Browsing by Author "Abor, J."

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Agency theoretic determination of debt levels: evidence from Ghana
(Review of Accounting and Finance 7(2): 183-192, 2008) Abor, J.
Assessing Competitive Behaviour in Emerging Banking Market:
(2012) Doku, J.N.; Abor, J.; Adjasi, C.K.D.; Andoh, C.
Assessing competitive behaviour in emerging banking market: African evidence
(Research in Accounting in Emerging Economies, 2012-01) Doku, J.N.; Abor, J.; Adjasi, C.K.D.; Andoh, C.
Purpose - This paper investigates competitive bank behaviour in Africa for the period 1999-2008 and further examines the impact of institutional quality and political atmosphere on competitive bank behaviour. Design/methodology/ approach - This study used panel data methodology based on the Panzar-Rosse (1987) design. Findings - The findings of the study indicates that the nature of banking system in Africa can best be described as monopolistically competitive. Also, our findings endorse the importance of institutional quality and political stability in fostering competitive banking sector. In particular, the rule of law shows positive and significant relationship with competitive bank behaviour. Additionally, the quality of regulations suggests positive association with bank competitive behaviour. With respect to political environment, stable political atmosphere is conducive for promoting competitive banking sector. Improved regulatory quality coupled with reduced level of perception about corruption fosters competitive bank behaviour. Originality/value - This paper provides useful information relevant to policy makers in the banking sector about the nature of bank competitive behaviour in Africa and the drivers behind the competitive behaviour. Copyright © 2012 by Emerald Group Publishing Limited.
Bank finance and export activities of small and medium enterprises
(Sciencedirect, 2014) Abor, J.; Agbloyor, E.K.; Kuipo, R.
This study examines SMEs’ access to bank finance and how that affects their export activities. The study adopts a probit model to assess the empirical relations. The findings of the study suggest that SME access to bank finance improves their likelihood to export. Such finance is critical to cater for the high fixed costs of exporting, international marketing and branding, and meeting higher quality standards required for overseas markets. The results of the study also indicate that older firms, more productive firms, and larger firms are more likely to take the important step of entering into the export market. Policy interventions should therefore be directed at reducing the bottlenecks that prevent SMEs from accessing funding from the commercial banks.
Banking Sector Development in Emerging Markets: A Review of Recent Development in Africa
(2013) Doku, J.N.; Abor, J.; Adjasi, C.K.D.; Andoh, C.
Key to the economic transformation of developing economies is the banking sector developments. The banking sector in Africa has witnessed a steady growth in its core functional areas over the recent decades. This growth has implications on access to finance and stability in the financial system. This study reviews banking sector performance, competition, access to finance and stability in the context of sub-regional and comparator regional analysis with the view to informing and shaping policy directions. The North African economies recorded high levels of financial deepening than the rest of the regions. With the same economic conditions like South Asia, East Asia Pacific and Latin America and Caribbean regions, African’s banking sector depth lags behind these regions. Access to financial institutions is high in Southern African region than the rest of the sub-regions. Again, Africa records very low level of banking sector accessibility compared to its comparator regions. Moreover, the banking system in Africa is characterized by high costs, inefficiency and high margins. The banking system also exhibit high concentration and market power and relative stability than comparator regions. The North African economies exhibit low presence of foreign banks than sub-regional groupings.
Corporate Governance and Dividend Payout Policy: Evidence from Selected African Countries
(2013) Abor, J.; Fiador, V.
Purpose – This study aims to examine the effect of corporate governance on firms' dividend payout policy in sub-Saharan Africa. The study also aims to examine how dividend payout influences corporate governance. Design/methodology/approach – Using a sample made up 27 Ghanaian firms, 177 Nigerian firms, 51 Kenyan firms, and 270 South African firms covering the period 1997-2006, the paper employs a simultaneous panel regression model in its estimation. Findings – The results show that board composition and board size exhibit significantly positive relationship with dividend payout in Kenya and Ghana, respectively. Institutional ownership positively influences dividend payout among South African and Kenyan firms. In the case of Nigeria, all the corporate governance measures show significantly negative effects on dividend payout. The findings clearly suggest that, with respect to South Africa, Kenya and Ghana, good corporate governance structures lead to high-dividend payout, probably due to easy access to and low cost of external finance. However, in Nigeria, improving the governance structures may be associated with high-earnings retention or low-dividend payment in order to reduce cost of external finance. We found in the case of Ghana that, dividend payout positively affects board composition, suggesting that Ghanaian firms with high-payout tend to adopt good corporate governance structures in order to ensure protection of shareholder interest. The findings of this study certainly have important policy implications. Originality/value – This present study contributes to the corporate governance literature by looking at the importance of corporate governance in influencing firms' dividend behaviour in selected African countries.
Corporate Governance and Earnings Management: Evidence from Sub-Saharan Africa.
(2013-12-09) Akyeampon, D.; Amidu, M.; Abor, J.
This paper examines the link between corporate governance and earnings management (EM) of firms in some selected countries in Sub-Saharan Africa (SSA). A two-step estimation procedure using firm level data is applied. The first step employs a panel data estimation technique to analyze working capital discretionary accruals (WCDAC), a proxy for EM. Building on these results, the second stage examines the sources of EM, placing emphasis on the role of corporate governance and institutions. We find that EM of firms in Africa can be explained by the size of the board, its composition, return on assets, and debt ratio. In addition, our result reveals varying results as different corporate governance mechanisms affect EM across the various countries.
Corporate governance and financing decision of Ghanaian listed firms. Corporate Governance
(International Journal Business in Society 7(1): 983-92, 2007) Abor, J.
Corporate Governance and Financing Decisions: A Study of Ghanaian Listed Firms
(University of Ghana, 2013-06) Yussif, T.J.; Abor, J.; Bokpin, G.A.
Earlier studies on the Ghana stock exchange failed to consider the influence of institutional ownership and board committee on the financing decisions of the firms. This study examines the impact of institutional ownership and board committee on capital structure decisions. The study also examines the nature of corporate board and financing pattern of the firms for the period under investigation. Twenty nine (29) firms out of total number of thirty four (34), on the Ghana Stock Exchange were used for the periods 2004 to 2011 based on the availability of data. Secondary data on board and ownership structure were obtained from the annual reports of firms and the Ghana Stock Exchange facts book. Information on best governance practices were also from the annual reports and guidelines of Ghana‟s Securities and Exchange Commission. Using unbalance data with a maximum and minimum period of 8 and 3 years respectively, the fixed effect regression technique was used to examine the effect of board characteristics and ownership structure on financing decisions of the firms. A positive and significant relationship was found in the case of board size, board composition, institutional ownership and firm type. CEO duality, board committee and profitability register negative relationships with capital structure. Managerial ownership, growth and firm size recorded not significant relationships with financing decisions. The result suggests that firms on the Ghana Stock Exchange pursue high debt policy with higher proportion of outside directors, larger board size, and higher percentage of institutional shareholdings. However, lesser number of oversight committees and one tier leadership style are associated with lower debt levels. This study therefore reaffirms that corporate governance influences financing decisions of Ghanaian listed firms. The findings of the study also shows that, the board structure of firms on the Ghana Stock Exchange is dominated by non executive directors, larger board size, two tier leadership structure and an average of two board committees. Again the ownership structure is dominated by institutional holdings. As indicated by this work, the capital structure of Ghanaian listed firms is likely to follow the pecking order theory. To access debt financing, the study recommends firms to open up for institutional investors, increase the board size, with greater percentage of it being outside directors. However increase in board size beyond a certain point would reduce debt. Also, the number of oversight board committees must be maintained at a desired minimum. Generally, it was observed that listed firms complied with rules and directives of the regulatory authorities and therefore to ensure best practices in corporate governance in the country as a whole, more firms have to be encouraged to list on the stock exchange so that regulation can compel them to exhibit the best of conducts.
Corporate governance and firm performance: Evidence from Ghanaian listed companies
(Corporate Ownership and Control, 2006-01) Kyereboah-Coleman, A.; Adjasi, C.K.D.; Abor, J.
Well governed firms have been noted to have higher firm performance. The main characteristic of corporate governance identified include board size, board composition, and whether the CEO is also the board chairman. This study examines the role corporate governance structures play in firm performance amongst listed firms on the Ghana Stock Exchange. Results reveal a likely optimal board size range where mean ROA levels associated with board size 8 to 11 are higher than overall mean ROA for the sample. Significantly, firm performance is found to be better in firms with the twotier board structure. Results show further that having more outside board members is positively related to firm performance. It is clear that corporate governance structures influence firm performance in Ghana, indeed within the governance structures the two-tier board structure in Ghana is seen to be more effective in view of the higher firm level mean values obtained compared to the one-tier system.
Corporate Governance and Restructuring Activities Following Completed Bids
(Corporate Governance: An International Review, 2011-01) Abor, J.; Graham, M.; Yawson, A.
Manuscript Type: EmpiricalResearch Question/Issue: We examine the extent to which effective corporate governance impacts three restructuring choices following completed acquisitions - significant adjustment to workforce; sale of subsidiaries; and further acquisitions. We also investigate the relative firm performance in the post-restructuring period for the three respective options examined.Research Findings/Insights: Based on a sample of 649 US firms between the period 1991 and 2009, we find support for the assertion that corporate governance impacts layoffs and further acquisitions. We, however, find no evidence to support a measurable governance effect on divestiture likelihood. In examining the post-acquisition performance following restructuring, we find no significant difference in performance between acquirers that made further acquisitions and those that did not. There is evidence, however, suggesting that acquirers who laid off workers and those that divested assets performed significantly poorer relative to a comparable group of acquirers.Theoretical/Academic Implications: This study adds to the empirical literature on the relation between governance and restructuring choices. We provide evidence on the impact of governance on restructuring choices that has not been documented in the academic literature. An implication of this study is that performance in post-restructuring period would not necessarily be enhanced even when governance exerts positive influences on restructuring choice.Practitioner/Policy Implications: Our empirical results demonstrate the relative importance of corporate governance in organizational strategic choices. This study offers insights to stakeholders interested in enhancing governance structures to influence restructuring decisions following completed bids. © 2010 Blackwell Publishing Ltd.
Corporate Governance and the small and medium enterprise sector: theory and implication
(Corporate Governance: International Journal of Business in Society 7(2): 111-122, 2007) Abor, J.; Adjasi, C.K.D.
Corporate governance, ownership structure, and performance of SMEs in Ghana: implication for financing opportunities. Corporate Governance
(International Journal Business in Society 7(3): 288-300, 2007) Abor, J.; Biekpe, N
Debt policy and performance of SMEs; Evidence from Ghanaian and South African Firms
(Journals of Risk Finance 8(4): 93-102, 2007) Abor, J.
Defined Contribution and Defined Benefits: Inherent Risks and Risk Transfers in Ghanaian Pension Schemes
(University of Ghana, 2016-02) Donkor, F.; Ofosu-hene, E.; Abor, J.; University of Ghana, College of Humanities, Business School, Department of Banking and Finance
Ghana, due to various economic and demographic factors, also growing concern among the general populace on the adequacy of pension benefits has undergone pension reform. The new Ghanaian Pension scheme set with the objective of securing pension income of plan members is a combination of the Defined Benefit (DB) and a Defined Contribution (DC) pension plans in a three-tier structure. This thesis examines three major issues affecting pension provision in Ghana. That is, the risks associated with pension schemes, and the effect of the structural and parametric changes of the new scheme on pension provision. Thirdly, a demonstration of the adequacy of pension benefits from the new scheme relative to that receivable prior to the reform considering investment risk (market risk). A simulation methodology was adopted using 10,000 simulations of risk scenarios of a plan member over a projected 40yr contributory period to demonstrate whether pension benefits under the new Pension scheme was adequate relative to a DB benchmark as was the case prior to reform. Three major conclusions are drawn; firstly, a DC pension plan may promise higher benefits relative to a DB benchmark, however, it is subject to more risk hence pension ratios are less predictable. Secondly, the asset allocation strategy used by fund managers has an influence on pension provision and one with high equity weightings in investment delivers higher benefits compared to that with less weight in equities as prescribed by the National Pensions Regulatory Authority (NPRA). Lastly, contributions to Tier 3 of pension scheme by formal sector plan members towards a personal pension or provident fund may significantly increase pension benefits. Keywords: Defined Contribution pension plan; Defined Benefit Pension Plan; Asset-allocations strategy; Social Security and National Insurance Trust (SSNIT)
Demand for Financial Services by Households in Ghana, International Journal of Social Economics
(2013) Akpandjar, G.,; Quartey, P.; Abor, J.
Purpose – The purpose of this paper is to investigate household financial choice and the determinants of financial services in rural and urban households in Ghana. Design/methodology/approach – Data from the Ghana Living Standard Survey 5 (GLSS 5) are used to estimate the participation of a household in a particular financial sector and what determines this choice. Findings – The results from Tobit and conditional logit models account for households' demographic characteristics and their financial decisions. The Tobit estimates show that household size, age, sex, marital status, occupation, income, remittances and shocks determine households' participation in the financial markets. Conditional logit model results suggest that locational characteristics are important in obtaining financial services from particular sectors of the financial market. The results also suggest that when the alternatives of financial services are available, rural households are more likely than urban households to obtain their financial services from the informal financial sector. Originality/value – This current study contributes to the existing literature from the Ghanaian perspective.
Determinants of dividend payout ratios in Ghana
(Journal of Risk Finance, 2006-03) Amidu, M.; Abor, J.
Purpose – This study seeks to examine the determinants of dividend payout ratios of listed companies in Ghana. Design/methodology/approach – The analyses are performed using data derived from the financial statements of firms listed on the Ghana Stock Exchange during a six-year period. Ordinary Least Squares model is used to estimate the regression equation. Institutional holding is used as a proxy for agency cost. Growth in sales and market-to-book value are also used as proxies for investment opportunities. Findings – The results show positive relationships between dividend payout ratios and profitability, cash flow, and tax. The results also show negative associations between dividend payout and risk, institutional holding, growth and market-to-book value. However, the significant variables in the results are profitability, cash flow, sale growth and market-to-book value. Originality/value – The main value of this study is the identification of the factors that influence the dividend payout policy decisions of listed firms in Ghana. © 2006, © Emerald Group Publishing Limited.
Determinants of inward foreign direct investment in the Ghanaian manufacturing sector
(Global Business and Economics Review, 2009) Harvey, S.K.; Abor, J.
This study investigates the determinants of foreign direct investment (FDI) in the Ghanaian manufacturing sector, using the Regional Project on Enterprise Development (RPED) dataset. The study adopts a binary logistic regression model in which the dependent variable, FDI, is expressed as a function of firm-level characteristics and location variables. The results of this study showed that firm size, capital requirement, skill intensity, labour cost, technological capability and unionisation of a firm’s workers positively affect FDI inflows. The results, however, revealed that firm age negatively affect FDI. We also found that the location and sub-sector of the firm influence FDI inflows. The main findings of this study are that, larger firms are more likely to attract FDI in the manufacturing sector. Also, firms with high capital base, skilled labour force, improved technological capability and unionised labour are often in the position to attract more FDI into the manufacturing sector.
Differences in bank profit persistence in Sub-Saharan Africa
(African Journal of Economic and Management Studies, 2018-11) Sarpong-Kumankoma, E.; Abor, J.; Aboagye, A.Q.Q.; Amidu, M.
Purpose The purpose of this paper is to examine differences in determinants of bank profit persistence among Sub-Saharan African (SSA) countries. Design/methodology/approach Using system generalized method of moments and data from four SSA countries during the period 2006–2012, this study considers differences in determinants of bank profit persistence across countries. Findings Efficiency in cost management is a major determinant of profit persistence in all the countries. However, concentration is found to be insignificant in all the estimations, suggesting that efficiency may be a more important determinant of profit persistence than concentration. Economic freedom associates negatively with profit persistence in Ghana, but its effect is insignificant in Tanzania, Kenya and South Africa. Lending specialization translates into less profit persistence in South Africa, but greater persistence in Tanzania. Higher levels of financial development result in lower profit persistence in Kenya and Ghana, but does not matter in Tanzania and South Africa. Practical implications The level of profit persistence gives an indication of the effectiveness of competition policies, and the differences observed in their determinants in this study suggest the need for tailor-made policy responses in the different countries. Originality/value This study improves the understanding of why some banking market competition policies have not achieved the desired outcomes in some countries. It is evident that blanket rules or wholesale importation of policies from other countries may not work in different contexts.
Do emerging financial markets matter in investment opportunity set? A dynamic panel analysis
(Journal of Money Investment and Banking, 2009) Abor, J.; Adjasi, C.K.D.; Bokpin, G.; Osei, K.A.