Browsing by Author "Bokpin, G. A."

Now showing 1 - 20 of 24

Antecedents and Consequences of Board Interlocks: Evidence from the Ghana Stock Exchange
(University Of Ghana, 2016-06) Cofie, Y.; Bokpin, G. A.; Mensah, L.; College of Humanities, Business School,Department of Banking and Finance
This study investigates the antecedents and consequences of board interlocks on the Ghana Stock Exchange .The study looks at how factors such as the auditor network , industry network, foreign or local ownership network, gender effect, age effect, gender homophily and age homophily could influence the formation of interlocks between firms. The study also examined the relation between interlocks and Return on Assets, Return on Equity and Profitability among the firms. Data for the study was based on a five year panel data covering 2005 to 2009 on 35 listed companies on the Ghana Stock Exchange. The data was transformed from a bipartite to a co-affiliations data using the Bonacich transformation approach. The estimation technique applied by the study is the Hubert and Mantel MR-QAP to perform logistic regression across the cells of the dependent and Independent matrices. The study found that auditor network, industry network and age homophily had significant effect on who is appointed as a board member by these firms. Also firms that shared common board members displayed similar performance patterns which was tested using the constant homophily, variable homophily and the structural block models. The study therefore recommends that policy makers should take a look at the influence the auditors are having on board interlocks and firms should appoint members who sit on boards of well performing firms.
Assessing the Corporate Governance Practices of the Hospitality Industry
(2009) Bokpin, G. A.; Stella, N.E.,
The purpose of this study is to examine the governance practices of the hospitality industry in Ghana. The study compares the governance practices of two sets of hotels (3-star and 4-star hotels) within the context of best practices around the world. The study adopts a comparative case study methodology by comparing the governance structures of 3-star and 4-star hotels. This is meant to ascertain whether these classes of hotels exhibit different or similar governance practices. The findings revealed that governance practices did not meet best practices around the world. Even though, the corporate governance practices are in line with the provisions of the Companies Code, lapses are widespread reflected in board composition and board sub-committee (audit committee) to slate of other procedures that depart from international best practices. It was ascertained that there were similarities and differences in the governance practices of the two classes of hotels. This raises serious concerns which must be addressed if the hospitality industry is to offer the needed boost to the economy of Ghana. The originality of the paper lies in the fact that it considers a unique sector often neglected by researchers in Ghana and also within Sub-Saharan Africa.
Bootstrapping and Allocation of Assets on Stock Markets in Africa
(University of Ghana, 2015-07) Mills, E. A.; Mensah, L.; Bokpin, G. A.; University Of Ghana, College of Humanities, Business School, Department of Banking and Finance
The purpose of this study is to construct a composite optimal risky portfolio across eleven African countries from which optimal portfolio decisions can be made by investors. This is done through a static model. The study further assesses how robust the optimal portfolio is to possible variations in economic conditions of a country through the use of a bootstrap algorithm. This, therefore, makes the optimal choices of this study reliable and robust to non-normality biases. The various optimal choices for various investors are also examined. The study found that although, the individual African countries’ portfolios are highly risky, a well-diversified portfolio can offer a better risk-return trade-off by reducing the risk and increasing the expected return. The outcomes of the study also indicated that possible variations that can affect macroeconomic variables, resulting in differences in returns can have a significant effect on optimal choices. Also, the percentage investors would apportion to portfolios of risky assets depends on their risk preferences.
Corporate Disclosure and Foreign Share Ownership: Empirical Evidence from African Countries
(2014) Bokpin, G. A.; Isshaq, Z.,; Nyarko, S. E.
Corporate Governance and Transparency: Evidence from Stock Return Synchronicity
(Emerald Group Publishing Limited, 2014) Ntow-Gyamfi, M.,; Bokpin, G. A.; Gemegah, A.,
Purpose – The purpose of the study is to examine the influence of corporate governance on the flow of firm-specific information in an emerging market. Design/methodology/approach – Synchronicity is estimated under assumptions of contemporaneous and non-contemporaneous relationship between individual stock returns and the market return. Possible thin-trading effect is also corrected using the Dimson’s Beta approach to estimate synchronicity. In the main empirical model, both the Panel-Corrected Standard Errors and the Generalized Least Square estimations were used to provided robust evidence of governance influencing transparency. Findings – Corporate governance was found to broadly influence the release of firm-specific information in a relatively opaque market through the information environment. However, no evidence in support of the “auditor-reputation effects” theory was found. As well, CEO duality does not create an individual powerful enough to reduce the monitoring role of boards. We further document the presence of noise trading on the Ghana Stock Exchange. Practical implications – This study suggests that specific corporate mechanism practices have implications for stock selection in a relatively high information asymmetry Capital Market. Investors require transparency; hence, firms with governance mechanisms that elicit such transparency are likely to attract investors. Originality/value – This study is the first to examine the relationship between governance and transparency while using stock return synchronicity as a proxy for transparency in an emerging Ghanaian Capital Market.
Determinants and Value Relevance of Corporate Disclosure: Evidence from the Emerging Capital Market of Ghana
(2013) Bokpin, G. A.
Purpose – The purpose of this paper is to document the determinants and value relevance of corporate disclosure and transparency on the Ghana Stock Exchange (GSE). Design/methodology/approach – The paper employs the Fama and French model by relating firm value to firm level characteristics, with a sample of 27 firms on the GSE over a six-year period (2003-2008) Findings – The author found positive though statistically insignificant relationship between corporate disclosure and firm value represented by market to book value ratio and negative for stock price. Consistent with the political cost, signalling, agency and economic theories of corporate disclosure, the author found firm size, financial leverage, audit quality, age and profitability to be significant firm level characteristics determining corporate disclosure in Ghana. Though the adoption of IFRS is significant, it has marginally improved disclosure, though perhaps it is observed more in breach than in compliance and practical steps must be taken to improve disclosure practice on the GSE. Originality/value – The main value of the paper lies in providing further evidence of the value relevance and determinants of corporate disclosure using emerging data.
Determinants and Value Relevance of Corporate Disclosure: Evidence from the Emerging Capital Market of Ghana
(2013) Bokpin, G. A.
Purpose – The purpose of this paper is to document the determinants and value relevance of corporate disclosure and transparency on the Ghana Stock Exchange (GSE). Design/methodology/approach – The paper employs the Fama and French model by relating firm value to firm level characteristics, with a sample of 27 firms on the GSE over a six-year period (2003-2008) Findings – The author found positive though statistically insignificant relationship between corporate disclosure and firm value represented by market to book value ratio and negative for stock price. Consistent with the political cost, signalling, agency and economic theories of corporate disclosure, the author found firm size, financial leverage, audit quality, age and profitability to be significant firm level characteristics determining corporate disclosure in Ghana. Though the adoption of IFRS is significant, it has marginally improved disclosure, though perhaps it is observed more in breach than in compliance and practical steps must be taken to improve disclosure practice on the GSE. Originality/value – The main value of the paper lies in providing further evidence of the value relevance and determinants of corporate disclosure using emerging data.
Does Non-Interest Income Make Banks More Risky? Retail Vs Investment Banking Activities in Africa.
(University of Ghana, 2015-07) Ansah-Addo, L.; Bokpin, G. A.; Mensah, L.; University of Ghana, College of Humanities, Business School, Department of Banking and Finance
The study examines how increasing the shares of fees and commissions, trading income and total non-interest income makes African banks more risky, for banks that specialize in either retail or investment banking activities. The study used financial information obtained from the Bankscope database to construct a panel of African banks from 2008 to 2012. The study used the Ordinary Least Square (OLS) regression model with Newey – West standard errors, robust for heteroskedascity and autocorrelation. The findings indicate that when non-interest income interact with bank assets (size), it was revealed that as banks grow in size, they become more aggressive in their earnings and increase risk exposure from earning from fees and commissions’ income and trading income. Thus large banks must reduce earnings from non-interest activities; fees and commissions’ income and trading income, in order to reduce risks and become more stable. Smaller banks can also reduce risk and become more stable from increasing earnings from non-interest income. Findings along retail and investment activities indicated that trading income significantly increase risks and makes banks unstable for both retail and investment activities, because earnings for trading activities is based on speculations and are highly volatile. On the whole, the study found evidence to suggest that banks that diversify into fees and commissions’ income as well as trading income, in relation to their asset size, make banks more risky and increases the instability of the bank. For sustainable business practices, banks are advised to design new products for their retail activities, to enhance opportunities for generating fees and commissions’ income, in order to become more stable through income diversification.
Efficiency and Risk-Taking Behaviour of Ghanaian Banks
(2012) Isshaq, Z.,; Bokpin, G. A.; Amoah, B.
An Examination of the Corporate Governance Practices of Ghanaian Media Institutions”, Corporate Governance
(2009) Bokpin, G. A.
Expansion and efficiency in banking: Evidence from ghana.
(2012) Isshaq, Z.,; Bokpin, G. A.
We use a translog functional form to estimate a stochastic frontier function of cost and profit efficiency (PE) of Ghanaian banks under the Battese–Coelli time-varying decaying inefficiency parameterization for (unbalanced) panel data. We regressed efficiency estimates on a distance variable controlling for bank size, total cost, and profits. We find that Ghanaian bank PE is worsening, whereas cost efficiency is improving for the period analyzed. Our results show that PE is not related to distance, size, or cost and profitability ratios. Distance is however positively and significantly related to cost efficiency. Cost efficiency is however not influenced by size or cost and profit ratios.
Financial Access and Firms’ Productivity in Sub-Saharan Africa
(University of Ghana, 2016-06) Kunawotor, M. E.; Ackah, C.; Bokpin, G. A.; University of Ghana, College of Humanities, Business School, Department of Finance and Banking
This study aimed at finding the effect of financial access and other potential determinants on productivity of firms in Sub-Saharan Africa. Data was sourced from the World Bank‟s Enterprise Survey for 2,830 manufacturing firms collected over the period 2003 – 2014. With the aid of the Semi-parametric approach by Levinsohn and Petrin which uses intermediate inputs to proxy for unobservable productivity shocks, total factor productivity was estimated and regressed on several variables including financial access proxied by line of credit/loan and access to an overdraft facility. The result indicates that access to cost-effective line of credit/loan or an overdraft facility has positive and statistically significant effect on firms‟ productivity. Using firms‟ age, size and location as control level variables, the study found foreign ownership, exports and internationally-recognised quality certification to be positively related to productivity whilst frequent power outages and female managers to adversely affect productivity. These findings are consistent with robustness checks using alternative approaches. The study therefore suggests that credit constraints should be significantly relaxed, starting with governments in Africa lessening their policy rates. Also firms should acquire internationally recognised quality certification and take part in exporting of their products as well as allowing foreign partnerships on their shareholding structure.
Financial Market Development and Corporate Financing: Evidence from Emerging Market Economies
(Emerald Group Publishing Limited, 2010) Bokpin, G. A.
Purpose – The purpose of this paper is to examine the effects of financial market development on corporate financing of emerging market firms to ascertain whether or not interactions in the financial market has any impact on the available choice of financing of firms. Design/methodology/approach – Panel data covering the period 1990‐2006 for 34 emerging market economies were analyzed within the framework of Pesaran's dynamic fixed effect model and the pooled mean group estimator to capture the short‐ and long‐run effects of the covariates on the endogenous variables. Findings – The findings of the research indicate significantly that the direction and magnitude of the impact of financial market development and macroeconomic variables on capital structure vary with the maturities of the security issue. It is also documented that firm level variables such as profitability, investment opportunity, asset tangibility and risk are equally important in predicting firms' capital structure decisions. The findings also indicate that economy wide variables such as gross domestic product per capita are significant predictors of financing choices of firms. The results of the study generally support existing literature on the impact of financial market development, macroeconomic variables and certain firm level factors on capital structure. Originality/value – The paper considers unique data from emerging market economies over a 17‐year period.
Foreign Direct Investment and Environmental Sustainability in Africa: The Role of Institutions and Governance
(Elsevier, 2017) Bokpin, G. A.
The African continent continues to explore more avenues to increasing its share of the global FDI inflows. In the midst of all these, very little has been said about how FDI among others contribute to the environmental degradation of the continent. Literature is sparse when it comes to how eco-unfriendly FDI flows could be, albeit it’s economic growth prowess. In this very study, we employ the use of a 24 year panel data (1990–2013) across Africa to investigate the impact of FDI inflows on the eco-system in order to situate Africa’s FDI flows within the sustainability development agenda popularized in the 80s. For the first time, we investigate how governance and institutions may regulate the impact of FDI on environmental sustainability. We do this conscious of the fact that other factors could also impact negatively on Africa’s eco-system which we control for in the empirical model. The empirical results compositely reveal an increase in FDI inflows significantly increases environmental degradation; hence causing a negative impact on sustainability of the environment. Year dummies indicate that environmental degradation in the post 2010 era is greater than degradation in 1990 which was used as the reference point. The study affirmed that, for FDI to have a positive impact on environmental sustainability, there need to be strong governance and quality institutions in place to check the conduct of businesses financed through the FDI flows. The study provides empirical evidence to anchor governance and institutional policy prescriptions towards reducing the negative impact of FDI flows on environmental sustainability within the sustainable development preposition.
Foreign Direct Investment and Natural Resources in Africa
(2015) Bokpin, G. A.; Mensah, L.,; Asamoah, M.E.
Macroeconomic Development and Capital Structure Decisions of Firms: Evidence from Emerging Market Economie
(Emerald Group Publishing Limited, 2009) Bokpin, G. A.
Purpose – The purpose of this study is to examine the effect of macroeconomic factors on capital structure decisions of emerging firms. Design/methodology/approach – A panel data covering a period from 1990 to 2006 for 34 emerging market countries were analyzed using the seemingly unrelated regression approach to mitigate the effects of multicollinearity and to test for the stability of parameter estimates across the countries. Findings – The results largely suggest that the effect of macroeconomic factors on capital structure varies with capital structure measurement variable in most cases. Bank credit is significant in predicting capital structure choices of firms. The findings of the research also indicate a significantly negative relationship between gross domestic product (GDP) per capita and capital structure choices. Inflation on the other hand positively influences the choice of short‐term debt over equity. Stock market development is however insignificant in predicting capital structure decisions of firms and expectations of increasing interest rate positively influences firms to substitute long‐term debt for short‐term debt over equity. Most of the control variables namely asset tangibility, return on equity, return on assets and Tobin's Q were significant predictors of corporate financing. The results of the study generally supports existing literature on the impact of investment opportunity set, profitability, and stock market development, inflation, interest rate GDP per capita and bank credit on the capital structure decisions of firms. Originality/value – The main value of this paper is to analyze the effect of macroeconomic factors on the capital structure decisions of firms using large dataset from emerging countries.
Market Reaction to Dividend Announcements on the Ghana Stock Exchange
(2014) Isshaq, Z.,; Bokpin, G. A.
Ownership Structure, Corporate Governance and Bank Efficiency: An Empirical Analysis of Panel Data from the Banking Industry in Ghana”, Corporate Governance
(Emerald Group Publishing Limited, 2013) Bokpin, G. A.
Purpose – The purpose of this paper is to document the effect of ownership structure and corporate governance on bank efficiency in the Ghanaian banking industry. Design/methodology/approach – The author applies both accounting data and efficiency measures from the period 1999‐2007 via panel data analysis. Efficiency is measured by computing distances from the stochastic frontiers of estimated translog cost and profit functions. These efficiency measures are regressed on ownership and governance variables with dummy variables for bank types. Findings – The results show that foreign banks are more cost‐efficient than domestic banks, but not necessarily more profit‐efficient. Nevertheless, foreign banks are more profitable than domestic banks and enjoy better quality loans. Managerial ownership leads to the cost inefficiency of banks. Banks with inside ownership are unprofitable overall but maintain a high loan quality. Governance (a larger board size) strongly improves profit efficiency but slightly worsens banks' cost efficiency. Finally, the capital adequacy ratio and bank size are both significant predictors of bank efficiency in Ghana. Originality/value – Few, if any, studies have been carried out in the Ghanaian banking industry.
Ownership structure, corporate governance and bank efficiency: An empirical analysis of panel data from the banking industry in ghana.
(2013) Bokpin, G. A.
Purpose – The purpose of this paper is to document the effect of ownership structure and corporate governance on bank efficiency in the Ghanaian banking industry. Design/methodology/approach – The author applies both accounting data and efficiency measures from the period 1999-2007 via panel data analysis. Efficiency is measured by computing distances from the stochastic frontiers of estimated translog cost and profit functions. These efficiency measures are regressed on ownership and governance variables with dummy variables for bank types. Findings – The results show that foreign banks are more cost-efficient than domestic banks, but not necessarily more profit-efficient. Nevertheless, foreign banks are more profitable than domestic banks and enjoy better quality loans. Managerial ownership leads to the cost inefficiency of banks. Banks with inside ownership are unprofitable overall but maintain a high loan quality. Governance (a larger board size) strongly improves profit efficiency but slightly worsens banks' cost efficiency. Finally, the capital adequacy ratio and bank size are both significant predictors of bank efficiency in Ghana. Originality/value – Few, if any, studies have been carried out in the Ghanaian banking industry.
Ownership Structure, Corporate Governance and Capital Structure Decisions of Firms: Empirical Evidence from Ghana
(2009) Bokpin, G. A.; Arko, C. A.,
Purpose – The purpose of this paper is to examine the effect of ownership structure and corporate governance on capital structure decisions of firms on the Ghana Stock Exchange (GSE). Design/methodology/approach – To analyze the impact of ownership structure and corporate governance on firms' financing decisions, unbalanced panel data covering a period from 2002 to 2007 is employed using the seemingly unrelated regression approach to mitigate the effects of multicollinearity among the regressors. Findings – The regression results reveal that managerial shareholding significantly positively influences the choice of long‐term debt over equity. Among the corporate governance variables, board size is found to be positively and statistically significantly related to capital structure choices. Firm level factors such as volatility in earnings, asset tangibility, dividend payout ratio and profitability are significant determinants of corporate capital structure decisions on the GSE. The findings are largely consistent with theories of capital structure decisions observed in the literature. Originality/value – The main value of this paper is to provide a comprehensive understanding of the impact of forms of ownership and other governance practices on capital structure decisions of firms from an emerging market perspective.