IDEAS home Printed from https://ideas.repec.org/a/prf/journl/v18y2024i2p127-140.html

The Impact of Stokvel and Banking Sector Efficiency: an Econometrics Model using (ARDL) Approach to Cointegration

Author

Listed:
  • Lindiwe Ngcobo

    (University of South Africa)

Abstract

Background. Despite playing second fiddle to formal banking institutions, stokvel are community-based savings schemes aimed at improving the lives of low- and middle-income earners. Aim. The aims are to attempts to capture the relationship between stokvel and banking sector development across its proxy of banking sector efficiency. The aim is to determine the relative attractiveness of the needs of low- and middle households saving with banking sector/financial institutions. Methods. Using Autoregressive Distributed-lag (ARDL) Bounds Testing Approach using quarterly time series secondary data ranging from 2009Q4 to 2020Q2 collected from the South African Reserve Bank and Old Mutual South Africa. Results. The Bounds F-tests integration statistics of the combined cointegration test revealed a long-run association between stokvel and banking sector efficiency. Additionally, using the error correction model, a short-run relationship was observed between stokvel savings and banking sector efficiency. The negative and statistically significant coefficient of the error correction model (ECM) also confirmed the prevalence of a causal relationship between stokvel and banking sector efficiency. The standard diagnostics tests confirmed that ARDL results are significant and serially correlated. Stability tests were carried out using the cumulative sum of recursive residuals (CUSUM) and the cumulative sum of the squares of recursive residuals (CUSUMSQ) measures of model stability and the results showed that the models were highly stable over the sample period. Thus, it can be said that including stokvel in the banking system does not help with the development of the banking sector. Recommendation. A similar study can be conducted with the inclusion of all banks that make up the banking sector and their impact on South Africa’s economic growth.

Suggested Citation

  • Lindiwe Ngcobo, 2024. "The Impact of Stokvel and Banking Sector Efficiency: an Econometrics Model using (ARDL) Approach to Cointegration," ACTA VSFS, University of Finance and Administration, vol. 18(2), pages 127-140.
    • Handle: RePEc:prf:journl:v:18:y:2024:i:2:p:127-140
    as

    Download full text from publisher

    File URL: https://acta.vsfs.eu/pdf/acta-2024-2-02.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    2. Lindiwe Ngcobo & Joseph Chisasa, 2018. "Characteristics of Credit Instruments Issued by Stokvels in South Africa," Journal of Economics and Behavioral Studies, AMH International, vol. 10(6), pages 240-250.
    3. H.S. Nuhu & A.O. Donye & P.M. Bzugu & A.O. Ani, 2015. "The Relationship between Savings Mobilization Techniques and Livelihood Activities of Rural Women in Borno State, Nigeria," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 5(3), pages 479-496, March.
    4. Lindiwe Ngcobo & Joseph Chisasa, 2018. "Success Factors and Gender Participation of Stokvels in South Africa," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 14(5), pages 217-228, OCTOBER.
    5. Sajid Haider & Munir Ahmed & Carmen de Pablos & Aasma Latif, 2018. "Household Characteristics and Saving Motives: Application of Multinomial Logistic Regression to Examine Maslow's Hierarchy of Needs Theory," International Journal of Applied Behavioral Economics (IJABE), IGI Global Scientific Publishing, vol. 7(1), pages 35-52, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Emeka Nkoro & Aham Kelvin Uko, 2016. "Exchange Rate and Inflation Volatility and Stock Prices Volatility: Evidence from Nigeria, 1986-2012," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 6(6), pages 1-4.
    2. Czujack, Corinna & Flôres Junior, Renato Galvão & Ginsburgh, Victor, 1995. "On long-run price comovements between paintings and prints," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 269, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    3. repec:erh:journl:v:1:y:2009:i:2:p:63-76 is not listed on IDEAS
    4. Bloch, Harry & Rafiq, Shuddhasattwa & Salim, Ruhul, 2015. "Economic growth with coal, oil and renewable energy consumption in China: Prospects for fuel substitution," Economic Modelling, Elsevier, vol. 44(C), pages 104-115.
    5. Gevorkyan, Arkady & Semmler, Willi, 2016. "Oil price, overleveraging and shakeout in the shale energy sector — Game changers in the oil industry," Economic Modelling, Elsevier, vol. 54(C), pages 244-259.
    6. Levent, Korap, 2007. "Modeling purchasing power parity using co-integration: evidence from Turkey," MPRA Paper 19584, University Library of Munich, Germany.
    7. Michel DIMOU & Alexandra SCHAFFAR & Zhihong CHEN & Shihe FU, 2008. "LA CROISSANCE URBAINE CHINOISE RECONSIDeReE," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 27, pages 109-131.
    8. Md.Yousuf & Raju Ahmed & Nasrin Akther Lubna & Shah Md. Sumon, 2019. "Estimating the Services Sector Impact on Economic Growth of Bangladesh: An Econometric Investigation," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 7(2), pages 62-72, June.
    9. Jason Allen & Robert Amano & David P. Byrne & Allan W. Gregory, 2009. "Canadian city housing prices and urban market segmentation," Canadian Journal of Economics, Canadian Economics Association, vol. 42(3), pages 1132-1149, August.
    10. Vassilis Monastiriotis & Cigdem Borke Tunali, 2020. "The Sustainability of External Imbalances in the European Periphery," Open Economies Review, Springer, vol. 31(2), pages 273-294, April.
    11. Nisamudheen, P.P. & Shareef, K. Hassan, 2025. "The role of human capital in driving renewable energy and sustainable development in India," Utilities Policy, Elsevier, vol. 95(C).
    12. Kim, Byung Yeon, 1997. "Soviet Household Saving Function," Economic Change and Restructuring, Springer, vol. 30(2-3), pages 181-203.
    13. Muellbauer, John & Sinclair, Peter & Aron, Janine & Farrell, Greg, 2010. "Exchange Rate Pass-through and Monetary Policy in South Africa," CEPR Discussion Papers 8153, C.E.P.R. Discussion Papers.
    14. Zamani, Mehrzad, 2007. "Energy consumption and economic activities in Iran," Energy Economics, Elsevier, vol. 29(6), pages 1135-1140, November.
    15. Muhammad Zia Ullah Khan & Muhammad Illyas & Muqqadas Rahman & Chaudhary Abdul Rahman, 2015. "Money Monetization and Economic Growth in Pakistan," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 3(4), pages 184-192, April.
    16. Muhammad Shafiullah & Ravinthirakumaran Navaratnam, 2016. "Do Bangladesh and Sri Lanka Enjoy Export-Led Growth? A Comparison of Two Small South Asian Economies," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 17(1), pages 114-132, March.
    17. Xu, Haifeng & Hamori, Shigeyuki, 2012. "Dynamic linkages of stock prices between the BRICs and the United States: Effects of the 2008–09 financial crisis," Journal of Asian Economics, Elsevier, vol. 23(4), pages 344-352.
    18. Titus O. Awokuse, 2003. "Is the export-led growth hypothesis valid for Canada?," Canadian Journal of Economics, Canadian Economics Association, vol. 36(1), pages 126-136, February.
    19. Saaed, A.A.J., 2007. "Inflation and Economic Growth in Kuwait: 1985-2005. Evidence from Co-Integration and Error Correction Model," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 7(1).
    20. Christian Schoder, 2012. "Effective demand, exogenous normal utilization and endogenous capacity in the long run. Evidence from a CVAR analysis for the US," IMK Working Paper 103-2012, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    21. Zhuo Qiao & Keith Lam, 2011. "Granger causal relations among Greater China stock markets: a nonlinear perspective," Applied Financial Economics, Taylor & Francis Journals, vol. 21(19), pages 1437-1450.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:prf:journl:v:18:y:2024:i:2:p:127-140. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Magdalena Šebková (email available below). General contact details of provider: https://edirc.repec.org/data/vsfspcz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.