An event study analysis of Bitcoin and Altcoins under COVID-19

Author: Mathew Abraham

Article history:
Received: 23 October, 2020
Accepted: 31 March, 2021

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Abstract (Click Here for Abstract)

Operating through blockchain, cryptocurrencies eliminate intermediaries and encourage transparency between parties. Although Bitcoin continues to be the most widely used cryptocurrency, its increased attractiveness to investors has led to the emergence of Altcoins (alternative cryptocurrencies other than Bitcoin). Employing an event study approach using the daily price series for the sample period from 1 January 2018 to 17 July 2020, the study aims to determine the impact of Covid-19 on the value of both Bitcoin and Altcoins. The evidence shows that the abnormal returns of Bitcoin and Altcoins around Covid-19 dates are negative and Altcoins are more adversely affected by the pandemic than Bitcoin. The study also documents that most altcoins rely on the same block chain technology aiming to complement or improve certain Bitcoin characteristics, and the high correlation between Bitcoin and Altcoins are likely to fail cross-currency hedging strategies during the pandemic crisis.

Cryptocurrency: Blockchain, Bitcoin, Altcoins; Event Study.

The influence of inequality, institutional quality, and foreign aid on inclusive growth in Africa

Author: Easmond Baah Nketia, Yusheng Kong , Benjamin Korankye and Sabina Ampon-Wireko

Article history:
Received: 18 August, 2020
Accepted: 3 July, 2021

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Abstract (Click Here for Abstract)

Growing inequality in Africa warrants continuing research. This study concentrates on the impact of institutional quality, income inequality, and foreign aid on inclusive growth in 48 countries in Africa spanning 2002 to 2018. By adopting the two-step system generalised method of moments (Sys-GMM), the study conducted the estimations of the model. Income inequality mostly has a negative influence on inclusive growth. All institutional quality indicators except government effectiveness positively influenced inclusive growth. Foreign aid does not help inclusive growth in Africa. On the contrary, foreign aid sometimes retards or stagnates inclusive growth. To attain and sustain a positive inclusive growth in Africa, much effort must be put in the creation of quality jobs. While halting the overreliance on foreign aid, African countries can more strategically emphasise self-centred development.

Inclusive growth, Inequality, Foreign aid, Institutional quality, Africa.

Access to credit and informal firm performance: Evidence from Sub-Saharan Africa

Author: Kwasi Gyabaa Tabiri, Eric Arthur*, Jacob Novignon and Prince Boakye Frimpong

Article history:

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The informal sector forms a significant proportion of the private sector of many developing economies. Despite challenges in exact measurement of its size, the informal sector is noted for its role in employment creation as well as economic output in sub-Saharan Africa. However, access to formal credit is a major challenge for informal firms due to the nature of their operations. This leads many entrepreneurs in the informal sector to resort to informal credit. Using the World Bank’s Informal Enterprise Surveys, this study investigates the effect of type of finance on the performance informal firms. The results show that the use of informal finance is associated with lower performance, while formal finance is associated with better performance. This study recommends integrating community-based group lending schemes with credit information systems to make it easier to assess informal enterprises for access to credit.

Informal finance; Informal firms; Firm performance; Sub-Saharan Africa

Assessing and hedging the impact of longevity risk for countries with limited data

Author: Samuel E Assabil and Francis Eyiah-Bediako

Article history:

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Abstract (Click Here for Abstract)

Almost all literature on the impact of longevity concludes that its impact is huge and can collapse any life or pension company if steps are not taken to address it. Yet, life companies in most developing countries do not account for longevity risk. This is a result of the lack of suitable mortality data needed for such valuation. In this work, we have proposed a generalized method of assessing the impact of longevity risk when mortality data is scarce and shown theoretically that our earlier proposed method is a particular case. This means that this method can be used by not just pension companies but all life companies. The method is based on our earlier proposed model which shows that there is a nearly linear relationship between annuitant’s hazard function and their mortality at higher ages (post-retirement age) which permits approximating post-retirement mortality data with the Gompertz model. The work also considers how such a risk could be managed under the assumption of limited mortality data, and shows that a range of life products whose expected return depends on the distribution of individual lifetimes could be used to hedge such a risk. Specifically, we showed how a whole life annuity product could be used to hedge such a risk.

Hedging; Longevity Risk; Interest Rate; Limited Data; Mortality.

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