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Item Financial inclusion and inclusive growth in Africa: What is the moderation role of financial stability?(Cogent Economics & Finance, 2023) Iddrisu, K.; Abor, J.Y.; Doku, J.N.; Dziwornu, R.This article aims to explore the interplay between financial stability, financial inclusion and inclusive growth in 40 African countries during the period 2004–2020. It acknowledges that an unstable financial system has the potential to erode confidence and hinder the essence of financial inclusion in promoting inclusive growth. However, studies regarding the combined effect of financial inclusion and financial stability on inclusive growth are hard to find, especially in Africa. By examining the effects of financial inclusion on inclusive growth and the synergistic relationship between financial stability and inclusive growth, this study seeks to shed light on how these factors interact in the context of African economies. To To cater for endogeneity issues, we used a two-step system-generalized method of moment. Our result reveals three outcomes: First, financial inclusion promotes inclusive growth. Second, financial stability alone is less effective at enhancing inclusive growth. Lastly, financial stability forms synergy with financial inclusion to further spike inclusive growth. It is recommended that policymakers strive to enhance financial inclusion by promoting financial stability.Item Challenges of income diversification and food security in Northern rural Ghana(Cogent Social Sciences, 2023) Salifu, G.A.; Salifu, Z.The relationship between income diversification and food security gained considerable attention in the academic literature in the last two decades. Smallholder farmers undertake income diversification activities to ensure improved food security amidst changing patterns of climate and rural socio-demographics. Understanding the challenges of smallholder farmers in income diversification strategies is critical to assessing the effectiveness of food security measures in savannah regions threatened by weather variability and environmental shocks. This study aims to shed light on the challenges of income diversification in Northern rural Ghana and to add to the growing body of research seeking to understand the challenges of income diversification and its link to the food security status of smallholder farmers in the deprived context of rural Africa. By exploiting a unique sample of 500 agricultural households in rural Ghana, we show that income diversification and the food security status of smallholders are positively related to both food access and nutritional diversity. Our results show that income diversification played a significant role in improving food access and dietary consumption. Highly diversified households were more likely to report being food secure as higher income diversification translated into higher incomes and food security. The single most important factor which stood out as an explanatory variable for food security in Northern rural Ghana was spousal incomes generated from diversification. Spousal incomes accounted for (29.2%) of the share of total household incomes used to purchase food for farm families in distress seasons. The findings support the use of spousal income diversification pathways as a means of reducing the negative impacts of food insecurity in the Yendi and Bimbilla Municipalities of the Northern Region. The study highlights the need for Ghana’s economic policy frameworks to address the following three cardinal challenges of income diversification : (1) poor access to start-up capital or funds, (2) poor condition of infrastructure, and (3) high costs of transportation, directly linked to the underdevelopment of Northern Ghana.Item Environmental disclosures and financial performance amid banking crisis and COVID-19: evidence from Ghana(Journal of Financial Reporting and Accounting, 2024) Opuni-Frimpong, J.; Akomaning, J. O.; Ofori-Boafo, R.Purpose – The purpose of this study is to examine the impact of environmental disclosures (END) on the corporate financial performance (CFP) of listed companies in Ghana before and during the Banking crisis (BKC) and the COVID-19 pandemic (COV). Design/methodology/approach – This study used data from 16 companies listed on the Ghana Stock Exchange between 2012 and 2021. The END Index was used, which uses percentile ranking and is guided by Global Reporting Initiative guidelines. A diverse set of empirical tests were used to examine whether ENDs affect CFP during crises. Findings – The study offered support for the stakeholder and signalling theories generally applied to the study of END. The results confirmed that ENDs have a significant positive effect on CFP measures, return on equity and earnings per share, before and during the crises. The BKC and COV had no impact on the CFP. Practical implications – As Ghana is still recovering from the 2017 to 2020 BKC and COV, the findings of this study highlight the need for managers to embrace END reporting and engagement strategies to improve CFP and firm reputation. Originality/value – To the best of the authors’ knowledge, this study is the first to examine the effect of END on CFP in the context of before and considering the Ghanaian BKC and COV. In addition, it is one of the few studies that investigates how ENDs affect the CFP of Ghanaian-listed firms.Item Effective monetary policy, banks’ pricing behaviour and human development in Africa(International Journal of Banking Accounting and Finance, 2022) Iddrisu, A.G.; Abor, J.Y.; Andani, A.This paper empirically examines the effect of monetary policy effectiveness on human development in Africa. We employ both micro-bank level and macro-country-level data. Bank-level data is taken from the bank scope database maintained by Fitch, IBCA, and Bureau Van Dijk. Series are yearly, covering a sample of 320 banks across 29 African countries. Panel fixed effects, random effects and IV regressions were estimated for the period 2002 to 2013. For our IV estimation, the paper explores an instrumental variable based on the fact that effective monetary policy is conditional on the independence of the central bank. The regression results that ensued suggest that first, effective monetary policy translates to high banks’ loan and deposit prices. Building on these results and employing various specifications of banks’ pricing strategy, the second test suggests that high banks’ pricing induced by effective monetary policy tends to increase human development. Results of the net effects eventually suggest that effective monetary policy, overall, does not improve human development.Item The impact of economic outlook on green fnance: insights from linkages between green and infation‑indexed bonds(Environment, Development and Sustainability, 2023) Le, T.; Abakah, E.J.A.; Goodell, J.W.; et al.While inflation-indexed bonds focus on mitigating the impact of inflation and preserving the purchasing power of investors, green bonds prioritize investments in environmentally responsible projects. These bond types offer distinct investment opportunities that cater to the diverse preferences and objectives of investors. With this in mind, this study aims to explore the dynamic relationship between inflation-indexed bonds and green bonds using wavelet analysis, quantile regression, and the Diebold-Yilmaz procedures for the period spanning October 2016 to January 2021. By considering green bonds as indicative of green energy outlooks and inflation-indexed bonds as a reflection of overall economic conditions, we investigate the hypothesis that inflation-indexed bonds dominate green bonds within a sample of emerging markets. Our findings reveal significant interdependence between green bonds and inflation-indexed bonds across various wavelet time scales. Consistent According to recent research, inflation-indexed bonds exhibit a dominant influence on the relationship, while the nature of this dependence alternates between positive and negative. Furthermore, quantile connectedness analysis demonstrates that spillover transmissions are more pronounced during extreme positive and negative market conditions. The outcomes of this study hold relevance for both investors and policymakers alike.Item Integration between emerging market equity and global markets; is it fundamental or noisy? Evidence from wavelet denoised volatility spillover analysis in time and frequency domain(Applied Economics, 2022) Jena, S.K.; Abakah, E.J.A.; Tiwari, A.K.; Roubaud, D.The study investigates the integration between the five largest emerging stock markets, Morgan Stanley Capital Emerging Market Index, and global financial markets like the US S&P 500, Brent Crude Oil and Dollar Index based on wavelet denoised volatility spillover in time and frequency domain using forecasted error variance decomposition framework. It is found that the impact of noise on connectedness is more pronounced in the short run and declines in the longer term. Further, long-term connectedness which is much higher than that of short-term connectedness confirms the existence of fundamental (noisy) concernedness in the long (short) term. The impact of noise varies by time and frequency. The policy implications are discussed.Item Does personal freedom matter for financial development in Africa?(Cogent Economics & Finance, 2024) Kwatia, B.O.; Amewu,G.; Armah,M.t has repeatedly been claimed that institutions play an important, and decisive role in economic development. Many studies have analyzed the effect of formal institutions on financial development while informal institutions have received less attention. With this paper, we contribute to the effect of personal freedom as a measure for informal institutions on financial development using annual data from 40 African countries spanning 2000 to 2020. We employ the novel fixed effect panel quantile regression technique. The study documents that, in the upper quantile, personal freedom nega tively and significantly affects financial development. This finding explicates that, a low level of personal freedom restricts human choices, limiting personal participation in the development of the financial system in Africa. Thus, personal freedom is important for Africa’s financial development. The study recommends that policymakers rally resolute support to defend and protect human rights and personal liberties that encourage human choices. Additionally, the findings intuitively reinforce the pre-requisite for African governments to regularly evaluate policies that promote financial sector development, particularly economic freedom and government expendituresItem Board Characteristics, Ownership Structures and Gender Diversity on Bank Risk-taking Behavior of Banks in Ghana(African Journal of Business and Economic Research, 2022) Musah, A.; Boye, G.N.A.; Okyere, B.; Dodor, C.T.The study examined the effect of board characteristics, ownership structure and gender diversity on bank risk-taking behaviour in Ghana. The study sampled 15 commercial banks in Ghana over a 10-year period, where data was analysed using descriptive statistics, correlation analysis and regression analysis. The analysis showed that board characteristics such as board size, the proportion of non-executive directors on the board, board chairperson independence as well as female representation on the board of banks in Ghana are significant determinants of bank risk-taking behaviour. The result shows that while board size, the proportion of non-executive directors on the board and female representation are associated with higher risk-taking behavior. chairperson independence is associated with lower bank risk-taking behaviour. On the ownership variables, the study found that foreign ownership and government ownership were significant determinants of bank risk-taking behavior, while managerial ownership was statistically insignificant. On the significant ownership structure variables: foreign ownership reduces bank risk-taking, while government ownership increases bank risk-taking. Female CEO was statistically insignificant, even though it is positively associated with bank's risk-taking level. The results show that corporate governance variables and ownership structures are significant determinants of bank risk-taking behaviourItem Tail risk dependence, co-movement and predictability between green bond and green stocks(Applied Economics, 2022) Tiwari, A.K.; Abakah, E.J.A.; Yaya, O.S.; Appiah, K.O.This paper examines the coherence of extreme returns between green bonds and a unique set of green stocks. We use the novel quantile cross-spectral coherence methodology of quantile spectral coherency model, cross-quantilogram correlation approach, windowed time-lagged cross-correlation, and windowed scalogram difference models as estimation techniques. The study period spans from 28 November 2008 to 23 September 2020. Our measure of green stocks comprises the constituents of the MSCI Global Environment Price Index: Alternative Energy, Green Building, Pollution Prevention or Clean Technology while our green bond market is proxied by S&P Green Bond Index. We find the dependency between Green Bonds and green stocks to be weak, and this is high during market downturn periods in the short- to medium-term dynamics. This suggests that Green Bonds do act as a hedge, diversifier, or safe-haven instrument for environment portfolio in the short-term, medium-term and long-term dynamics during bearish market conditions. We conclude that green bonds and green stocks are two distinct asset classes with a distinct risk-return profile despite their common climate-friendly nature.Item Intra-Africa regional trade comovements and shock transmission: A baseline for AfCFTA(Cogent Economics & Finance, 2023) Mensah, L.This paper examines the trade co-movements and shock spillover across four African geographic regions. Specifically, we were motivated by the very low intra-trade activities in Africa, despite increased regionalism to study the possibility of a country’s trade shock being transferred to its trading partners on the continent. Knowing the trade connectedness and shock transmission among African countries will serve as a baseline for the AfCFTA implementation. In our analysis, we considered the four African regional quarterly data between 2005 and 2021 from UNCTAD. The continent was divided into four regions namely, Western, Middle, Eastern, and Southern Africa. We divided the time into pre- and post-AfCFTA periods. The Dynamic Conditional Correlation (DCC) and the Diebold and Yilmaz (2012) models were adopted to determine the trade co-movement and the shock spillover respectively. The results show different trade co-movements and trade shock spillovers among the regions at different times. The trade co-movement seems to be dominant between the Middle and Southern African regions. Further analysis shows the presence of trade shock transmission across all four regions. The Western African region exhibits a sign of the biggest trade shock receiver from the other regions, while the Southern African regions turn out to be the largest contributor of trade shocks to the other regions both in the post and pre-AfCFTA period. The study contributes by sending a signal to AfCFTA implementers that trading on the African continents behaves differently among the various geographic regions. It also provides an early warning signal for AfCFTA policy implementation.Item Reputational risks in banks: A review of research themes, frameworks, methods, and future research directions(Journal of Economic Surveys, 2023) Adeabah, D.; Andoh, C.; Asongu, S.; Gemegah, A.This study examined the research trends on reputational risk in banks using a systematic literature review and network analysis (SLRNA) approach on 35 research articles published between 2010 and 2020. It was found that only developed countries (i.e., the United States and Europe) has been actively contributing to research on reputational risks in banks, suggesting that reputational risks management of banks has not gained the global attention it deserves. Moreover, we identified five broad research themes from the thematic network analysis, namely, reputational risk of operational losses, reputa national effects of media tone, performance implications of reputational risk management, management of reputational risk in banks, sustainability practices, and reputational risk of banks in the project finance market. Nonetheless, there are still several areas that require further attention. These include the conceptualization of reputational risk management in banks that explore the dynamic and interdependencies in a system think ing framework, the role of corporate governance, environmental and social issues on reputational risk, how sustainability practices shape reputational risk management, the role of political connections in mitigating the reputational effect of operational loss events, and how information and communication technology (ICT) mechanisms impact reputational risk management in banks.Item Russia-Ukraine war and G7 debt markets: Evidence from public sentiment towards economic sanctions during the conflict(International Journal of Finance & Economics, 2023) Sulong, Z.; Abakah, E.J.A.; Adeabah, D.; et al.War-related expectations cause changes to investors' risks and returns preferences. In this study, we examine the implications of war and sanctions sentiment for the G7 countries' debt markets during the Russia-Ukraine war. We use behavioural indicators across social media, news media, and internet attention to reflect the public sentiment from January 1, 2022, to April 20, 2023. We apply the quantile-on-quantile regression (QQR) and rolling window wavelet correlation (RWWC) methods. The quantile-on-quantile regression results show a heterogeneous impact on fixed-income securities. Specifically, extreme public sentiment has a negative impact on G7 fixed income securities return. The wavelets correlation result shows dynamic correlation pattern among public sentiment and fixed income securities. There is a negative relationship between public sentiment and G7 fixed-income securities. The correlation is time-varying and highly eventful dependent. Our additional analysis using corporate bond data indicates the robustness of our findings. Furthermore, the contagion analysis shows public sentiment significantly influences G7 fixed income securities spillover. Our findings can be of great significance while framing strategies for asset allocation and portfolio performance and risk hedging.Item Debt Financing, Information Sharing, and Profitability: Evidence from Listed Firms from an Emerging Economy(Journal of African Business, 2023) Osei, J.O.; Sarpong-Kumankoma, E.; Abor, J.Y.This study investigates how credit information sharing conditions debt financing to boost the profitability of 20 listed enterprises on the Ghana Stock Exchange between 2003 and 2013. We employ robust least squares and simultaneous bootstrapping models in a panel setting. Our findings show that the impact of debt financing profitability increases when it is subject to information sharing and takes the shape of short, long, and total debts. In the worst-case situation, contingent debt financing reduces the negative impact of debt financing on profitability. Therefore, authorities must adopt laws and legislation that deepen, widen, and strengthen credit information sharing to offset the negative impact of information asymmetry on loan financing and business profitability.Item Bank lending behaviour and systemic banking crisis in Africa: The role of regulatory framework(Journal of International Development, 2022) Ofori-Sasu, D.; Agbloyor, E.K.; Kuttu, S.; Abor, J.Y.We examine how regulatory framework shapes the impact of bank lending behaviour on the probability of systemic banking crisis by using data from 52 African countries over the period 2006–2018. The study found that banks that lend beyond a certain level of threshold have the greater probability of causing a systemic banking crisis. The study provides empirical evidence in support of the argument that Above-average lending behaviour reduces the predicted probability of a systemic banking crisis in the presence of audit independence, stringent capital regulatory requirements, central bank independence and monetary policy framework.Item Monetary policy, prudential regulations and bank lending behaviour in Africa(Macroeconomics and Finance in Emerging Market Economies, 2023) Ofori-Sasu, D.; Kusi, B.A.; Dzeha, G.C.; Agoba, A.M.The study examines the effect of monetary policy and prudential regulations on bank lending behaviour in Africa. This study employs the Two-Stage Least squares (2SLS) estimation technique for a panel dataset of 54 African countries over the period 2004–2021. The study finds that monetary policy and prudential regulations reduce bank lending and the impact is better in countries with a strong institutional environment. It provides evidence to affirm that monetary policy and prudential regulations provide complementarity effect in yielding a desirable outcome for bank lendingItem Political business cycle and bank liquidity creation in Ghana: the role of financial sector transparency(Macroeconomics and Finance in Emerging Market Economies, 2021) Gyeke-Dako, A.; Kusi, B.A.; Nabieu, G.A.A.; Kriese, M.This study examines how financial sector transparency (FST) achieved through credit information sharing helps reduce the BLC growth induced by PBC in an emerging economy in Africa. The study employs twenty-seven banks in Ghana over three (3) different political election cycles between 2006 and 2016. The results are estimated using robust random effect panel models with technological and year-effect controls. The results shows that (i) PBC increases liquidity creation by banks, (ii) FST administered through credit information sharing encourages BLC; (iii) the joint term of PBC and FST yields a negative synergetic effect on BLC and (iv) promoting FST dampens the growth in liquidity creation induced by PBC in Ghana. These results imply that bank managers, regulators and policymakers must be mindful of liquidity creation especially during election periods, since it can lead to soaring credit defaults and losses. Also, FST can be used as tool for suppressing growth in liquidity creation induced through PBC by helping banks screen out bad political dealings and politicians.Item Do sustainability ethics explain the impact of country-level corporate governance on financial stability in developing economies?(Journal of Sustainable Finance & Investment, 2023) Ofori-Sasu, D.; Donkor, G.N.A.; Abor, J.Y.The study presents empirical evidence on how sustainability ethics affect the relationship between country-level corporate governance and financial stability in developing countries. Employing the dynamic system Generalized Method of Moments on a panel dataset of 137 developing countries over the period, 2006–2019, the study found that the positive effect of country-level corporate governance framework on financial stability is not instantaneous. We find that internal and external corporate governance frameworks have a strong positive synergistic effect on financial stability. We confirm that corporate governance measures substitute sustainability ethics to yield a desirable outcome of financial stability. Finally, the study finds evidence to support that sustainability ethics reduce the negative impact of country-level corporate governance on financial stability. The study recommends that the build-up of quality sustainability ethics can help tame the reductive effect of the country-level corporate governance framework on financial stability in developing countries.Item Entrepreneurship, foreign direct investments and economic wealth in Africa(Cogent Business & Management, 2023) Ofori-Sasu, D.; Dzisi, S.; Abor, J.Y.The paper seeks to examine the joint effect of entrepreneurship and FDI inflows on economic wealth in Africa. It employs a dynamic system called GMM for a panel dataset of 52 African economies between 2006 and 2020. The study finds that FDI inflows induced a negative impact on the ease of doing business but it increased the business capital start-ups of entrepreneurs. We find that entrepreneurship reduces economic wealth in the short term but in the long- term, entrepreneurship positively affect economic wealth. The results show that FDI inflows increase economic wealth and that FDI is an important channel through which entrepreneurship can impact economic wealth. We find evidence to support the ease of doing business and FDI inflows are substitutes, while minimum capital of starting business complements FDI inflows in determining economic wealth. Based on the marginal effects, we conclude that entrepreneurship reduces economic wealth but improves economic wealth when the level of FDI inflows increases in a country. The implementation is that countries should provide strategies that promote economic wealth. individuals, people and entrepreneurs through prudent business development frameworks and FDI support in the short term.Item Central bank coordinated policies and bank market power: an insight from the African context(Cogent Economics & Finance, 2023) Ofori-Sasu, D.; Agbloyor, E.K.; Sarpong-Kumankoma, E.; Abor, J.Y.The paper examines the impact of central bank regulatory policies on market power in Africa. The study presents a representative sample of 52 African economies over the period 2006–2020. The study shows that the individual regulatory policies of the central bank (i.e. monetary and macro-prudential policies) enhance banks’ market power. Also, it reveals that central bank's regulatory policies are better coordinated, as complements, in achieving greater market power. banks in countries with strong central bank independence (CBI) framework. However, the coordinated policies are substitutes in determining bank’s market power in countries with weak CBI framework. The policy implication is that the right policy mix of coordinated central bank regulatory policy framework is important in determining an optimal outcome of bank’s market power in both an inclusive central bank (monetary-prudential) policy targeting economies and an independent policy targeting economies.Item Analyzing time-varying tail dependence between leveraged loan and debt markets in the U.S. economy(International Review of Finance, 2023) Tiwari, A.K.; Abakah, E.J.A.; Trabelsi, N.; Lee, C.This study analyzes the time-varying dependence between U.S. leveraged loan and debt markets within a highly linked financial system using a quantile-based, time-varying connectedness framework to determine the hedging benefits of leveraged loans for financial investors at various quarters. Based on daily closing price data from November From October 28, 2008, to October 3, 2023, the evidence demonstrates considerable (moderate) spillovers across the leveraged loan and debt markets for severe (normal) occurrences, with additional results indicating symmetric interaction. In terms of risk spillover, we also affirm the dominance of short-term fixed-income instruments over leveraged loans and long-term bonds. These findings indicate that no hedging or diversification occurred among the investigated markets.