An Analysis of Drivers of International Investment Decisions in South Africa

There is much rethinking being done about investment treaties. While some level of uniformity existed when there was institutional direction by the World Bank and hegemonic pressure exerted by states in the Global North, geopolitical power is now shifting in ways that are producing greater diversity in approaches to the field. The evidence seems to indicate that each state that is of sufficient size or power will seek to fashion its foreign investment policy in the context of its own circumstances. This is certainly true for Brazil, Russia, India, China, and South Africa (the BRICS). Within this group of newly industrializing countries, it is clear that a uniform approach to investment treaties will not emerge, despite avowals to the contrary. In this essay, I offer an assessment of the divergent paths some of these states have taken. I contend that China has emerged as a newly hegemonic actor in international investment in a way that undermines its traditional role as champion for the Third World, and that India's recent attempt to develop a “balanced approach” to investment treaties is unworkable. Only South Africa has developed an approach that seeks to protect its government's ability to serve the goals of its people by subjecting foreign investment disputes to South African law and courts.

Safety risk and international investment decisions

Journal of World Business ◽

10.1016/j.jwb.2020.101129 ◽

2020 ◽

Vol 55 (6) ◽

pp. 101129

Author(s):

Kaitlyn DeGhetto ◽

Bruce T. Lamont ◽

R. Michael Holmes

Keyword(s):

Investment Decisions ◽

International Investment ◽

Safety Risk

Modeling international investment decisions for financial holding companies

European Journal of Operational Research ◽

10.1016/j.ejor.2006.02.038 ◽

2007 ◽

Vol 180 (2) ◽

pp. 800-814 ◽

Cited By ~ 6

Author(s):

Charles V. Trappey ◽

Tsui-Yii Shih ◽

Amy J.C. Trappey

Keyword(s):

Investment Decisions ◽

International Investment ◽

Holding Companies ◽

Financial Holding ◽

Financial Holding Companies

State Regulation of the Tourism Industry for Attracting International Investment

Journal of Environmental Management and Tourism ◽

10.14505/jemt.11.6(46).19 ◽

2020 ◽

Vol 11 (6) ◽

pp. 1489

Author(s):

Liliya SHAYAKHMETOVA ◽

Aigul MAIDYROVA ◽

Marat MOLDAZHANOV

Keyword(s):

Investment Decisions ◽

International Investment ◽

State Regulation ◽

Tourism Industry ◽

State Support ◽

High Risk Factors ◽

The Republic ◽

Favorable Conditions ◽

Regulatory Practice ◽

Legislative Measures

The possibilities of developing the tourism industry in the Republic of Kazakhstan based on attracting investment and public-private partnerships (PPP) are examined in this article. The goal of the study is to analyze the possibilities of investing in the tourism industry of Kazakhstan with due consideration of the risk component and to determine the main strategic directions for the development of the tourism industry in Kazakhstan. The authors have analyzed the tourism regulatory practice in the Republic of Kazakhstan and identified the main problems of the tourism industry. The analysis has indicated that the large territory of the country, underdevelopment of the tourism infrastructure, and unwillingness of the tourism business to invest in its development are high-risk factors that require more global investment in the development of the tourism industry. The development of the tourism industry is supposed to be carried out with the comprehensive state support through the creation of a special system of legislative acts and favorable conditions for attracting investment and developing infrastructure. The approaches to attracting investment in various areas of the tourism industry, adopted by the leadership of various countries, have been considered. The authors have proposed recommendations for improving legislative measures and measures of state support for the tourism industry in Kazakhstan, primarily those that should secure the investment flows, based on the analysis of international experience and practice of the tourism industry in Kazakhstan. The issue of attracting international investment to the tourism industry in PPPs has been considered separately. The conclusions and proposals made on the basis of the research results can be used in the regulatory activities of specialized state bodies, taken into account when making investment decisions, and used as educational and methodological materials in the study of state regulation of tourism.

Travelling the National Route: South Africa's Protection of Investment Act 2015

African Journal of International and Comparative Law ◽

10.3366/ajicl.2018.0230 ◽

2018 ◽

Vol 26 (2) ◽

pp. 242-263

Author(s):

Tarcisio Gazzini

Keyword(s):

South Africa ◽

South African ◽

Foreign Investment ◽

International Investment ◽

Strong Response ◽

Foreign Investors ◽

Public Rights ◽

Private And Public ◽

Investment Treaties ◽

Settlement Of Disputes

The South African Protection of Investment Act 2015 is a strong response to the perceived inadequacy of investment treaties, which are facing growing criticism for their unbalanced character, the undue restrictions on policy space and the shortcomings of the mechanism for the settlement of disputes. While other states have opted for a revision of their treaty models (i.e. India), concluded innovative BITs (i.e. the BIT between Morocco and Nigeria, not yet in force) or preferred facilitation agreements (i.e. Brazil), South Africa has taken a different route based on the assumption that domestic legislation is more appropriate than international legal instruments to regulate foreign investment. The Act is firmly anchored to the Constitution and provides a level of substantive and procedural protection that efficiently preserves South African sovereign prerogatives, but definitely falls short of that commonly ensured under international investment treaties. While states obviously need to balance the private and public rights and obligations at stake with a view to pursuing their economic and social development policies, it remains to be seen whether the drastic reduction in the protection of foreign investors operated by the Act was unavoidable and what impact it may have on the flow of foreign investment to South Africa. The article ultimately reflects on the implications of the Act from the standpoint of the protection enjoyed by foreign investors under both customary international law and investment treaties currently binding South Africa.

Heuristic-driven bias in property investment decision-making in South Africa

Journal of Property Investment and Finance ◽

10.1108/jpif-08-2014-0055 ◽

2016 ◽

Vol 34 (1) ◽

pp. 51-67 ◽

Cited By ~ 5

Author(s):

Gert Abraham Lowies ◽

John Henry Hall ◽

Christiaan Ernst Cloete

Keyword(s):

South Africa ◽

Decision Making ◽

South African ◽

Investment Decision ◽

Investment Decisions ◽

Content Type ◽

Anchoring And Adjustment ◽

Fund Managers ◽

Investment Decision Making ◽

New Information

Purpose – The purpose of this paper is to determine whether anchoring and adjustment as heuristic-driven bias and herding behaviour influences listed property fund managers in South Africa’s property investment decisions. The study contributes to the understanding of the influence of heuristic-driven bias and herding behaviour on property investment decisions made in a highly volatile environment. Design/methodology/approach – This study is focused on the subject field of behavioural finance and follows a survey-based design. A questionnaire was finalised after completion of the pilot study and was sent via e-mail to fund managers of all South African-based property funds listed on the Johannesburg Securities Exchange. Non-parametric statistical measures were used. Findings – Consistency with other studies suggests that anchoring and adjustment may exist in the decisions made by listed property fund managers. However, fund managers tend to not adjust to new information due to the current socio-political environment in South Africa rather than a lack of understanding of the new information. Practical implications – It is recommended that investors form developed and emerging economies take notice of the highly volatile circumstances in which property fund managers in an emerging economy such as South Africa have to make investment decisions. The probability of missed gains as a result of conservative investment strategies may have an impact on future returns. Originality/value – This study enhanced the understanding of the role that heuristic-driven bias plays in the South African property industry and more importantly, it went some way towards enhancing understanding of behavioural aspects and their influence on property investment decision making in an emerging market.

Monitoring intensity, investment inefficiency and institutional shareholders: Evidence from JSE listed companies in South Africa

Investment Management and Financial Innovations ◽

10.21511/imfi.18(3).2021.01 ◽

2021 ◽

Vol 18 (3) ◽

pp. 1-15

Author(s):

Oloyede Obagbuwa ◽

Farai Kwenda ◽

Gbenga Wilfred Akinola

Keyword(s):

South Africa ◽

Stock Exchange ◽

Emerging Market ◽

Generalized Method Of Moments ◽

Investment Decisions ◽

Governance Mechanism ◽

Johannesburg Stock Exchange ◽

Corporate Decisions ◽

Corporate Governance Mechanism ◽

Institutional Shareholders

This study investigates how variation in monitoring intensity affects the efficiency of firms’ investment decisions in an emerging market in South Africa. The study hypothesis argues that the distraction of institutional shareholders has a statistically significant positive effect on corporate investment inefficiency. Using a more robust Generalized Method of Moments (Sys GMM) estimation approach to analyze data collected for firms listed at the Johannesburg Stock Exchange (JSE) for the period 2004–2019, the results showed that the distraction of institutional shareholders has a positive and statistically significant impact on investment inefficiency. That is, when the attention of institutional shareholders is shifted, the intensity of their monitoring drops, and the executive is involved in investment decisions that are not profitable. This insight has an implication for stakeholders and the value-creating corporate governance mechanism. The study concludes that institutional shareholders must always sustain their monitoring intensity to ensure that corporate decisions are consistent with the firm’s value.

Transformation and development towards a fully inclusive society and economy in the City of Johannesburg, South Africa

Public and Municipal Finance ◽

10.21511/pmf.06(1).2017.07 ◽

2017 ◽

Vol 6 (1) ◽

pp. 63-74

Author(s):

Paul Kibuuka

Keyword(s):

Economic Growth ◽

South Africa ◽

South African ◽

Development Strategy ◽

Social Transformation ◽

Growth And Development ◽

International Investment ◽

Inclusive Society ◽

Sustainable Economic Growth ◽

The City

This paper analyzes the state of economic growth and development in the City of Johannesburg (COJ) South Africa as by the year 2016 and presents a case for transformation and development of the City towards a fully inclusive economy and society. The research reveals that faster and sustainable economic growth in addition to proactive pro-equity policies are a sine qua non for inclusive growth and participation in the City, where the triple challenges of poverty, inequality and unemployment persist more than 20 years into the democratic dispensation. During the last 17 years the City economy has grown at almost the same pace as the national South African economy with a trend reflective of major world economic events. Going forward, the South African economy is projected to grow at less 2% annually in the next 3 years. In terms of the City, the prognosis is that the City will either continue to trace the national economic growth rate or decline from 2% in 2016 to 1% in 2018. In order to achieve the objectives and goals of the Johannesburg 2040 Growth and Development Strategy in the long term and the City Integrated Development Plan in the medium term, the City leadership and administration will need to begin by not only addressing factors that inhibit economic efficiency including crime and corruption, but also the provision of a critical pipeline of skills required by industry in order to attract local and international investment. The increase in investment is expected to broaden the revenue base and to strengthen the financial capacity of the City to roll out services to the previously disadvantaged communities so as to bring them into the mainstream of economic empowerment and social transformation.

Do portfolio managers in South Africa consider human behaviour issues when making investment decisions or advising clients?

Corporate Ownership and Control ◽

10.22495/cocv6i3p12 ◽

2009 ◽

Vol 6 (3) ◽

pp. 126-136

Author(s):

JSG Strydom ◽

JH Van Rooyen

Keyword(s):

South Africa ◽

Financial Markets ◽

Behavioral Finance ◽

Cognitive Biases ◽

Investment Decisions ◽

Efficient Market Hypothesis ◽

Efficient Market ◽

Economic Paradigm ◽

Portfolio Managers ◽

Available Information

The efficient market hypothesis is based on the assumption that individuals act rationally, processing all available information in their decision-making process. Prices therefore reflect the appropriate risk and return. However, research conducted regarding the ways that investors arrive at decisions when faced with uncertainty, has revealed that this is in fact not always the case. People often make systematic errors, the so-called cognitive biases, which lead them to less rational behavior than the traditional economic paradigm predicts. These cognitive biases have been found to be responsible for various irregular phenomena often observed in financial markets as (turbulence or, volatility, seasonable cycles, "bubbles", etc. Behavioral finance attempts to explain some of the changes in the financial markets that cannot be explained by the efficient market hypothesis. This research reviews some results from the behavioral finance and other related literature. A survey was also done to determine whether the most prominent portfolio managers in South Africa are aware of behavioral finance issues/models and consider the influence of cognitive issues when making investment decisions or giving advice to clients.