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Purpose This study aims to investigate the impact of female chairperson, female chief executive officer and presence of females on boards on listed firms’ profitability using data from Ghana. Design/methodology/approach This study used ordinary least square estimation and generalized least square (i.e. fixed and random effect estimation techniques) estimation on the data of 15 nonfinancial listed firms on Ghana Stock Exchange between 2010 and 2020. Findings The results show that while males dominate corporate executive positions in listed nonfinancial firms in Ghana, females serving in top corporate executive positions like chief executive officer, board chairperson and female board membership positively impact listed firms’ performance in the form of return on assets, net profit margin and gross profit margin. These findings are consistent even when year and industry effects are controlled for. This suggests that enacting policies at the national and firm levels to encourage female participation in corporate executive roles/positions are critical for promoting firm performance. Originality/value This study extends extant empirical literature on the economic role of female executives in firm performance from the developing context of Ghana. With calls in literature for more studies on the subject matter in varied contexts and conditions, this study takes the discussion a step further by investigating whether the gender of those in positions such as board chairperson and chief executive officer matters in firm profitability in Ghana.

Purpose Financial crises (FC) remain a global threat to the financial stability of financial institutions and international bank regulatory capital requirement (IBRCR) by the Committee on Banking Supervision provides mechanism for curbing the adverse effect of FC on financial stability. Hence, the purpose of this study is to provide, evidence on how IBRCR tones down the adverse FC effects on bank financial stability (BFS). Design/methodology/approach The study uses 102 economies between 2006 and 2016 in a two-step dynamic generalized method of moments model. Findings The results show that while FC and IBRCR negatively and positively impact BFS, respectively, it is observed that under the increasing presence of IBRCR, the negative effect of FC on BFS declines. Additionally, the results show that economies that maintain minimum IBRCR above 10.5% recommended by BASEL III are able to reinforce a significant reduction in the negative effect of FC on BFS. Practical implications These findings imply that in as much as financial crisis is injurious to BFS, regulators and policymakers can rely on IBRCR to avert the injurious effects of FC on BFS. Clearly, while IBRCR is necessary for reinforcing BFS through FC, bank managers who maintain IBRCR above the recommended 10.5% stands a better chance to taming the avert effect of FC on BFS. Additionally, economies that have not full adopted the BASEL minimum capital requirement may have to do so given its potential of dampening the adverse effect of FC on BFS. Originality/value The study presents an international perspective of how BASEL capital requirements can help tame global financial crisis using a global sample of 102 economies.

Purpose This paper aims to examine the effect of natural resources on the national productivity of high and low globalized economies in Africa. Design/methodology/approach This study uses two-step generalized method of moments dynamic panel data of 30 African economies between 2006 and 2016 to achieve the purpose of the study. Findings The results suggest that natural resources promote productivity within African economies regardless of the level of globalization. However, while natural resources have an overall enhancing effect on national productivity in both high and low globalized economies, the enhancing effect varies according to the forms of globalization. The findings of this study suggest that globalization can alter the nexus between natural resources and national productivity in Africa. The results imply that African Governments and their related policymakers can rely on globalization to promote the effect of natural resources on productivity of African economies. Practical implications This result is good and welcoming news, especially when natural resources in Africa have been described by prior studies as a curse to the continent. While globalization can be a tool for policymakers in Africa to deploy the positive effect of natural resources on national productivity, they might as well be careful as to which form of globalization they pursue, given that different forms and different levels or extent (high or low) of globalization yields different results on the nexus between natural resources and national productivity. Originality/value To the best of the authors’ knowledge, this study is the first of its kind to examine how natural resources affect national productivity in high and low globalized economies, especially in Africa.

This study examines how financial sector transparency (FST) administered through credit information sharing helps reduce the BLC growth induced by PBC in an emerging economy in Africa. The study em...

This study investigates the relationship between bank branches, financial intermediation, and financial stability in Ghana using 35 banks between 2009 and 2017. Employing a panel two-step dynamic G...

Purpose This study aims to examine the effect of private (PRST) and public (PUST) sector-led financial sector transparencies on bank interest margins (BIM) termed as social cost of financial intermediation in different institutional quality setups. Design/methodology/approach This study uses a two-step dynamic generalized method of moments panel data and bootstrapped quantile models with 91 economies between 2004 and 2016. Data is sourced from World Development Indicator and Global Development Finance databases. Findings The results show that under strong and weak political and financial regulatory institutional setups, the reducing effect of PRST on BIM are observed and reported while the full sample reports no significant nexus between PRST and PUST on BIM. Furthermore, under political institutional quality sample, economies with strong corruption control and regulatory quality are able to reinforce the dampening effect of PRST on BIM while under the same political institutional quality sample, economies with weak rule of law are able to heighten the reducing effect of PRST on BIM. Moreover, under financial regulator institutional quality sample, economies with strong overall weighted and unweighted, chief executive officer and policy dependent central banks are able to intensify the diminishing effect of PRST on BIM while under the same financial regulator institutional quality sample, economies with weak limits on lending are able to amplify the reducing effect of PRST on BIM. However, PUST is reported to propel lower levels BIM in the bootstrap models, especially in strong institutional economies. Practical implications These findings imply that policymakers may rely on PRST to reduce BIM, especially under financial regulatory institutional quality. Additionally, economies must be careful on their reliance on PRST because the effectiveness of PRST to tame high BIM is dependent on the strength of political and financial regulatory institutions. Originality/value To the best of the authors’ knowledge, this study presents first time international evidence on the effect of private and public sector-led financial transparency on BIM in strong and weak political and financial regulatory institution economies.

Purpose Existent literature suggests that Africa is heavily endowed with agriculture resources and entrepreneurship remains an important mechanism for promoting national productivity and other economic outcomes. Despite these, empirical evidence on how agriculture resources promote the effect of entrepreneurship on national productivity in Africa is nonexistent given the abundance of agriculture resources and the need for Africa to increase its productivity, which has implications for improving welfare. Hence, this study aims to examine the interplay of how agriculture resources and entrepreneurship influence national productivity by way of exploring for threshold and complementarity effects of agriculture resources in Africa. Design/methodology/approach This uses panel data of 29 Africa economies between 2006 and 2016 in a bootstrap quantile regression model. Findings First, it is reported that initial levels of agriculture resources in the form of crop and arable lands reduce national productivity while the extreme increase in agriculture resources promotes national productivity in Africa. This implies a nonlinear direct U-shape effect of agriculture resources on national productivity indicating that the enhancing effect of agriculture resources on national productivity is only achieved beyond a certain threshold of average agriculture resources. Second, agriculture resources complement entrepreneurship (which initially reduced national productivity) to promote national productivity. This implies that there is a synergetic-complementarity relationship between entrepreneurship and agriculture resources on national productivity. Practical implications These findings suggest that governments that are interested in boosting national productivity through agriculture resources may have to commit more financial resources to develop and reclaiming more agriculture resources (in the form of crop and arable lands) given that some threshold of agriculture resources are needed to promote national productivity. Similarly, developing agriculture resources by policymakers can help complement entrepreneurship to further improve the effects of entrepreneurship on national productivity. Originality/value This study attempts to present first-time evidence on the interplay between agriculture resources and entrepreneurship on national productivity by way of exploring for threshold and complementarity effects of agriculture resources in Africa.

Purpose The purpose of this paper is to examine the effect of foreign bank assets (FBA) and (FBP) presence is examined on banking stability in the economies with strong and weak country-level corporate governance (CLCG) in Africa between 2006 and 2015. Design/methodology/approach Using a Prais–Winsten panel data model of 86 banks in about 30 African economies, findings on how FBA and presence influence banking stability in strong and weak corporate governance economies under different regulatory regimes are reported for the first in Africa. Findings The findings show that foreign bank presence (FBP) and assets promote banking stability. However, the positive effect of FBA and presence is enhanced in economies with strong CLCG, whereas the positive effect of FBA and presence is weakened in economies with weak CLCG. After introducing different regulatory regimes, it is observed that the enhancing effect of FBP and assets on banking stability in the full sample and economies with strong and weak CLCG systems is deepened or improved under the loan loss provision regulation regime. However, under the private and public sector-led financial transparency regulations, the reducing effect of FBP and assets on banking stability in economies with weak corporate governance systems is further dampened. Practical implications These findings show that the relationship between FBP and assets is deeply shaped by corporate governance systems and regulatory regimes in Africa. Hence, policymakers must build strong corporate governance and sound regulatory regimes to enhance how foreign bank operations promote banking stability. Originality/value This study presents first-time evidence on how FBA and presence influence banking stability under strong and weak governance systems while considering different regulatory regimes.

PurposeThis study examines the possible nonlinear effect of size on stakeholder and shareholder profitability in the Ghanaian insurance brokerage industry.Design/methodology/approachThis study employs a panel dataset of 64 Ghanaian insurance brokerage firms spanning 2011–2015. Static [ordinary least squares (OLS), fixed effect and random effect and dynamic (two-step generalized method of moments (GMM))] estimation techniques are employed to analyze the data.FindingsThe study finds the existence of both economies and diseconomies of scale and scope theories in the Ghanaian insurance brokerage industry confirming the existence of nonlinear nexus between size and performance. This finding is consistent for both stakeholder and shareholder profit performance. Thus, the results show that size improves profitability of insurance brokerage firms, but beyond a certain threshold, the relationship turns negative as size negatively affects profitability.Practical implicationsThe research findings have implications for both policy and research; the study recommends that Ghanaian brokerage managers should understand that not all growth is good and exercise a duty of care when applying growth strategies by monitoring size effect on performance so as not to go beyond the inflection point. Further research can be done to examine this effect in other contexts, timeframes and jurisdictions.Originality/valueThis research is unique in that it employs a panel dataset consisting of 96% of insurance brokerage firms in Ghana whilst employing both static and nonstatic regression models to examine the effect of size. The research analysis adopted is robust, and the findings are significant. Also, the lack of empirical studies on the operations and dealings of auxiliary institutions such as the insurance brokerage firms adds value to this research.

In this study, we examine bank liquidity creation and the effect of ownership types on liquidity creation in Ghana for the first time. The study employs data on 26 banks obtained from Bank of Ghana...

The study investigates how financial sector transparency moderates the influence of financial crises on bank market power across seventy-five economies between 2004 and 2014. Employing two-step dynamic system generalized method of moments the study shows that while public sector-led financial sector transparency reduces bank market power, private sector-led financial sector transparency promotes bank market power given that private sector-led transparency gives financial cost advantage to financially sound banks to solidify the market power and dominance. Similarly, while financial crises reduce the market power of banks implying that during financial crises banks lose their market power, financial sector transparency promotes the negative effect of financial crises on bank market power. This implies that during financial crises, financial sector transparency whether enforced through private or public sector, boosts the weakening effect of financial crises on bank market power. These findings imply that regulators can rely on financial transparency to tame bank market power to enhance banking competitiveness. The findings and results are consistent even when country, time and continental effects are controlled for.

This study examines the effect of credit information sharing on debt financing structure of listed firm on the Ghana Stock Exchange market between 2003 and 2013. Employing a panel data of 20 listed...

PurposeThis study provides empirical evidence for the first time on how different measures of monetary policy affect banking profitability in Ghana.Design/methodology/approachProviding 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.FindingsThe 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 implicationsThese 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/valueThis 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.

Motivated by the agency theory and the need to examine the effect of separation of ownership and management, this study examines the determinants of profitability in different firm ownership structures and how different ownership structures impact the profitability of listed firms between 2003 and 2013, using pooled annual data of 23 Ghanaian listed firms. Employing a number of static models (OLS, Random Effects and 3 Stage Least Squares), we find evidence that while profit determinants vary for listed firms given their ownership structures, ownership structures also affected profitability differently. Specifically, for listed firms, profitability was determined by capital intensity, liquidity, financial risk, age and GDP; for non-family owned listed firms, profitability was determined by capital intensity, liquidity, market share and age; for foreign-owned firms, profitability was determined by capital intensity, liquidity, age and GDP; and for non-foreign ownership, profitability was determined by capital intensity, liquidity, financial risk, growth, age and GDP. When we examine the impact of ownership structure on profitability and find that family-owned listed firms make 30% less profits compared to nonfamily owned ones, whilst foreign-owned firms make 13% more profits than non-foreign owned ones. These findings confirm the agency theory which posits that separation of ownership and management, though may lead to agency problems, can positively affect profits. The study recommends that family-owned listed firms should consider diluting ownership in order to grow more profits.

In this study, the effect of sectoral loan portfolio concentration on bank stability is investigated in the Ghanaian banking sector between 2007 and 2014. Specifically, we investigate the linearity and non-linearity effects of sectoral loan concentration on bank stability given the limited exploration of this nexus. Employing a two-step generalized method of moments (GMM) robust random and fixed effects panel models of 30 banks, the study provides evidence showing that sectoral loan concentration weakens the stability of banks. This confirms the concentration-fragility hypothesis and the diversification theory of traditional banking but may promote bank stability beyond a certain threshold point. This implies that bank sectoral loan concentrate has a direct non-linear U-shape effect on bank stability in Ghana. We argue that although sectoral loan concentration may weaken stability of banks in the short run, it may however enhance the stability of banks in the long run through prolonged expert knowledge, experience and understanding of sectors. From these findings, policymakers, regulators and bank managers must not only develop and design policies and regulations that prohibit sectoral loan concentration but should also incorporate plans and policies that encourage banks to develop core competence and competitive advantage to take advantage of advancing bank stability through sectoral loan concentration. JEL Codes: G10; G18; G41

Purpose This study aims to examine the hypothesis that the effect of insurer risks on profitability is conditional on regulation, using two main regulatory directives in the Ghanaian insurance market as a case study. Design/methodology/approach This study used the robust ordinary least square and random effect techniques in a panel data of 30 insurers from 2009 to 2015 to test the research hypothesis. Findings The results suggest that regulations on no credit premium and required capital have insignificant effects on profitability of insurers. On the contrary, this study documents evidence that both policies mitigate the effect of underwriting risk on profitability and suggests that regulations significantly mitigate the negative effect of underwriting risk to improve profitability. Practical implications The finding suggests that policymakers and regulators must continue to initiate, design and model regulations such that they help tame risk to improve the performance of insurers in Ghana. Originality/value This study provides first-time evidence on the role of regulations in controlling risks in a developing insurance market.

This study examines the effect of foreign bank assets and presence on banking stability in the economies with strong and weak country-level corporate governance in Africa between 2006 and 2015. Employing a Prais-Winsten panel data model on 86 banks in about 30 African economies, the findings on how foreign bank assets and presence influence banking stability in strong and weak corporate governance economies under different regulatory regimes are reported for the first time in Africa. The initial findings show that foreign bank presence and assets promote banking stability. However, the positive effect of foreign bank assets and presence is enhanced in economies with strong country-level corporate governance, while the positive effect of foreign bank assets and presence is weakened in economies with weak country-level corporate governance. After introducing different regulatory variables (regimes), it is observed that the enhancing effect of foreign bank presence and assets on banking stability in the full sample and economies with strong and weak country level corporate governance systems is deepened or improved under loan loss provision regulation regime. However, under the private and public sector-led financial transparency regulations, the reducing effect of foreign bank presence and assets on banking stability in economies with weak corporate governance systems is further dampened. These findings show that the relationship between foreign bank presence and assets is deeply shaped by corporate governance systems and regulatory regimes in Africa. Hence, policymakers must build strong corporate governance and sound regulatory regimes to enhance how foreign bank operations promote banking stability.

PurposeThe purpose of this paper is to explore the relationship between corporate governance structures and stakeholder and shareholder value maximization perspectives in 267 African banks from 2006 to 2011.Design/methodology/approachThe authors used the Prais–Winsten ordinary least squares and random effect regression models to explore this relationship to ensure consistency and efficiency in results. The data for this study were collected from Bankscope.FindingsThe results of this study show that corporate governance structures such as CEO duality, nonexecutive members and extreme large board size lead to a reduction in both shareholder and stakeholder value maximization. However, audit independence and board size also promote both shareholder and stakeholder value maximization. Although gender diversity promotes profit maximization, it was not significant in any of the models estimated. The results further suggest that the same corporate governance structures promote and detract shareholder and stakeholder value maximization in Africa although the effect of corporate governance structures was weightier on shareholder value maximization confirming the agency theory.Practical implicationsFrom these findings, bank management must pursue the institution of good corporate governance structures and avoid weak corporate governance structures to promote shareholder and stakeholder value maximization. Also equity holders may have to pay particular attention to corporate governance structures because they benefit the most from the institution of good corporate governance structures.Originality/valueThis study explores and compares how corporate governance structures promote shareholder and stakeholder value maximization separately in African banks. To the best of the authors’ knowledge, this is the first of such studies.

This study takes advantage of the lack of empirical studies on the effect of credit information sharing and funding cost of banks and investigates credit information sharing and bank funding cost in Africa between 2006 and 2012. Employing a two†step generalized method of moments regression of 233 banks in 17 African countries, the study provides new revelations. The study shows that the quality of credit information shared is key and persistent in reducing funding cost of banks. Again, the study confirms that the coverage of private credit bureaus significantly reduced bank funding cost whereas no such evidence was found for coverage of public credit registries. Further, although the study found evidence to support that the presence of credit information reduces bank funding cost, no evidence was found to support that countries that use both private credit bureaus and public credit registries are able to reduce funding cost of banks in Africa. From these results, it is evident that credit information sharing presence, coverage, and quality reduces funding cost in Africa. For policy recommendations, policymakers and bank boards must team up and set up credit information sharing institutions to help reduce information asymmetry and funding cost in countries that do not share credit information. Also, the introduction and establishment of credit information sharing must be geared towards private bureaus as they are more effective in reducing funding cost of banks. Again, policymakers must enact laws and policies that deepen the coverage, depth, and quality of credit information shared so that the financial sector of Africa countries can realize the full potential of credit information sharing.

The study examines credit information sharing through private credit bureaus and public credit registries and their effect on bank credit risk in low and high income countries in Africa. The study covers periods between 2006 and 2012 with 548 bank observations in Africa. Employing a Prais-Winsten panel data estimation, the study established that credit information sharing whether through private credit bureaus or public credit registries reduces bank credit risk in both low and high income countries and Africa as a whole. Further analyses reveal that credit information shared through public credit registries was only negatively and significantly related to bank credit risk when all countries that share credit information through public credit registries are observed as one unit but had no significant effect in low or high income countries. On the contrary, credit information shared through private credit bureaus reported a negative and significant effect on credit risk in low and high income countries as well as all countries that shared information through private credit bureaus. This suggests that credit information shared through private credit bureaus are more robust in dealing with bank credit risk regardless of a banks’ income bracket. Hence, countries that do not share credit information should do so especially through private credit bureaus so as to help reduce bank credit risk regardless of the income bracket differences. Again, governments in Africa must enact laws that expand the coverage and scope of credit information shared so as to enhance the effectiveness of information sharing.

This study examines the effect of private and public sector led financial sector transparency on bank interest margins across eighty-six economies. Using a two-step dynamic system generalized method of moments, least square dummy variables, fixed effects and bootstrap quantile panel models between 2005 and 2016, the findings of the two-step GMM are reported as follows. First, results reveal that financial sector transparency whether led by private or public sector reduces interest margins. Second, while no statistical evidence was found on which of the two (private or public sector led transparency) is more effective in dealing with bank interest margins, public sector-led financial transparency is found to be more consistent in reducing bank interest margins across many more economies. Third, the study shows that the effect of financial sector transparency is visible at lower and middle levels of bank interest margins implying that economies with lower and moderately high bank interest margin level can benefit more from policies targeted at improving transparency in the financial sector. These findings imply that the sampled countries must enact policies and laws that deepen and expand financial sector transparency in order to potentially reduce bank interest margins for the good of banking market participants and society at large.

This study examines the effect of private and public sector led financial sector transparency on bank interest margins across eighty-six economies. Using a two-step dynamic system generalized method of moments, least square dummy variables, fixed effects and bootstrap quantile panel models between 2005 and 2016, the findings of the two-step GMM are reported as follows. First, results reveal that financial sector transparency whether led by private or public sector reduces interest margins. Second, while no statistical evidence was found on which of the two (private or public sector led transparency) is more effective in dealing with bank interest margins, public sector-led financial transparency is found to be more consistent in reducing bank interest margins across many more economies. Third, the study shows that the effect of financial sector transparency is visible at lower and middle levels of bank interest margins implying that economies with lower and moderately high bank interest margin level can benefit more from policies targeted at improving transparency in the financial sector. These findings imply that the sampled countries must enact policies and laws that deepen and expand financial sector transparency in order to potentially reduce bank interest margins for the good of banking market participants and society at large.

The study sought to determine the effect bank level corporate governance have on risk taking behaviour of banks in Africa and its income bracket groupings using a two-step GMM panel dataset of 215 banks from 29 African countries. The results show that while board size and CEO duality significantly reduce risk taking behaviour of banks in Africa, extreme increase in board size increased risk taking behaviour of banks in Africa. Furthermore, the results reveal that the effect of bank level corporate governance structures on bank risk taking behaviour varies greatly across banks in different income brackets in Africa. This implies that the effects of corporate governance structures are shaped by contextual settings and effects. The policy implication from these findings are that bank regulators must institute corporate governance frameworks that help shape risk taking behaviour of banks which will enhance financial institution and sector soundness and stability. Also, bank ownership and management must be careful in the selection and implementation of bank corporate governance structures since not all the corporate governance structures induce the stability of banks given the income bracket a bank finds itself.

We investigate bank profitability in Ghana using periods before, during and after the globe financial crises with the five step du-pont model for the first time.We adapt the variable of the five step du-pont model to explain bank profitability with a panel data of twenty-five banks in Ghana from 2006 to 2012. To ensure meaningful generalization robust errors fixed and random effects models are used.Our empirical results suggests that bank operating activities (operating profit margin), bank efficiency (asset turnover), bank leverage (asset to equity) and financing cost (interest burden) were positive and significant determinants of bank profitability (ROE) during the period of study implying that bank in Ghana can boost return to equity holders through the above mentioned variables. We further report that the five step du-pont model better explains the total variation (94%) in bank profitability in Ghana as compared to earlier findings suggesting that bank specific variables are keen in explaining ROE in banks in Ghana.We cited no empirical study that has employed five step du-pont model making our study unique and different from earlier studies as we assert that bank specific variables are core to explaining bank profitability.

This study assessed credit growth, asset quality and profitability in the banking industry of Ghana during pre and post information sharing eras. The study employed industry level financial ratios to derive means, standard deviations and pearson correlations. The study further employed t-test to test for significant difference in bank performance during pre and post information sharing ears. The results indicate that the Ghanaian banking industry improved in all profitability measure during post-information sharing era. Also, deteriorating asset quality measures were stabilized during post-information sharing era. Furthermore, the study finds that there was a significant difference in non - performing loans ratio in the two information sharing eras. These findings are consistent with earlier findings. Hence the study recommends the establishment of Information Sharing Institutions (ISI), expanding the coverage of ISI and publicizing information sharing in emerging economies so as to strengthen the stability and soundness of the banking system.