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Article
Publication date: 3 July 2021

Christopher Boachie and Joseph Emmanuel Tetteh

Drawing on risk mitigation theory, this study aims to examine the link between corporate social responsibility (CSR) disclosure and the cost of debt financing (CDF). In…

Abstract

Purpose

Drawing on risk mitigation theory, this study aims to examine the link between corporate social responsibility (CSR) disclosure and the cost of debt financing (CDF). In particular, this paper seeks to determine whether firms with higher CSR disclosure scores have a lower CDF.

Design/methodology/approach

This paper uses a panel data analysis of non-financial Ghanaian firms listed on the Ghana Stock Exchange from 2006 to 2019. The CSR index constructed from firms’ annual reports and sustainability reports is used as a proxy for the extent of CSR information disclosures by Ghanaian companies.

Findings

The empirical results demonstrate that CDF is positively related to CSR disclosure scores. Besides, the results show that the levels of long-term debt increase with CSR disclosure in a highly risky industry. However, the finding does not meet the lenders’ expectations in terms of CSR attracting favourable debt financing sources.

Research limitations/implications

The research is based only on the quantity of the CSR information disclosed by Ghanaian companies and does not account for the quality of the CSR disclosures. The empirical model omits some control variables such as the age of the firm and external business conditions. The results should not be generalized, as the sample was based on three listed industries in Ghana for 2006–2019.

Originality/value

This study extends the scope of previous studies by examining the importance of CSR disclosures in financing decisions. More precisely, it focuses on the relatively little explored relationship between the extent of CSR disclosures and access to debt financing. Moreover, this study focuses on the rather interesting empirical setting of Ghana, which is characterized by its low level of CSR awareness. Achieving a better understanding of the effects of CSR information is useful for corporate managers desiring to meet lenders’ expectations and attract debt financing sources.

Details

International Journal of Ethics and Systems, vol. 37 no. 3
Type: Research Article
ISSN: 2514-9369

Keywords

Article
Publication date: 7 June 2021

Christopher Boachie

The purpose of this paper is to investigate the moderating effect of ownership on the links between corporate governance and financial performance in the context of Ghanaian banks.

Abstract

Purpose

The purpose of this paper is to investigate the moderating effect of ownership on the links between corporate governance and financial performance in the context of Ghanaian banks.

Design/methodology/approach

The current study used a sample of 23 banks and the multiple regression method to analyze a panel dataset of 414 from banks over an 18-year period.

Findings

The findings revealed that audit independence, chief executive officer (CEO) duality, non-executive directors and banks size have a positive impact on performance. The findings also revealed that foreign ownership has an interacting effect between corporate governance and profitability.

Practical implications

The practical implications of the current study demonstrated that good corporate governance creates value and must be invigorated for the interest of all stakeholders. Foreign ownership has an interacting effect between corporate governance and performance. Policymakers should formulate policies for attracting foreign investors.

Originality/value

Interestingly, this study is the first of its kind that exclusively chose ownership structure to interact between corporate governance and bank performance in Ghanaian perspective. Such new insights on this relationship provide useful information to the government, academics, policymakers and other stakeholders. The growing economies of African countries, and the inadequate governance–performance literature in African context, have created a demand to appreciate the governance parameters in these countries and its influence on firm's performance.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

Keywords

Article
Publication date: 21 February 2022

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

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

Keywords

Article
Publication date: 3 September 2021

Joseph Emmanuel Tetteh and Christopher Boachie

This paper attempts to investigate the influence of psychological biases on saving decision-making of bank customers in Ghana.

Abstract

Purpose

This paper attempts to investigate the influence of psychological biases on saving decision-making of bank customers in Ghana.

Design/methodology/approach

It employs weighted least squares regression to test the effect of psychological biases on savings decisions of bank customers.

Findings

The findings show that all the nine psychological biases, namely mental accounting, availability, loss aversion, representativeness, anchoring, overconfidence, status quo, framing effect and disposition effect employed for the study have a significant influence on saving decision of bank customers. The results depict that psychological biases are entrenched in the saving pattern of bank customers in Ghana.

Practical implications

For policy purposes, the study recommends that bank customers need to enhance their knowledge of psychological biases in order to improve their gains from savings, and not to fall prey to these prejudices. The satisfied customer is a dependable source of bank viability and survival.

Originality/value

To the best of the knowledge of the author, this study provides the first empirical evidence of the influence of psychological biases on saving decisions of bank customers in Ghana. The findings of this study will enhance knowledge on the influence of psychological biases on individual decision-making and will accentuate the fact that the individual is not an entirely rational being.

Details

Review of Behavioral Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1940-5979

Keywords

Abstract

Details

Developing Africa’s Financial Services
Type: Book
ISBN: 978-1-78714-186-5

Content available
Book part
Publication date: 8 May 2017

Abstract

Details

Developing Africa’s Financial Services
Type: Book
ISBN: 978-1-78714-186-5

Abstract

Details

Transforming Africa
Type: Book
ISBN: 978-1-80262-054-2

Content available
Book part
Publication date: 26 January 2022

Abstract

Details

Transforming Africa
Type: Book
ISBN: 978-1-80262-054-2

Content available
Book part
Publication date: 8 May 2017

Abstract

Details

Developing Africa’s Financial Services
Type: Book
ISBN: 978-1-78714-186-5

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