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1 – 10 of 33Eric B. Yiadom, Lord Mensah and Godfred A. Bokpin
This study aims to decompose financial development into its three key components (depth, access and efficiency) to investigate whether they can help to overturn the negative…
Abstract
Purpose
This study aims to decompose financial development into its three key components (depth, access and efficiency) to investigate whether they can help to overturn the negative impact of foreign direct investment (FDI) on the environment.
Design/methodology/approach
The study uses a dynamic panel of 43 economies from 1982 to 2018 and decomposed financial development into its three key components: depth, access and efficiency.
Findings
The results from the various estimations indicate that financial deepening and efficiency reduce environmental risk and can overturn the negative impact of FDI on the environment. In addition, the study finds that low levels of financial access worsen environmental risk but doubling financial access is likely to reduce it which makes the relationship between access and environmental risk non-monotonic. After splitting the data set into high and low financially developed economies, the study reports that FDI is more environmentally depressive among low financially developed economies.
Practical implications
The practical implications are that improvement in financial efficiency guarantees high returns on savings and investment and can reduce environmental risk. So, central governments should invest in financial technologies and formulate financial regulations through monetary and fiscal policies to enhance financial efficiency and depth.
Social implications
If inward FDI to Africa continues the business-as-usual trend, the environmental risk in the region may continue to rise, environmental conditionalities for FDI must be strengthened.
Originality/value
The study uses a comprehensive measure of financial sector development and decomposes financial development indicators to assess their efficacy in mitigating the relationship between FDI and environmental quality.
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Eric B. Yiadom, Lord Mensah, Godfred A. Bokpin and Raymond K. Dziwornu
This research investigates the threshold effects of the interplay between finance, development and carbon emissions across 97 countries, including 50 low-income and 47 high-income…
Abstract
Purpose
This research investigates the threshold effects of the interplay between finance, development and carbon emissions across 97 countries, including 50 low-income and 47 high-income countries, during the period from 1991 to 2019.
Design/methodology/approach
Employing various econometric modeling techniques such as dynamic linear regression, dynamic panel threshold regression and in/out of sample splitting, this study analyzes the data obtained from the World Bank's world development indicators.
Findings
The results indicate that low-income countries require a minimum financial development threshold of 0.354 to effectively reduce carbon emissions. Conversely, high-income countries require a higher financial development threshold of 0.662 to mitigate finance-induced carbon emissions. These findings validate the presence of a finance-led Environmental Kuznet Curve (EKC). Furthermore, the study highlights those high-income countries exhibit greater environmental concern compared to their low-income counterparts. Additionally, a minimum GDP per capita of US$ 10,067 is necessary to facilitate economic development and subsequently reduce carbon emissions. Once GDP per capita surpasses this threshold, a rise in economic development by a certain percentage could lead to a 0.96% reduction in carbon emissions across all income levels.
Originality/value
This study provides a novel contribution by estimating practical financial and economic thresholds essential for reducing carbon emissions within countries at varying levels of development.
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Theodora Aba Kwegyeba Brown, Godfred A. Bokpin and Emmanuel Sarpong-Kumankoma
This study aims to determine how taxes can be used to bridge income inequality gap in sub-Saharan Africa (SSA).
Abstract
Purpose
This study aims to determine how taxes can be used to bridge income inequality gap in sub-Saharan Africa (SSA).
Design/methodology/approach
A panel data set of 36 SSA countries was analysed using generalised method of moments.
Findings
The results suggest that an increase in direct taxes relative to indirect taxes has a positive significant impact on income inequality. This is mostly due to the progressive nature of direct taxes as compared to indirect taxes.
Originality/value
This research contributes to the scant literature on how specific tax components affect income inequality, especially in developing countries.
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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 that, with…
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.
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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.
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This paper aims to document the interaction between ownership structure, corporate governance and dividend performance on the Ghana Stock Exchange (GSE).
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.
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– The purpose of this paper is to document the determinants and value relevance of corporate disclosure and transparency on the Ghana Stock Exchange (GSE).
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.
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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).
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.
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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 an…
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.
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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).
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.
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