The Finance–Mining Nexus in South Africa: How Mining Companies Use the South African Equity Market to Speculate.
Until recently, the deepening of financial markets in developing countries has been widely seen as growth-enhancing. A well-developed capital market – so the argument goes – provides a source of finance for productive investment, thus fostering growth. South Africa possesses one of the oldest stock...
| Publicado en: | Journal of Southern African Studies Vol. 41; no. 1; pp. 9 - 29 |
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| Formato: | Case Study |
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Taylor & Francis Ltd
Feb2015
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=100491967&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 100491967 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 03057070 JSF jtl: Journal of Southern African Studies issn: 03057070 maglogo: N pubinfo: dt: Feb2015 vid: 41 iid: 1 pid: 377 pub: Taylor & Francis Ltd artinfo: ui: 100491967 10.1080/03057070.2015.991601 ppf: 9 ppct: 20 formats: fmt: – @attributes: type: T db: hlh ui: 100491967 – @attributes: type: P db: hlh ui: 100491967 tig: atl: The Finance–Mining Nexus in South Africa: How Mining Companies Use the South African Equity Market to Speculate. aug: au: Karwowski, Ewa affil: Department of Economics, Kingston University su: South Africa Economic development Stock exchanges Mining corporations Mineral industries Liquidity (Economics) Assets (Accounting) South African economy sug: subj: Economic development South Africa Financial Transactions Processing, Reserve, and Clearinghouse Activities Central credit unions Coal and Other Mineral and Ore Merchant Wholesalers Mineral, ore and precious metal merchant wholesalers Securities and Commodity Exchanges Stock exchanges Mining corporations Mineral industries Liquidity (Economics) Assets (Accounting) South African economy ab: Until recently, the deepening of financial markets in developing countries has been widely seen as growth-enhancing. A well-developed capital market – so the argument goes – provides a source of finance for productive investment, thus fostering growth. South Africa possesses one of the oldest stock exchanges among emerging economies, making the country a good case study to scrutinise such growth-enhancing effects. Employing a detailed – and original – analysis of company annual reports and financial statements, this article questions the validity of the growth-enhancing claims made for financial deepening. Although the South African equity market is a source of substantial funds for mining companies, the consequences of their activity do not appear to enhance growth but rather to induce financial fragility. New evidence will show that listed mining companies use financial markets to support their speculation in mining assets. As a consequence, financial funds are channelled into few productive activities with limited impact on job creation. Crucially, detrimental effects on monetary policy and domestic credit growth can be expected, since external finance is not flowing towards productive investment but ends up as cash holdings on corporate balance sheets. This trend in turn encourages rapid credit expansion, which recently favoured unsustainable consumption-driven growth in South Africa,1 leaving the country with heavy job losses and high household debt in the aftermath of the global financial crisis. pubtype: Academic Journal doctype: Case Study src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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