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Article
Publication date: 10 September 2018

Abdul Ganiyu Iddrisu and Godfred A. Bokpin

The purpose of this paper is to understand both the incidence and the impact of the African political business cycle (PBC) in the light of a literature which has argued…

Abstract

Purpose

The purpose of this paper is to understand both the incidence and the impact of the African political business cycle (PBC) in the light of a literature which has argued that, with major extensions of democracy since the 1990s, the cycle has both become more intense and has made African political systems more fragile. It answers two very important macroeconomic questions crucial to the validity of the opportunistic model. It, first, answers the question of whether election cycles contribute to money growth in the light of government expenditure, and second, whether election cycles have an effect on economic growth in the light of money supply.

Design/methodology/approach

The study employs data from 39 African countries from 1990 to 2014 to address these important empirical questions using panel regression techniques.

Findings

The paper found PBC to be present in Africa. It also found that such cycles do not translate to economic performance in African countries. The paper therefore indicates the need for African policy makers to take measures to eliminate or lessen the scale of PBCs.

Social implications

There are many ways in which today’s political choices affect future well-being. Recently, economists have concluded that we pass on the inflationary (or deflationary) consequences of current policies to the future generation.

Originality/value

This paper is unique in its approach to investigate the objectives.

Details

Journal of Economic Studies, vol. 45 no. 4
Type: Research Article
ISSN: 0144-3585

Keywords

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Article
Publication date: 11 September 2017

Godfred A. Bokpin, Lord Mensah and Michael E. Asamoah

This paper aims to find out how the legal system interacts with other institutions in attracting Foreign Direct Investment (FDI) into Africa.

Abstract

Purpose

This paper aims to find out how the legal system interacts with other institutions in attracting Foreign Direct Investment (FDI) into Africa.

Design/methodology/approach

The authors use annual panel data of 49 African countries over the period 1980 to 2011, and use the system generalized method of moments (GMM) estimation technique and pooled panel data regression.

Findings

The authors find that the source of a country’s legal system deters FDI inflow as institutions alone cannot bring in the needed quantum of FDI. In terms of trading blocs, it was found that there is negative significant relationship between institutional quality and FDI for South African Development Community (SADC) as well as Economic Community of West Africa States (ECOWAS) countries.

Practical implications

For policy implications, the results suggest that reliance on institutions alone cannot project the continent to attract the needed FDI.

Originality/value

Empiricists have devoted considerable effort to estimating the relationship between institutions and FDI on the African continent, but this paper seeks to ascertain the effect of legal systems and institutional quality within African specific trade and regional blocks.

Details

International Journal of Law and Management, vol. 59 no. 5
Type: Research Article
ISSN: 1754-243X

Keywords

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Article
Publication date: 31 May 2011

Godfred A. Bokpin

This paper aims to document the interaction between ownership structure, corporate governance and dividend performance on the Ghana Stock Exchange (GSE).

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2687

Abstract

Purpose

This paper aims to document the interaction between ownership structure, corporate governance and dividend performance on the Ghana Stock Exchange (GSE).

Design/methodology/approach

Panel data covering a period from 2002 to 2007 for 23 firms were analyzed within the framework of fixed effects techniques.

Findings

The paper reports that foreign share ownership significantly, positively, influences dividend payment among firms on the GSE. It found board size to have a statistically positive effect on dividend payment among the corporate governance variables. It did not, however, find a significant relationship between inside ownership, board independence, board intensity, CEO duality and dividend performance. The results also indicate that highly leveraged firms will significantly reduce dividend payments. Finally, age and income volatility were found to be significant determinants of dividend performance on the GSE.

Originality/value

The paper considers a much broader approach to investigating the impact of ownership structure and corporate governance on dividend performance on the GSE, a marked departure from other studies conducted on the GSE.

Details

Journal of Applied Accounting Research, vol. 12 no. 1
Type: Research Article
ISSN: 0967-5426

Keywords

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Article
Publication date: 9 September 2013

Godfred A. Bokpin

– The purpose of this paper is to document the determinants and value relevance of corporate disclosure and transparency on the Ghana Stock Exchange (GSE).

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1412

Abstract

Purpose

The purpose of this paper is to document the determinants and value relevance of corporate disclosure and transparency on the Ghana Stock Exchange (GSE).

Design/methodology/approach

The paper employs the Fama and French model by relating firm value to firm level characteristics, with a sample of 27 firms on the GSE over a six-year period (2003-2008)

Findings

The author found positive though statistically insignificant relationship between corporate disclosure and firm value represented by market to book value ratio and negative for stock price. Consistent with the political cost, signalling, agency and economic theories of corporate disclosure, the author found firm size, financial leverage, audit quality, age and profitability to be significant firm level characteristics determining corporate disclosure in Ghana. Though the adoption of IFRS is significant, it has marginally improved disclosure, though perhaps it is observed more in breach than in compliance and practical steps must be taken to improve disclosure practice on the GSE.

Originality/value

The main value of the paper lies in providing further evidence of the value relevance and determinants of corporate disclosure using emerging data.

Details

Journal of Applied Accounting Research, vol. 14 no. 2
Type: Research Article
ISSN: 0967-5426

Keywords

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Article
Publication date: 2 October 2009

Godfred A. Bokpin and Anastacia C. Arko

The purpose of this paper is to examine the effect of ownership structure and corporate governance on capital structure decisions of firms on the Ghana Stock Exchange (GSE).

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5610

Abstract

Purpose

The purpose of this paper is to examine the effect of ownership structure and corporate governance on capital structure decisions of firms on the Ghana Stock Exchange (GSE).

Design/methodology/approach

To analyze the impact of ownership structure and corporate governance on firms' financing decisions, unbalanced panel data covering a period from 2002 to 2007 is employed using the seemingly unrelated regression approach to mitigate the effects of multicollinearity among the regressors.

Findings

The regression results reveal that managerial shareholding significantly positively influences the choice of long‐term debt over equity. Among the corporate governance variables, board size is found to be positively and statistically significantly related to capital structure choices. Firm level factors such as volatility in earnings, asset tangibility, dividend payout ratio and profitability are significant determinants of corporate capital structure decisions on the GSE. The findings are largely consistent with theories of capital structure decisions observed in the literature.

Originality/value

The main value of this paper is to provide a comprehensive understanding of the impact of forms of ownership and other governance practices on capital structure decisions of firms from an emerging market perspective.

Details

Studies in Economics and Finance, vol. 26 no. 4
Type: Research Article
ISSN: 1086-7376

Keywords

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Article
Publication date: 14 September 2015

Godfred A. Bokpin, Zangina Isshaq and Eunice Stella Nyarko

The study aims to seeks to ascertain the impact of corporate disclosure on foreign equity ownership. Corporate disclosures are important to for stock markets because it is…

Abstract

Purpose

The study aims to seeks to ascertain the impact of corporate disclosure on foreign equity ownership. Corporate disclosures are important to for stock markets because it is an activity that mitigates information differences between company insiders and outsiders.

Design/methodology/approach

Corporate disclosures assume an even greater important when company outsiders are not domiciled in the same country as the company and the company insiders. In this study, the relation between foreign share ownership and corporate disclosures using data on Ghana, Kenya and Nigeria is examined.

Findings

The consistent results in this study are that foreign share ownership is positively related to firm size. A negative relation, however, between foreign share ownership and corporate disclosure is found, but this turns out to be related to disclosures about ownership, while disclosures on financial reporting and board management have a positive and insignificant statistical relation taking into account unobserved country, time and firm effects. Further analysis shows that corporate disclosures are very persistent and negatively related to lag foreign share ownership. No consistent statistical relation is found between disclosure and market-to-book values as a proxy for investment opportunities. It is recommended to African-listed firms to pursue adoption of high-quality financial reporting standards and to increase their reporting on board management. The study also recommends that the African Government weighs the benefits of detailed ownership disclosures.

Originality/value

The study utilises frontier market data to complement existing literature on how corporate disclosure and transparency influences foreign investors decision to invest in Africa.

Details

International Journal of Law and Management, vol. 57 no. 5
Type: Research Article
ISSN: 1754-243X

Keywords

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Article
Publication date: 25 May 2010

Godfred A. Bokpin, Anthony Q.Q. Aboagye and Kofi A. Osei

The purpose of this paper is to examine the extent to which corporate managers alter their capital structure in response to risk exposures on the Ghana Stock Exchange (GSE).

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1634

Abstract

Purpose

The purpose of this paper is to examine the extent to which corporate managers alter their capital structure in response to risk exposures on the Ghana Stock Exchange (GSE).

Design/methodology/approach

A panel data covering the period from 2002 to 2007 was employed under the framework of the seemingly unrelated regression approach.

Findings

The paper finds that the direction and magnitude of the impact of risk exposures depends on capital structure measurement variables; namely, financial leverage, debt ratio, or short‐term debt to equity. The paper also finds that corporate managers adjust their capital structure differently in response to different kinds of risk exposures namely business risk or financial risk. Specifically, operating risk, bankruptcy risk, and bankruptcy cost in addition to other firm level characteristics such as asset structure, firm size and profitability are found to be significant driving factors in shaping corporate financial policy on the GSE.

Originality/value

The main value of this paper is to analyze the relationship between risk exposures and corporate financial policy from a developing country perspective.

Details

The Journal of Risk Finance, vol. 11 no. 3
Type: Research Article
ISSN: 1526-5943

Keywords

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Article
Publication date: 3 August 2010

Joshua Abor and Godfred A. Bokpin

The purpose of this paper is to investigate the effects of investment opportunities and corporate finance on dividend payout policy.

Downloads
11845

Abstract

Purpose

The purpose of this paper is to investigate the effects of investment opportunities and corporate finance on dividend payout policy.

Design/methodology/approach

This issue is tested with a sample of 34 emerging market countries covering a 17‐year period, 1990‐2006. Fixed effects panel model is employed in our estimation.

Findings

A significantly negative relationship between investment opportunity set and dividend payout policy is found. There are, however, insignificant effects of the various measures of corporate finance namely, financial leverage, external financing, and debt maturity on dividend payout policy. Profitability and stock market capitalization are also identified as important in influencing dividend payout policy. Profitable firms are more likely to support high dividend payments to shareholders. However, firms in relatively well‐developed markets tend to exhibit low dividend payout policy.

Originality/value

The main value of the paper is in respect of the fact that it uses a large dataset from emerging market countries. The results generally support existing literature on investment opportunity set and dividend payout policy.

Details

Studies in Economics and Finance, vol. 27 no. 3
Type: Research Article
ISSN: 1086-7376

Keywords

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Article
Publication date: 24 July 2009

Godfred A. Bokpin and Zangina Isshaq

The purpose of this paper is to examine the interaction between corporate disclosure and foreign share ownership on the Ghana Stock Exchange (GSE).

Downloads
2873

Abstract

Purpose

The purpose of this paper is to examine the interaction between corporate disclosure and foreign share ownership on the Ghana Stock Exchange (GSE).

Design/methodology/approach

The paper follows the trinary procedure of Aksu and Kosedag and uses the Standard & Poor's transparency and disclosure items in the construction of the disclosure index. Therefore, the paper adopts a panel data analysis covering a period from 2002 to 2007 using the seemingly unrelated regression approach.

Findings

The results indicate a statistically significant interaction between corporate disclosures and foreign share ownership among the sample firms. The market value of equity and market‐to‐book value ratio is documented; free cash flow and financial leverage have statistically significant relationships with foreign share ownership.

Originality/value

This is the first of its kind in the country that considers the impact of corporate governance and disclosure on foreign share ownership despite the numerous studies carried out on the GSE.

Details

Managerial Auditing Journal, vol. 24 no. 7
Type: Research Article
ISSN: 0268-6902

Keywords

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Article
Publication date: 6 November 2009

Zangina Isshaq, Godfred A. Bokpin and Joseph Mensah Onumah

The purpose of this paper is to examine the interaction between corporate governance, ownership structure, cash holdings, and firm value on the Ghana Stock Exchange.

Downloads
5002

Abstract

Purpose

The purpose of this paper is to examine the interaction between corporate governance, ownership structure, cash holdings, and firm value on the Ghana Stock Exchange.

Design/methodology/approach

A multiple regression approach using the seemingly unrelated regression to mitigate the problems of multicollinearity between the cash‐holding variable and other control variables is adopted.

Findings

Board size is found to be positively and statistically significantly related to share price among the corporate governance variables. However, a significant relationship between inside ownership and share price is not found. The results also indicate that additional units of cash holdings do not have a statistically significant influence on share price. Finally, leverage and income volatility are found to be significant determinants of share price.

Originality/value

This is the first of its kind in the country that considers the impact of corporate governance, ownership structure, and firm value on the Ghana Stock Exchange (GSE).

Details

The Journal of Risk Finance, vol. 10 no. 5
Type: Research Article
ISSN: 1526-5943

Keywords

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