Department of Banking and Finance
Permanent URI for this collectionhttp://197.255.125.131:4000/handle/123456789/23056
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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 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 Financial innovation and banks performance in developing countries: Evidence from Ghana(John Wiley and Sons Inc, 2023) Damoah, O.B.O.; Nyamekye, K.A.; Okyere, G.A.; et al.Abstract Increase in the diffusion of information communication technology in Africa has resulted in the increase of technology-based financial products and processes. The rollout of financially innovative products and processes is being undertaken on both the macro level (by regulators and government agencies) and the micro level (banking institutions). To determine whether or not this capital-intensive investment is worthwhile or otherwise, the study collected firm-level data on banks operating in Ghana, West Africa, to examine the relationship between financial innovation indicators and bank performance. Using a quantitative design, the study employs panel regression to analyse a panel data of 21 banks (both local and foreign-owned). operating in Ghana between 2007 and 2015 The results show that financial innovation, proxied by two industrywide interventions, has a positive and significant impact on bank performance. It is recommended that deposit-taking institutions in developing countries invest in financial innovative services to increase their performance. On the macro level, governments and banking industry regulators in Africa are encouraged to invest in creating and supporting the proliferation of technology-based systems that will improve banking processes.Item Drivers of income diversification in credit unions: Do size, resource, liquidity, and environment matter?(M.D.E., 2021) Bokpin, G.A.; Amoah, B.; Ohene-Asare, K.; et al.Abstract This paper investigates income diversification in credit unions in Ghana. We make use of the random effect, Hausman–Taylor, and fractional regression to assess income diversification. We find empirical support that there exist differences between workplace credit union income diversification and other types of credit union. We also find that within nonfinancial income, size, liquidity, loan portfolio, net worth, and economic growth are important. For within liquid financial investment diversification, size, liquidity, resource usage, age, net interest margin, bank concentration, inflation, and economic growth matter. We recommend that with excess reserves, credit unions should pursue liquid financial investment.Item Willingness to pay for electronic transaction levy: empirical evidence from Ghana(African Journal of Economic and Management Studies, 2023) Amoah, A.; Kwablah, E.; Amoah, B.; Adjei-Mantey, K.Purpose – In countries where the electronic levy (e-levy) has been implemented, one question that resonates with the populace is, “how much would you want to pay for e-levy per transaction?” In response, varied perspectives have been shared with no convergence. Against this background, this study seeks to estimate people’s willingness to pay (WTP) for electronic transaction levy in Ghana, while analysing the associated determinants. Design/methodology/approach – This study relies on a survey of 2,810 respondents obtained from February 9 to 16, 2022 in Ghana. A multivariate logit model was estimated with its marginal effects. Further, a robustness check was undertaken using the linear probability model to validate the results. Findings – With respect to the sample, the authors find evidence that approximately 46% of the respondents are not willing to pay any amount per transaction for the e-levy. Second, about 21% of the respondents are willing to pay Ghs0.5% as e-levy per transaction. Furthermore, about 10% of the respondents are willing to pay 1% per transaction as e-levy. Those who indicated that they would pay rates above 1% (specifically, 1.50%– 1.75%) per transaction are less than 5%. For flat rates, approximately 10% of the respondents were willing to pay Ghs5 per month for all transactions above Ghs100. All others who are interested in other flat rates together are less than 5% of the respondents. The key statistically significant determinants of the probability that an individual would be willing to pay for the e-levy are also provided. This study recommends a comprehensive dialogue between the government and all stakeholders to reach a reasonable conclusion on an acceptable e-levy rate and by extension, implementation strategies. Originality/value – To the best of the researchers’ knowledge, this is the first empirical study that estimates individuals’ willingness to pay for e-levy on electronic transactions in a developing country.Item Impact of community health interventions on maternal and child health indicators in the upper east region of Ghana(BMC Pregnancy and Childbirth, 2023) Sakeah, E.; Bawah, A.A.; Asuming, P.O.; et al.Background This paper reports on results of a health system strengthening implementation research initiative conducted the Upper East Region of northern Ghana. Transformative interventions to accelerate and strengthen the health delivery were implemented that included empowering community leaders and members to actively participate in health delivery, strengthening the referral systems through the provision of community transport systems, providing basic medical equipment to community clinics, and improving the skills of critical health staff through training. Methods A mixed method design was used to evaluate the impact of the interventions. A quantitative evaluation employed a flexible research design to test the effects of various component activities of the project. To assess impact, a preversus–post randomized cluster survey design was used. Qualitative research was conducted with focus group data and individual in depth interviews to gauge the views of various stakeholders associated with the implementation process. Results After intervention, significant improvements in key maternal and child health indicators such as antenatal and postnatal care coverage were observed and increases in the proportion of deliveries occurring in health facilities and assisted by skilled health personnel relative to pre-intervention conditions. There was also increased uptake of oral rehydration salts (ORS) for treatment of childhood diarrhoea, as well as marked reductions in the incidence of upper respiratory infections (URI). Conclusions A pre-and post-evaluation of impact suggests that the programme had a strong positive impact on the functioning of primary health care. Findings are consistent with the proposition that the coverage and content of the Ghana Community-based Health Planning and Services programme was improved by program interventions and induced discernable changes in key indicators of health system performance.Item Increasing rice productivity in Ghana: Do savings with rural and community banks matter?(Emerald Publishing Limited, 2021) Vukey, E.Y.; Egyir, I.S.; Asiedu, E.; Kwapong, N.A.Purpose – This paper analysed the motives behind farmers’ savings with Rural and Community Banks (RCBs) and the effect of these savings on rice yield in the Hohoe Municipality of the Volta region of Ghana. Design/methodology/approach – A multi-stage sampling approach was used to draw a random sample of 222 rice farmers, and a structured questionnaire was employed to collect cross-sectional data. A Likert scale was used to rank the motive behind farmers’ savings while the endogenous switching regression model was used to estimate the effect of savings on rice yield. Findings – The results of the study showed that most farmers mobilise savings to enhance farm investment which is critical to increasing rice productivity. Improved labour and fertiliser use had a positive influence on rice yield, while farm size had an inverse relation with rice yield. Further, the findings show that savings with RCBs help mobilise the necessary finance to enhance rice productivity. In terms of the treatment effect of savings, the results indicate that farmers who patronise saving products of RCBs recorded a statistically significant average yield of 1.41 Mt/ha more than those not patronising saving products from any bank. Practical implications – While the literature on agricultural finance focuses largely on credit, this study demonstrates that savings hold significant benefits for the development of agriculture through productivity gains. The importance of this demonstration is further shown by the fact that credit access depends on the ability to save in most developing countries. Social implications – There is a need to educate farmers about the essence of patronising formal savings products. Originality/value – This study represents the first attempt at linking farmers’ savings to agricultural productivity using an econometric methodology in Ghana. The study serves as a foundation paper and for that matter will serve as a guide to future research on savings mobilisation and agricultural productivity nexus.Item Sectoral Loan Portfolio Concentration and Bank Stability: Evidence from an Emerging Economy(Journal of Emerging Market Finance, 2019-12-20) Kusi, B.A.; Adzobu, L.; Abasi, A.K.; Ansah-Adu, K.In this study, the effect of sectoral loan portfolio concentration on bank stability is investigated in the Ghanaian banking sector between 2007 and 2014. Specifically, we investigate the linearity and non-linearity effects of sectoral loan concentration on bank stability given the limited exploration of this nexus. Employing a two-step generalized method of moments (GMM) robust random and fixed effects panel models of 30 banks, the study provides evidence showing that sectoral loan concentration weakens the stability of banks. This confirms the concentration-fragility hypothesis and the diversification theory of traditional banking but may promote bank stability beyond a certain threshold point. This implies that bank sectoral loan concentrate has a direct non-linear U-shape effect on bank stability in Ghana. We argue that although sectoral loan concentration may weaken stability of banks in the short run, it may however enhance the stability of banks in the long run through prolonged expert knowledge, experience and understanding of sectors. From these findings, policymakers, regulators and bank managers must not only develop and design policies and regulations that prohibit sectoral loan concentration but should also incorporate plans and policies that encourage banks to develop core competence and competitive advantage to take advantage of advancing bank stability through sectoral loan concentration.Item Debt Capital Structure and Credit Information Sharing: Evidence on Listed Firms from an Emerging Market(Journal of African Business, 2020-04-01) Kusi, B.A.; Dzeha, G.; Gyan, K.K.; Turkson, F.E.This study examines the effect of credit information sharing on debt financing structure of listed firm on the Ghana Stock Exchange market between 2003 and 2013. Employing a panel data of 20 listed non-financial firms in Ghana in robust ordinary least squares, random effect and fixed effect models, findings are presented on how information sharing affect debt financing structure. Findings show that information sharing, coverage quality and the presence predominantly promote short-term debt financing options while these at the same time detract long-term debt financing options. While the positive nexus between credit information sharing and short-term debt financing confirms the information asymmetry and information sharing theories, We attribute the negative nexus between credit information sharing and long-term debt financing options to the shallow and weak nature of credit information sharing activities and institutions; hence making it difficult to permeate risks and uncertainties surrounding long-term financing options. This is an indication that credit information can increase access to debt financing for firms. These findings imply that policymakers must enact policies and laws that deepen, expand and enhance the coverage and quality of credit information in order for the full potency of information sharing can be realized on the debt financing structure of firms.Item Understanding and controlling financial fraud in the drug industry(Journal of Financial Crime, 2020-01-31) Andoh, C.; Akomea-Frimpong, I.Purpose – This study aims to assess the fraud cases, factors and control measures of financial fraud in the drug industry with evidence from Ghana. Drug industry and pharmaceutical are the same, and they are used interchangeably in this study. Design/methodology/approach – Data from questionnaires were collected from 412 manufacturers, wholesalers and retailers of the drug industry. Data were presented and analysed with descriptive statistics and probit regression. Findings – Results show that, in general, stealing of drugs, stealing of cash, usage of fake cheques, falsified documents and dubious accounting practices are some of the fraud cases in the industry. Factors such as gender, educational level, religious beliefs, regulatory 7measures, pressure, rationalization and opportunities influence financial fraud in the drug industry. Control measures such as thorough assessment of products, regular review of fraud policies, installation of fraud-detection software and effective internal systems could reduce the menace. Research limitations/implications – The paper addresses a number of theoretical and systemic issues on financial fraud in the drug industry but with limited specific quantitative data or calculations as well as limited sample size. Further studies could offer a more quantitative approach with a larger sample size in an attempt, for instance, to estimate the financial costs of financial fraud to the drug industry. Practical implications – This paper openly tackles various attempted frauds and financial malfeasances from stakeholder perspectives in the drug industry. Practical measures have been given to tackle the consequences of the menace. Originality/value – This paper is geared towards providing valuable learning points for stakeholders in the drug industry to handle daily operations to assist them in detecting and preventing similar occurrence of financial fraud.