outlines agriculture’s connection with overall economic growth; then, the author evaluates agricultural productivity and food security in Africa in 2010. From this point, the author evaluates the advantages and disadvantages of seven paths that African agriculture is likely to evolve along between now and 2050: five for Sub-Saharan African and two for North Africa. In Sub-Saharan Africa, the types of farming proposed are: extensive, mechanized; intensive export; intensive peri-urban; subsistence; and reserves, game ranching, and tourism. In North Africa, the author proposes: irrigated and rainfed. In order to realize the most positive benefits of these paths in 2050, Africa has to tackle six challenges, outlined by the author: reducing population growth, promoting irrigation, adapting the role of the state, promoting the acceleration of technical change (including fertilizer and biotechnology), and preparing for climate change. Increasing the competitiveness of Africa’s commercial farming will improve income, inequality, and nutrition across the continent.

This study examines the stock market performance of Indian state-owned public sector units (PSUs), which were privatized through initial public offerings (IPOs) and further public offerings (FPOs). The analysis of stock price reaction is conducted for different event dates related to these offerings, that is, public notice date (PND), issue announcement date (IAD), price band/actual issue date (PAD), and the offer price date (OFD). The study also compares the price reaction for IPO and FPO issues. Furthermore, as the public sector equity offerings are generally sold at a discount, we also empirically analyze the degree of underpricing of such offerings. The study uses event methodology for 18 PSUs that made FPOs between 2002 and early 2013. The results report positive abnormal returns (ARs) (i.e., excess returns over and above the expected returns) after the primary offerings (IPO) of the equity. Furthermore, it was observed that in the case of first-stage further offerings (FPO-1), positive ARs are observed prior to the public notification of such offering followed by negative price reaction until the date declaration of offer price. For second-stage further public offerings (FPO-2), negative ARs (i.e., when actual returns are less than expected returns) after the public notification continue even after the date of stock offering. The price discounts on PSU issues exhibit a declining trend from IPO to successive stages of FPOs. Based on the empirical analysis, we recommend that the disinvestment should be spread over three stages of offerings, that is, primary issue (IPO), first-stage further offerings (FPO-1), and second-stage further offerings (FPO-2). In addition, selection of investment bankers and market timing needs special consideration. Furthermore, the regulatory surveillance needs to be strengthened to check the presence of ARs even before the event dates.