nep-afr New Economics Papers
on Africa
Issue of 2022‒06‒27
three papers chosen by
Sam Sarpong
Xiamen University Malaysia Campus

  1. Safe-haven Effectiveness of Cryptocurrency: Evidence from Stock Markets of COVID-19 worst-hit African Countries By Raifu, Isiaka Akande; Ogbonna, Ahamuefula E
  2. Public-private alliances for sustainable commodity supply chains: Opportunities and risks in the South African mining sector By Müller, Melanie; Saulich, Christina; Schulze, Meike
  3. Terrorism and Child Mortality: Evidence from Africa By Meierrieks, Daniel; Schaub, Max

  1. By: Raifu, Isiaka Akande; Ogbonna, Ahamuefula E
    Abstract: The study assessed the hedge or safe-haven property of five cryptocurrencies for stocks of three COVID-19 worst-hit African countries. We address two main concerns bordering on the predictive capacity of African stocks for cryptocurrency returns, and the safe-haven property that cryptocurrencies could offer to African stocks. A distributed lag model, with explicitly incorporated salient statistical features, was adopted based its efficient management of parameter proliferation and estimation biases. We ascertained the model’s in-sample predictability and evaluate its out-of-sample forecasts performance in comparison with historical average model, using Clark and West statistics. While African stocks significantly predicted cryptocurrency returns, the cryptocurrency-stocks nexus revealed the diversifier and safe-haven property of cryptocurrencies for African stocks in periods of normalcy and crisis/pandemic, respectively. Our predictive model outperformed the historical average model in the out-of-sample. Our results may be sensitive to cryptocurrency-stocks nexus, sample periods but not the out-of-sample forecast horizons.
    Keywords: COVID-19; Cryptocurrency; Distributed Lag Model; Hedge; Safe-Haven
    JEL: C51 C58 G11
    Date: 2021–01–19
  2. By: Müller, Melanie; Saulich, Christina; Schulze, Meike
    Abstract: The promotion of public-private cooperation in resource-rich countries of the Global South can serve as a flanking measure that strengthens the impact of supply chain laws. The case of the South African mining sector in its struggle against Covid-19 shows that close cooperation between companies, the state and private organisations can, under certain conditions, increase the sustainability of transnational supply chains. Nevertheless, these types of alliances carry the risk of negative cascading effects if core state tasks are delegated to companies. The German government should there­fore take into account the public regulatory landscape in the mining sector, particu­larly the quality of the implementation of laws in partner countries, and initiate measures that can work to strengthen social and environmental rights.
    Date: 2022
  3. By: Meierrieks, Daniel; Schaub, Max (WZB Berlin Social Science Center)
    Abstract: How does terrorism affect child mortality? We use geocoded data on terrorism and highly spatially disaggregated data on child mortality to study the relationship between both variables for 52 African countries between 2000 and 2017 at the 0.5x0.5 degree grid-cell level. A two-way fixed-effects approach indicates that higher levels of terrorist activity correlate with higher levels of child mortality risk. Our estimates suggest that moderate increases in the terrorism index are linked to several thousand additional deaths of children under the age of five per year. Employing instrumental-variable and panel event-study approaches, we also provide causal evidence that terrorism increases the risk of death for children under the age of five. Effect sizes associated with these causal estimates are several times larger than those from the more conservative two-way fixed-effects approach. Finally, interrogating our data, we show that the direct effects of terrorism (e.g., in terms of its lethality and destruction of public health infrastructure) tend to be very small. This, in turn, suggests that increases in child mortality primarily emerge through the behavioral response of economic agents (parents, doctors, medical staff, aid workers and policymakers) to terrorism. Indeed, we provide evidence that higher levels of terrorist activity unfavorably correlate with several proximate causes of child mortality.
    Date: 2022–05–18

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