Search results
1 – 10 of 13Baah Aye Kusi, Agyapomaa Gyeke-Dako, Elikplimi Komla Agbloyor and Alexander Bilson Darku
The purpose of this paper is to explore the relationship between corporate governance structures and stakeholder and shareholder value maximization perspectives in 267 African…
Abstract
Purpose
The purpose of this paper is to explore the relationship between corporate governance structures and stakeholder and shareholder value maximization perspectives in 267 African banks from 2006 to 2011.
Design/methodology/approach
The authors used the Prais–Winsten ordinary least squares and random effect regression models to explore this relationship to ensure consistency and efficiency in results. The data for this study were collected from Bankscope.
Findings
The results of this study show that corporate governance structures such as CEO duality, nonexecutive members and extreme large board size lead to a reduction in both shareholder and stakeholder value maximization. However, audit independence and board size also promote both shareholder and stakeholder value maximization. Although gender diversity promotes profit maximization, it was not significant in any of the models estimated. The results further suggest that the same corporate governance structures promote and detract shareholder and stakeholder value maximization in Africa although the effect of corporate governance structures was weightier on shareholder value maximization confirming the agency theory.
Practical implications
From these findings, bank management must pursue the institution of good corporate governance structures and avoid weak corporate governance structures to promote shareholder and stakeholder value maximization. Also equity holders may have to pay particular attention to corporate governance structures because they benefit the most from the institution of good corporate governance structures.
Originality/value
This study explores and compares how corporate governance structures promote shareholder and stakeholder value maximization separately in African banks. To the best of the authors’ knowledge, this is the first of such studies.
Details
Keywords
This study aims to examine the nonlinear threshold effect of female board gender diversity (FBGD) on debt financing (DF) and equity financing (EF) decisions arguing that the…
Abstract
Purpose
This study aims to examine the nonlinear threshold effect of female board gender diversity (FBGD) on debt financing (DF) and equity financing (EF) decisions arguing that the effect of FBGD varies/changes depending on the numerical strength of the women on the board.
Design/methodology/approach
This study uses seemingly unrelated simultaneous panel equation modeling of 19 listed firms on the Ghana Stock Exchange (GSE) between 2010 and 2021. Although natural logs of equity and debts are used to proxy financing decisions, FBGD is measured as a percentage of total female board members to total board members.
Findings
This study reveals a nonlinear inverted U-shape effect of FBGD on EF and DF options. Although this result implies that the positive effects transit to negative effects when FBGD reaches numerical thresholds 34.20% and 35.11%, respectively, it also suggests that the risk averse nature of women on EF and DF usage becomes more visible and intense when the percentage of women on board increases above the mentioned thresholds, respectively. Clearly, the effect gender diversity on DF and EF depends on the numerical strength of the women on a board.
Practical implications
These results suggest that corporate entities and managers must be careful in the formation and implementation of gender diversity policies as gender diversity policies can influence/change debt and EF decisions. In addition, the thresholds show that a smaller number of women on board is required to lower EF compared to debt and this highlights risk-aversion nature women toward riskier financing decision. Also, the nonlinear inverted U-shape nexus from FBGD to EF and DF confirms the inverted U curve theory implying that the numerical strength of females on boards is critical for financing decisions.
Originality/value
This study contributes to the “gender diversity-financing decision” literature by simultaneously conceptualizing and modellng debt and EF structures and providing an emerging economy perspective on how gender diversity nonlinearly affects financing decisions.
Details
Keywords
Peter Kodjo Luh, Miriam Arthur, Vera Fiador and Baah Aye Aye Kusi
This study aims to examine how woman corporate leadership indicators and environmental, social and governance (ESG) disclosure in listed banks on Ghana Stock Exchange are related.
Abstract
Purpose
This study aims to examine how woman corporate leadership indicators and environmental, social and governance (ESG) disclosure in listed banks on Ghana Stock Exchange are related.
Design/methodology/approach
Data was obtained from the audited annual reports of the banks for the period 2006–2020. Empirical result estimation was achieved using Panel Corrected Standard Errors.
Findings
The result revealed that female chief executive officer (CEO), female board chairperson and board gender diversity are associated with higher disclosure of ESG issues in listed banks in Ghana in overall terms. However, in terms of individual disclosures, female board chairperson positively impacts social disclosure, whereas both female CEO and female board chairperson affect governance disclosure positively.
Research limitations/implications
In this era of business where there is much emphasis on green business and investment by various stakeholders for purposes of ensuring business legitimacy, the result implies that banks must consider females to occupy the positions of CEO and board chairperson since that can help to improve ESG performance of banks.
Practical implications
In this era of business where there is much emphasis on green business, socially responsible investment and impact investment by various stakeholders, the result implies that banks must consider improving the representation of women in leadership since that can help to improve ESG performance of banks and hence ability to attract more investors.
Originality/value
To the best of the authors’ knowledge, this is the first study to provide empirical evidence from a developing country perspective in Sub-Saharan Africa that gender of bank leadership has implications for ESG disclosure.
Details
Keywords
This study aims to examine the effect of private (PRST) and public (PUST) sector-led financial sector transparencies on bank interest margins (BIM) termed as social cost of…
Abstract
Purpose
This study aims to examine the effect of private (PRST) and public (PUST) sector-led financial sector transparencies on bank interest margins (BIM) termed as social cost of financial intermediation in different institutional quality setups.
Design/methodology/approach
This study uses a two-step dynamic generalized method of moments panel data and bootstrapped quantile models with 91 economies between 2004 and 2016. Data is sourced from World Development Indicator and Global Development Finance databases.
Findings
The results show that under strong and weak political and financial regulatory institutional setups, the reducing effect of PRST on BIM are observed and reported while the full sample reports no significant nexus between PRST and PUST on BIM. Furthermore, under political institutional quality sample, economies with strong corruption control and regulatory quality are able to reinforce the dampening effect of PRST on BIM while under the same political institutional quality sample, economies with weak rule of law are able to heighten the reducing effect of PRST on BIM. Moreover, under financial regulator institutional quality sample, economies with strong overall weighted and unweighted, chief executive officer and policy dependent central banks are able to intensify the diminishing effect of PRST on BIM while under the same financial regulator institutional quality sample, economies with weak limits on lending are able to amplify the reducing effect of PRST on BIM. However, PUST is reported to propel lower levels BIM in the bootstrap models, especially in strong institutional economies.
Practical implications
These findings imply that policymakers may rely on PRST to reduce BIM, especially under financial regulatory institutional quality. Additionally, economies must be careful on their reliance on PRST because the effectiveness of PRST to tame high BIM is dependent on the strength of political and financial regulatory institutions.
Originality/value
To the best of the authors’ knowledge, this study presents first time international evidence on the effect of private and public sector-led financial transparency on BIM in strong and weak political and financial regulatory institution economies.
Details
Keywords
Peter Kodjo Luh and Baah Aye Kusi
This study aims to investigate the impact of female chairperson, female chief executive officer and presence of females on boards on listed firms’ profitability using data from…
Abstract
Purpose
This study aims to investigate the impact of female chairperson, female chief executive officer and presence of females on boards on listed firms’ profitability using data from Ghana.
Design/methodology/approach
This study used ordinary least square estimation and generalized least square (i.e. fixed and random effect estimation techniques) estimation on the data of 15 nonfinancial listed firms on Ghana Stock Exchange between 2010 and 2020.
Findings
The results show that while males dominate corporate executive positions in listed nonfinancial firms in Ghana, females serving in top corporate executive positions like chief executive officer, board chairperson and female board membership positively impact listed firms’ performance in the form of return on assets, net profit margin and gross profit margin. These findings are consistent even when year and industry effects are controlled for. This suggests that enacting policies at the national and firm levels to encourage female participation in corporate executive roles/positions are critical for promoting firm performance.
Originality/value
This study extends extant empirical literature on the economic role of female executives in firm performance from the developing context of Ghana. With calls in literature for more studies on the subject matter in varied contexts and conditions, this study takes the discussion a step further by investigating whether the gender of those in positions such as board chairperson and chief executive officer matters in firm profitability in Ghana.
Details
Keywords
Gloria Clarissa Dzeha, Christopher Boachie, Maryam Kriese and Baah Aye Kusi
This study provides empirical evidence for the first time on how different measures of monetary policy affect banking profitability in Ghana.
Abstract
Purpose
This study provides empirical evidence for the first time on how different measures of monetary policy affect banking profitability in Ghana.
Design/methodology/approach
Providing empirical evidence on how different measures of monetary policy affect banking profitability in Ghana using 29 banks for period between 2006 and 2016, new monetary indexes are developed and a robust panel random effect models is employed with year effect controls.
Findings
The results show that while increase in monetary policy basis point reduced banking profitability, average monetary policy rate stimulated banking profitability. Interestingly, the monetary policy basis point and rate indexes developed reduced and enhanced banking profitability, respectively. While these results may sound contradictory, they have both theoretical and empirical backing. Thus, basis point increments serve a monetary policy tightening condition which leads to higher loan prices, lower borrowing and declined profitability in the short run. However, in the long run, banks adjusted their loan prices and deposits to reflect basis point changes in their favor, hence the positive effect of average monetary policy rate on banking profitability. Additionally, monetary policy easing which represents decline in monetary policy basis point and rate enhances banking profitability.
Practical implications
These findings imply bank managers may take advantage of monetary policy easing to maximize profits in the banking sector of Ghana. Also, the monetary policy committee must be mindful of monetary policy tightening through basis point change since upward basis point increments reduce banking profitability.
Originality/value
This study provides empirical evidence for the first time on how different measures of monetary policy (developing indexes from monetary policy basis point and monetary policy rate) affect banking profitability in an emerging economy as Ghana.
Details
Keywords
Baah Aye Kusi, Joseph Ato Forson, Eunice Adu-Darko and Elikplimi Agbloyor
Financial crises (FC) remain a global threat to the financial stability of financial institutions and international bank regulatory capital requirement (IBRCR) by the Committee on…
Abstract
Purpose
Financial crises (FC) remain a global threat to the financial stability of financial institutions and international bank regulatory capital requirement (IBRCR) by the Committee on Banking Supervision provides mechanism for curbing the adverse effect of FC on financial stability. Hence, the purpose of this study is to provide, evidence on how IBRCR tones down the adverse FC effects on bank financial stability (BFS).
Design/methodology/approach
The study uses 102 economies between 2006 and 2016 in a two-step dynamic generalized method of moments model.
Findings
The results show that while FC and IBRCR negatively and positively impact BFS, respectively, it is observed that under the increasing presence of IBRCR, the negative effect of FC on BFS declines. Additionally, the results show that economies that maintain minimum IBRCR above 10.5% recommended by BASEL III are able to reinforce a significant reduction in the negative effect of FC on BFS.
Practical implications
These findings imply that in as much as financial crisis is injurious to BFS, regulators and policymakers can rely on IBRCR to avert the injurious effects of FC on BFS. Clearly, while IBRCR is necessary for reinforcing BFS through FC, bank managers who maintain IBRCR above the recommended 10.5% stands a better chance to taming the avert effect of FC on BFS. Additionally, economies that have not full adopted the BASEL minimum capital requirement may have to do so given its potential of dampening the adverse effect of FC on BFS.
Originality/value
The study presents an international perspective of how BASEL capital requirements can help tame global financial crisis using a global sample of 102 economies.
Details
Keywords
Solomon Nborkan Nakouwo, Daniel Ofori-Sasu and Baah Aye Kusi
This paper aims to examine the effect of natural resources on the national productivity of high and low globalized economies in Africa.
Abstract
Purpose
This paper aims to examine the effect of natural resources on the national productivity of high and low globalized economies in Africa.
Design/methodology/approach
This study uses two-step generalized method of moments dynamic panel data of 30 African economies between 2006 and 2016 to achieve the purpose of the study.
Findings
The results suggest that natural resources promote productivity within African economies regardless of the level of globalization. However, while natural resources have an overall enhancing effect on national productivity in both high and low globalized economies, the enhancing effect varies according to the forms of globalization. The findings of this study suggest that globalization can alter the nexus between natural resources and national productivity in Africa. The results imply that African Governments and their related policymakers can rely on globalization to promote the effect of natural resources on productivity of African economies.
Practical implications
This result is good and welcoming news, especially when natural resources in Africa have been described by prior studies as a curse to the continent. While globalization can be a tool for policymakers in Africa to deploy the positive effect of natural resources on national productivity, they might as well be careful as to which form of globalization they pursue, given that different forms and different levels or extent (high or low) of globalization yields different results on the nexus between natural resources and national productivity.
Originality/value
To the best of the authors’ knowledge, this study is the first of its kind to examine how natural resources affect national productivity in high and low globalized economies, especially in Africa.
Details
Keywords
Richard Angelous Kotey, Richard Akomatey and Baah Aye Kusi
This study examines the possible nonlinear effect of size on stakeholder and shareholder profitability in the Ghanaian insurance brokerage industry.
Abstract
Purpose
This study examines the possible nonlinear effect of size on stakeholder and shareholder profitability in the Ghanaian insurance brokerage industry.
Design/methodology/approach
This study employs a panel dataset of 64 Ghanaian insurance brokerage firms spanning 2011–2015. Static [ordinary least squares (OLS), fixed effect and random effect and dynamic (two-step generalized method of moments (GMM))] estimation techniques are employed to analyze the data.
Findings
The study finds the existence of both economies and diseconomies of scale and scope theories in the Ghanaian insurance brokerage industry confirming the existence of nonlinear nexus between size and performance. This finding is consistent for both stakeholder and shareholder profit performance. Thus, the results show that size improves profitability of insurance brokerage firms, but beyond a certain threshold, the relationship turns negative as size negatively affects profitability.
Practical implications
The research findings have implications for both policy and research; the study recommends that Ghanaian brokerage managers should understand that not all growth is good and exercise a duty of care when applying growth strategies by monitoring size effect on performance so as not to go beyond the inflection point. Further research can be done to examine this effect in other contexts, timeframes and jurisdictions.
Originality/value
This research is unique in that it employs a panel dataset consisting of 96% of insurance brokerage firms in Ghana whilst employing both static and nonstatic regression models to examine the effect of size. The research analysis adopted is robust, and the findings are significant. Also, the lack of empirical studies on the operations and dealings of auxiliary institutions such as the insurance brokerage firms adds value to this research.
Details
Keywords
This study aims to examine the nonlinear threshold effect of shadow economy on sustainable development in Africa while providing additional evidence on how this nonlinear…
Abstract
Purpose
This study aims to examine the nonlinear threshold effect of shadow economy on sustainable development in Africa while providing additional evidence on how this nonlinear threshold effect play out in economies with high and low developed financial/credit markets.
Design/methodology/approach
This study uses 37 African economies between 2009 and 2017 in a dynamic GMM panel model that controls for country, year and technological effects to ensure consistency and reliability of results and findings.
Findings
The results reveal that there is an inverted nonlinear U-shape nexus between the size of shadow economy and sustainable development in both short run and long run in Africa and across economies with high and low developed credit/financial market. Also, the threshold points beyond which the size of shadow economies dampens sustainable development is lower for economies with high financial/credit market development and higher in the long run.
Practical implications
These results have policy implications and recommendations and suggest that shadow economies can be beneficial to sustainable development particularly when the size of shadow economies are restrained from increasing beyond certain thresholds/levels. Moreso, to restrict the adverse effect of shadow economies on sustainable development, policymakers can rely on developing their financial/credit markets to tame the destructive nature of shadow economies on sustainable development. These results are robust to technological, year/time and country effects.
Originality/value
To the best of the author’s knowledge, this study examines for the first in the context of Africa, the nonlinear effect of shadow economies on sustainable development under low and high developed financial markets.
Details