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Article
Publication date: 12 October 2021

Rexford Abaidoo, Elvis Kwame Agyapong and Kwame Fosu Boateng

This paper aims to examine the effect of volatility in prices of internationally traded commodities (the backbone of most economies) on the stability of the banking…

Abstract

Purpose

This paper aims to examine the effect of volatility in prices of internationally traded commodities (the backbone of most economies) on the stability of the banking industry from three main perspectives; bank liquidity reserves, overall bank risk and bank capital adequacy.

Design/methodology/approach

Data were compiled from various sources for 30 emerging economies from 2002 to 2018 and were analyzed using the two-step system generalized method of moments estimation technique.

Findings

The study finds that all things being equal, the magnitude and direction of impact of commodity price volatility on bank stability among economies in Sub-Saharan African (SSA) depend on the type and nature of the commodity in question; and the bank stability proxy used. For instance, an increase in crude oil prices is found to foster stability in the banking industry (proxied by bank liquid reserves) but insignificant when stability in the banking industry is proxied using other banking sector parameters. Additionally, government effectiveness and corruption control have varying moderating influences on how volatility associated with prices of internationally traded commodities influence various proxies for banking industry stability.

Originality/value

This study highlights the effect of fluctuations in prices of key internationally traded commodities (adjusted for foreign exchange impact) that are important sources of revenue among economies in SSA on banking sector stability from liquidity, overall risk and capital adequacy perspectives. The influential role of governance in the relationship between volatility in the price of commodities and bank stability is also revealed by the study.

Details

Journal of Economic and Administrative Sciences, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1026-4116

Keywords

Article
Publication date: 2 August 2022

Rexford Abaidoo and Elvis Kwame Agyapong

This paper evaluates how institutions of governance and macroeconomic uncertainty influence efficiency of financial institutions in the subregion of Sub-Saharan Africa…

Abstract

Purpose

This paper evaluates how institutions of governance and macroeconomic uncertainty influence efficiency of financial institutions in the subregion of Sub-Saharan Africa (SSA). Data for the empirical inquiry were compiled from relevant sources for 33 countries in the subregion from 2002 to 2019. Empirical estimates verifying hypothesized relationships were carried out using the continuous updating estimator (CUE) by Hansen et al. (1996).

Design/methodology/approach

The purpose of this paper is to evaluates how institutions of governance and macroeconomic uncertainty influence efficiency of financial institutions in the subregion of Sub-Saharan Africa (SSA). Data for the empirical inquiry were compiled from relevant sources for 33 countries in the subregion from 2002 to 2019. Empirical estimates verifying hypothesized relationships were carried out using the continuous updating estimator (CUE) by Hansen et al. (1996).

Findings

The results suggest that institutional quality has significant positive effect on financial institution efficiency, supporting the view that improved and supportive structures of governance tend to promote operational efficiency among financial institutions among economies in SSA. In addition, improvement in individual governance indicators such as corruption control, government effectiveness, regulatory quality and rule of law was also found to support or enhance efficiency of financial institutions among economies in the subregion. Macroeconomic uncertainty on the other hand is found to impede efficiency of financial institutions; the same condition (macroeconomic uncertainty) is further found to negate any positive impact corruption control, government effectiveness, regulatory quality and rule of law have on operational efficiency among financial institutions in the subregion.

Originality/value

Unlike most of related studies, this study adopts a different approach on the dynamics of financial institutions. Approach pursued in this empirical inquiry examines how the regulatory environment within which financial institutions operate, the form of governance and the quality of government institutions influence efficiency of financial institutions among emerging economies in Sub-Sahara. Empirical analysis conducted examines effects of variables that are unique to this study; these variables are either constructed or econometrically derived specifically for various interactions verified in the study. For instance, institutional quality variable is an index constructed specifically for this study using principal component analysis approach.

Details

Journal of Financial Regulation and Compliance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1358-1988

Keywords

Open Access
Article
Publication date: 23 June 2022

Rexford Abaidoo and Elvis Kwame Agyapong

This study examines how institutional quality influences variability in financial development among economies in Sub-Saharan Africa (SSA).

Abstract

Purpose

This study examines how institutional quality influences variability in financial development among economies in Sub-Saharan Africa (SSA).

Design/methodology/approach

Empirical estimations verifying various relationships are performed using the limited information maximum likelihood (LIML) estimation technique.

Findings

The results suggest that institutional quality enhances the pace of financial development among economies in the sub-region all things being equal. In a further micro-level analysis where components of institutional quality index are examined separately, the study’s results suggest that effective governance, regulatory quality, rule of law and accountability tend to have a significant positive impact on financial sector development.

Research limitations/implications

Findings of the study suggest that policies geared towards improving governance and regulatory institutions can augment development of the financial sector among economies in SSA; governments and policymakers are therefore encouraged to resource noted institutions to play effective roles for the development of the financial sector.

Originality/value

Compared to related studies, this study reorients existing paradigm, which emphasizes the role of governance and institutional variables in the economic growth discourse. The authors’ empirical inquiry rather focuses on how governance and institutional structures influence regional financial development dynamics. Specifically, this study differs from most macro-level studies found in literature because it examines the impact of hitherto unexamined governance and institutional variables on financial development among economies in SSA.

Details

Journal of Economics and Development, vol. 24 no. 3
Type: Research Article
ISSN: 1859-0020

Keywords

Article
Publication date: 1 February 2022

Rexford Abaidoo and Elvis Kwame Agyapong

This paper examines the role price fluctuations associated with internationally traded commodities play in inflationary conditions and inflation uncertainty among…

Abstract

Purpose

This paper examines the role price fluctuations associated with internationally traded commodities play in inflationary conditions and inflation uncertainty among economies in Sub-Saharan Africa.

Design/methodology/approach

Using a panel 32 countries from the sub-region from 1996 to 2019, this study employed Two-Step System Generalized Method of Moments (GMM) estimation technique in its analysis.

Findings

Empirical evidence demonstrates that fluctuations in forex-adjusted price of crude oil, gold and cocoa have significant positive impact on inflation while forex-adjusted changes in price of cotton tend to have significant negative influence on consumer price inflation among economies in the sub-region. Additionally, the study found that gold, cocoa and cotton price changes on the international market have significant positive impact on inflation uncertainty in the sub-region (rise in price leads to increase rate of inflation uncertainty). Furthermore, improved regulatory quality and growth in output growth (GDP per capita growth) were found to help in stabilizing inflation uncertainty (reduce inflation uncertainty) among economies in the sub-region during periods of persistent growth in general price levels.

Originality/value

The study present a different approach based on individual economy forex-adjusted global prices of internationally traded commodities instead of general prices often used in the literature and assessed the effects such adjusted commodity prices have on inflation and inflation uncertainty. Additionally, the moderating role of regulatory quality and output growth between surmised nexuses are also examined.

Details

Journal of Economic and Administrative Sciences, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1026-4116

Keywords

Article
Publication date: 30 November 2021

Rexford Abaidoo and Elvis Kwame Agyapong

This paper aims to evaluate how strands of differing investments influence stability in the banking industry using data from 37 countries in Sub-Sahara Africa from 2000 to 2018.

Abstract

Purpose

This paper aims to evaluate how strands of differing investments influence stability in the banking industry using data from 37 countries in Sub-Sahara Africa from 2000 to 2018.

Design/methodology/approach

Empirical analyses in the study were carried out using a two-step system Generalized Method of Moments estimation methodology.

Findings

Empirical results suggest that generally, growth in investments by governments, foreign investments and private domestic investments have a significant positive impact in stabilizing the banking industry. The empirical estimates further suggest that macroeconomic conditions such as macroeconomic uncertainty adversely affects the liquid reserve position of banks even during periods of appreciable growth in investments.

Originality/value

The authors present a different approach to the banking industry discourse. Instead of surmise the relationship with the direction of impact often emanating from the banking industry to other variables of interest or conditions, this study rather examines how investment dynamics among economies influence the stability of the banking industry overtime. In contrast to related studies, this study examines how strands of investment variables influence the stability of the banking industry. Specifically, this study is modeled to examine the extent to which variability in investment growth (using different investment variables) affect stability in the banking industry.

Details

Journal of Financial Regulation and Compliance, vol. 30 no. 2
Type: Research Article
ISSN: 1358-1988

Keywords

Open Access
Article
Publication date: 3 August 2021

Rexford Abaidoo and Elvis Kwame Agyapong

This study examines how specific micro-level macroeconomic indicators influence corporate performance volatility among US corporate bodies in the short run.

Abstract

Purpose

This study examines how specific micro-level macroeconomic indicators influence corporate performance volatility among US corporate bodies in the short run.

Design/methodology/approach

The study employs error correction autoregressive distributed lagged (ARDL) model (ECM) to examine how micro-level variables influence volatility associated with corporate performance in the short run.

Findings

This paper finds that disaggregated or micro-level variables examined, tend to exhibit features that are not readily apparent from the aggregate variable from which such variables are derived. For instance, reported empirical estimate suggests that, growth in expenditures on services and nondurable goods tend to lower volatility associated with corporate performance, whereas government expenditures and expenditures on durable goods rather worsens volatility associated with corporate performance, all things being equal. Additionally, presented empirical estimates further provide evidence suggesting that macroeconomic uncertainty and inflation uncertainty significantly moderate or influence the extent to which disaggregated variables impact corporate performance volatility.

Originality/value

Compared to related studies in the reviewed literature, this study rather examines volatility associated with corporate performance instead of the corporate performance indicator itself. Additionally, this paper also examines how disaggregated variable instead of aggregate variables impact such volatility. Finally, the moderating role of key macroeconomic conditions in such a relationship is also examined.

Article
Publication date: 14 December 2021

Kenneth Ofori-Boateng, Williams Ohemeng, Elvis Kwame Agyapong and Ben Justice Bribinti

In Ghana, even though scholars and experts in the field of economics and finance have expressed their opinions and perceptions on the effect of the pandemic on the Ghana…

Abstract

Purpose

In Ghana, even though scholars and experts in the field of economics and finance have expressed their opinions and perceptions on the effect of the pandemic on the Ghana Stock Exchange, there has been no study conducted to that effect. This study, therefore, aimed at examining the impact of COVID-19 on the stock returns on the Ghana stock exchange. This would help policy makers and investors in making efficient decisions.

Design/methodology/approach

The outbreak of the novel COVID-19 has been a thorn in the flesh of the world in its entirety, affecting many aspects of life including the stock market. This study, therefore, examined the impact of the outbreak on the stock returns of the Ghana Stock Exchange. The study utilized data from the All Share Prices of the Ghana stock exchange, commonly known as the Ghana stoke exchange composite index (GSECI) for analysis. The data covered the period before the outbreak of COVID-19 and during the outbreak. It was revealed that the Ghana stock exchange experienced better returns on the market before the outbreak of the virus. The outbreak of COVID-19 has led to wide variations in the market increasing the risk of investments. The exponential General Autoregressive Conditional Heteroscedasticity (EGARCH) (1, 1) model also reveals that the outbreak of COVID-19 has a significant negative effect on the returns in the market. The market in these periods of COVID-19 is highly volatile. It is recommended that investors should carefully consider risk mitigation strategies to enable them diversify their investments effectively and efficiently against the high risk associated with the market in this COVID-19 era.

Findings

It was revealed that the Ghana stock exchange experienced better returns on the market before the outbreak of the virus. The outbreak of COVID-19 has led to wide variations in the market increasing the risk of investments. The EGARCH (1, 1) model also revealed that the outbreak of COVID-19 had a significant negative effect on stock returns in the market. The market during these periods of COVID-19 was viewed as highly volatile.

Research limitations/implications

The outbreak of COVID-19 is hence deduced to have a negative impact on the Ghana stock exchange. However, the knowledge of how the market has been affected by the disease, it is important that financial risk mitigation studies be undertaken. This goes beyond what this study has done. The study can further be expanded to include other important economic variables such as GDP, inflation, exchange rates and the likes in to the model.

Practical implications

Investors should carefully consider risk mitigation strategies to enable them diversify their investments effectively and efficiently against the high risk associated with the market in this COVID-19 era.

Social implications

It is also important that investors consider diversification of their investments in order to reduce the risk in their investments. It will be more appropriate for most investors to invest with companies such as banks and the telecommunications companies listed on the on the market. This is because most of the telecommunication companies in these times have taken advantage and are making good profit on their businesses. Likewise, some of the financial institutions are considered essential institution in these times. Investing in industries such as manufacturing and the oil and gas sector may be more risky.

Originality/value

The decline in economic and financial market indicators could be credited to the failure of most business entities, organizations and firms which are struggling to sustain their operations in these times of COVID-19. These also include firms listed on the Ghana stock exchange with whom investors transact their daily businesses. However, about 70% of the Ghanaian economy heavily depends on these business and firms found in the private and informal sector. According to the Ghana Statistics Service COVID-19 Business Tracker Survey, about 131,000 businesses expressed their uncertainties with the business environment and also faced the challenge of financial accessibility. The study is appropriate to unearth the true effect and offer policy interventions.

Details

African Journal of Economic and Management Studies, vol. 13 no. 1
Type: Research Article
ISSN: 2040-0705

Keywords

Article
Publication date: 18 October 2021

Oliver Tannor, Elvis Attakora-Amaniampong and Williams Miller Appau

This study aims to assess the satisfaction of users with outsourced facility management (FM) services in multi-tenant shopping malls (SMs) in Accra, Ghana.

Abstract

Purpose

This study aims to assess the satisfaction of users with outsourced facility management (FM) services in multi-tenant shopping malls (SMs) in Accra, Ghana.

Design/methodology/approach

This study measured user satisfaction (US) with 15 FM services using the perception of internal users about the attitude and courtesy of the personnel who provide the services, the reliability of the services, their responsiveness and their competence. This study used survey data from 117 users who have actively used these services for at least 12 months using structured questionnaires. The data was descriptively analysed to assess the perceived satisfaction of the users in five SMs.

Findings

The results showed that users were satisfied with the delivery of all 15 services (each had a mean above 3.0 which is the benchmark satisfaction point). The findings also showed high levels of service quality with the four dimensions of satisfaction investigated.

Originality/value

This study demonstrates US with outsourced FM services for multi-tenant SMs in Ghana. Practically, property owners, potential investors and other stakeholders can rely on the findings for effective FM strategy decision-making. Facility managers can rely on these findings to review their service delivery for the better.

Details

Facilities , vol. 40 no. 3/4
Type: Research Article
ISSN: 0263-2772

Keywords

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