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Article
Publication date: 15 May 2017

Nicholas Asare, Abdul Latif Alhassan, Michael Effah Asamoah and Matthew Ntow-Gyamfi

The purpose of this paper is to examine the relationship between intellectual capital (IC) and profitability of insurance companies in Ghana.

1994

Abstract

Purpose

The purpose of this paper is to examine the relationship between intellectual capital (IC) and profitability of insurance companies in Ghana.

Design/methodology/approach

Data on 36 life and non-life insurance companies from 2007 to 2011 are employed to estimate the value added intellectual coefficient of Pulic (2004, 2008). Using return on assets and underwriting profit as indicators of profitability, the ordinary least squares panel corrected standard errors of Beck and Katz (2005) is used in estimating the relationship in the presence of serial correlation and heteroskedasticity. Leverage, underwriting risk and insurers’ size are used as control variables.

Findings

Non-life insurers have high IC performance comparative to life insurers. This study finds a significant positive relationship between IC and profitability of insurers in Ghana while human capital efficiency is the main driver of insurers’ IC performance.

Practical implications

The study discusses relevance of IC for management of insurance companies in Ghana and other emerging insurance markets in Africa.

Originality/value

This appears to be the first study to examine the impact of IC on profitability of a developing insurance market in Africa.

Details

Journal of Economic and Administrative Sciences, vol. 33 no. 1
Type: Research Article
ISSN: 1026-4116

Keywords

Article
Publication date: 5 December 2016

Esther Laryea, Matthew Ntow-Gyamfi and Angela Azumah Alu

The purpose of this paper is to investigate the bank-specific and macroeconomic determinants of nonperforming loans (NPLs) as well as the impact of NPLs on bank profitability.

2221

Abstract

Purpose

The purpose of this paper is to investigate the bank-specific and macroeconomic determinants of nonperforming loans (NPLs) as well as the impact of NPLs on bank profitability.

Design/methodology/approach

Using a sample of 22 Ghanaian banks over the period 2005-2010, the study employs a fixed effect panel model in estimating three different empirical models.

Findings

The study finds new evidence of bank-specific factors as well as macroeconomic factors determining NPLs. Inflation and industry concentration are not significant in determining NPLs, although both are positively related to NPLs.

Practical implications

The findings of this study have important implications for policy makers and bank managers.

Originality/value

The paper offers significant value in shaping and improving the banking sector of emerging markets.

Details

African Journal of Economic and Management Studies, vol. 7 no. 4
Type: Research Article
ISSN: 2040-0705

Keywords

Article
Publication date: 5 May 2015

Matthew Ntow-Gyamfi, Godfred Alufar Bokpin and Albert Gemegah

– The purpose of the study is to examine the influence of corporate governance on the flow of firm-specific information in an emerging market.

1563

Abstract

Purpose

The purpose of the study is to examine the influence of corporate governance on the flow of firm-specific information in an emerging market.

Design/methodology/approach

Synchronicity is estimated under assumptions of contemporaneous and non-contemporaneous relationship between individual stock returns and the market return. Possible thin-trading effect is also corrected using the Dimson’s Beta approach to estimate synchronicity. In the main empirical model, both the Panel-Corrected Standard Errors and the Generalized Least Square estimations were used to provided robust evidence of governance influencing transparency.

Findings

Corporate governance was found to broadly influence the release of firm-specific information in a relatively opaque market through the information environment. However, no evidence in support of the “auditor-reputation effects” theory was found. As well, CEO duality does not create an individual powerful enough to reduce the monitoring role of boards. We further document the presence of noise trading on the Ghana Stock Exchange.

Practical implications

This study suggests that specific corporate mechanism practices have implications for stock selection in a relatively high information asymmetry Capital Market. Investors require transparency; hence, firms with governance mechanisms that elicit such transparency are likely to attract investors.

Originality/value

This study is the first to examine the relationship between governance and transparency while using stock return synchronicity as a proxy for transparency in an emerging Ghanaian Capital Market.

Details

Journal of Financial Economic Policy, vol. 7 no. 2
Type: Research Article
ISSN: 1757-6385

Keywords

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