JEM Vol. 40(2), 2020


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Jean Luc Erero
2020; 40(2): 5-35;

Aim/purpose – This paper evaluates the effects of the illicit cigarette trade on the South African economy through a static Computable General Equilibrium (CGE) model. Indeed, the illicit cigarette trade occupies a prominent place in public debate in South Africa.
Design/methodology/approach – The base year Social Accounting Matrix (SAM) of the model is constructed from the data for 2015 to reflect the most recent information. The model includes a number of direct and indirect tax variables. The indirect tax section is decomposed into VAT, excise and fuel levy for analysis purposes. The household section considered all income categories with 14 distinct deciles.
Findings – One policy simulation was carried out to evaluate the effect of the illicit cigarette trade on growth and income distribution. Our findings show that the loss of R8 billion in tax revenue given the current growth of the illicit cigarette market has impacted negatively on the country’s GDP and employment rate.
Research implications/limitations – We utilised the latest available data for 2015 when constructing the SAM that was used as database for the model. The assessment of the illicit cigarette trade through the application of a CGE model provided strategies for the implementation of a specific Cigarette Governing Body, with distinct areas of accountability focusing solely on illicit cigarettes.
Originality/value/contribution – There is a need for urgent attention from the state to combat the trade in illicit cigarettes, as most of this illegal product is produced in South Africa. This paper contributes by expanding awareness amongst policy makers and the public regarding the connection between the illicit trade in licit goods, corruption, and organised criminal networks.

Keywords: illicit cigarette, CGE model, South Africa.
JEL Classification: C68, E26.


Tomasz Grzegorczyk , Robert Głowiński
2020; 40(2): 36-51;

Aim/purpose – Intellectual property right management plays an increasingly important role in firms’ business strategies. While empirical findings prove that strategic intellectual property management is positively correlated with multiple dimensions of firm performance, those competences are still rare. The research on the strategies of patent management is dispersed. Therefore, the aim of this paper is to present an analysis of the main patent strategies.
Design/methodology/approach – The method used in this paper is a narrative literature review in the area of strategic technology management.
Findings – This analysis of the most advisable patent strategies may allow its users to identify the best strategy in the given circumstances. The main patent strategies are: offensive, defensive and leveraging strategy.
Research implications/limitations – This analysis may be of importance not only for researchers dealing with technology and intellectual property management but also for firms willing to efficiently capture the value of their patent rights. A limitation of this literature review is the relatively small number of empirical studies in this area of strategic management.
Originality/value/contribution – This paper fills the research gap of the strategic choices left to managers in high-tech firms. The originality and value of this paper stem from the comprehensive analysis of patent strategies. Each of the presented strategies has their pros and cons in a given situation, illustrated by the presented cases. The choice between them should be made taking into account the enumerated factors.

Keywords: patent management, intellectual property, strategy, technology management, knowledge management.
JEL Classification: O32; 034; L24.


Elżbieta Marcinkowska
2020; 40(2): 52-73;

Aim/purpose – Blockchain is a distributed database system widely popular in social and business spheres. As a result, interest in blockchain technology is utilised by listed companies, who, thanks to the announcement of blockchain application, record a significant increase in the share value. The aim of this publication is to analyse the situation with regard to companies listed on the New Connect market, who over the last two years, expressed an interest in blockchain technology in their communication with investors.
Design/methodology/approach – Observing the range of applications of this technology in business, a study was conducted to check if and how the information on using the blockchain technology affects the quotations of the New Connect market listed companies that applied it. Qualitative comparative analysis (QCA), a method developed by Ragin was chosen as a complementary research method. An underlying assumption of QCA is that social phenomena involve complex causality.
Findings – In most cases, companies releasing blockchain application announcements counted on fast and high growth of the quotations. In most of the analysed cases, blockchain technology utilisation announcements were not fulfilled. This could be a result of conscious tactics towards investors, a rapid increase in quotations and/or a lack of competence and resources to implement blockchain technology. Investors should analyse the business activity of a company before investing.
Research implications/limitations – Research is conducted with a small sample of 11 companies from the New Connect market in Poland. Consequently, to obtain more general results, it is recommended for future research to use a larger sample such as other stock exchanges in Europe and USA.
Originality/value/contribution – The research revealed that new blockchain technology is used by some listed companies on the New Connect market for short-term share growth. Investors are becoming increasingly more attracted to the fashion for the new blockchain technology without understanding its mechanism. Accordingly, this study will also attempt to explain such a mechanism.

Keywords: blockchain, distributed ledger technology (DLT), QCA, New Connect.
JEL Classification: G10, G41, G19, L17.


Philip Ifeakachukwu Nwosa , Semira Olajumoke Tijani
2020; 40(2): 74-90;

Aim/purpose – This study aims at examining the contribution of government expenditure on service sector growth in Nigeria for the period 1970 to 2017. The service sector and government intervention are vital to economic growth of any country, hence this study.
Design/methodology/approach – The study utilised the co-integration and the error correction modelling techniques. The study also conducted the stationarity tests.
Findings – The regression estimates showed that government expenditure had negative and significant impact of service sector growth in Nigeria.
Research implications/limitations – The implication of the findings of this study is that government expenditure over the years has not contributed positively to enhance the growth of the service sector; the study therefore recommends the need for completion of various abandoned and on-going infrastructural projects, such as road construction, water provision and electrification projects, which are vital to the growth of the service sector. Moreover, the government can through the monetary authority issue directives deposit money in banks to give loans at a reduced interest rate to investors in the service sector.
Originality/value/contribution – This study has been able to show that there is the need for greater financial commitment of the government in order to improve the growth of the service sector.

Keywords: government expenditure, service sector performance, co-integration, OLS.
JEL Classification: H54.


Isiaq Olasunkanmi Oseni , Sakiru Oladele Akinbode, Daniel Akinola Babalola , Soliu Bidemi Adegboyega
2020; 40(2): 91-108;

Aim/purpose – Provision of basic education is pertinent to human capital development, poverty alleviation and abating the threat of insurgence in Africa. Governments in different countries in sub-Saharan Africa (SSA) do budget and spend various amount of money on education every year, but little is known about the effect of such spending on education, especially primary school enrolment which forms the basic educational foundation.
Design/methodology/approach – Using data for 24 countries from 2000 to 2016, this study assesses the effect of government educational spending on primary school enrol-ment in SSA by employing the System-GMM approach.
Findings – The results show that government spending has significant (p ≤ 0.05) and positive effect on primary school enrolment in SSA. The results are further confirmed using different diagnostic tests which include the Arellano–Bond test for first and second order autocorrelation in the disturbance term and the Hansen J-test for the validity of the instrumental variables. Other variables analysed (control), which have positive influence on enrolment, include GDP, general number of teachers available, and percentage trained teachers. Population growth rate negatively influences enrolment.
Research implications/limitations – The study therefore concludes that increasing spending on education by governments in SSA is sine qua non for improving primary school enrolment rate in the region.
Originality/value/contribution – This study has contributed empirically and theoreti-cally to the body of knowledge. The scope covered also makes the study uniquely robust and different from previous ones, though scanty, country-based assessments.

Keywords: primary school, enrolment, government, expenditure, GMM.
JEL Classification: G30; G32; G38.


Michał Radke 
2020; 40(2): 109-131;

Aim/purpose – The aim of the paper is to compare and create a ranking of alternative trading systems and to investigate if there is a relationship between Gross Domestic Product (GDP) and stock indices of those markets and correlation between GDP and turnover value.
Design/methodology/approach – The paper presents a comparative analysis of 13 European trading systems in such categories as: capitalisation, value of share trading, number of listed companies, number of new companies and companies removed from the market between the years 2016 and 2018. In addition, the paper includes a ranking of alternative trading systems in Europe which was created on the basis of the variables mentioned. The paper examines the correlation between GDP and indices of alternative trading systems and also between GDP and turnover value. Pearson’s correlation coeffi-cient was used to examine the correlation.
Findings – The ranking shows that the 1st place was taken by the British AIM market, which turned out to be the best in all categories under the comparison, the next two positions were occupied by the markets whose characteristic feature is that they cover several countries of the western Europe; these are the markets of First North and Alternext. The Polish market was at a fairly high 5th position among the 13 compared markets. The Greek and Russian markets came last. The relationship between the impact of GDP and index value as well as GDP and turnover value has also been examined. The research regarding the first aspect of the study confirmed the hypothesis about the correlation of GDP with the index. However, in the second case of the GDP and turnover value there is a very weak correlation.
Research implications/limitations – The limitation in the correlation study was the difficulty in obtaining data for all 13 alternative trading systems taken for the study, thus comparing four markets in the GDP correlation and the value of the index and three markets in the relation GDP and turnover value.
Originality/value/contribution – The added value of the paper is the ranking of alternative trading systems and study of correlations between Gross Domestic Product and stock indices of Alternative Trading Systems and turnover value of these markets.

Keywords: financial markets, capital markets, alternative trading systems, comparative analysis, GDP.
JEL Classification: G15, G23.