Effect of Credit Risk and Liquidity Risk on the Performance of Commercial Banks in Ghana

In recent years, commercial banks in Ghana have seen great development in assets and profitability and have been playing increasingly important roles on national economy and social development which has become irreplaceable in a wide range. However, financial risks have been identified as the cause of hinderances to the banks’ normal development and has rendered some banks to fail. In recent years, Ghana’s commercial banks have faced vigorous challenges.  An important setback is the collapsing and merging of commercial banks and the increment of the minimum capital requirement. The cause of these misfortunes can be attributed to the combine effect of liquidity risk and credit risk since bank managements, supervisory authorities and government overlooked their impact. The focus of this paper is to study the impact of credit risk and liquidity risk on the performance of commercial banks in Ghana. The paper studied the annual and financial reports of licensed commercial banks in Ghana over a period of 14 years. The hypotheses generated for the study was tested using the OLS regression. The results revealed a negative relationship between non-performing loans and performance (ROA). Similarly, credit ratio and loan to deposit ratio also had a negative effect on ROA of banks in Ghana. On the contrary, liquidity ratio revealed to have a positive relationship with the dependent variable. The study recommended that, Ghanaian commercial banks must adopt a general framework for liquidity risk and credit risk management to ensure avoidance or reduction in the occurrence of these risks. Control variables help to check the robustness and also explain the objectives of the study in a more precise way. Keywords: Credit Risk; Liquidity Risk; Commercial Banks: Performance; Ghana DOI: 10.7176/RJFA/11-17-11 Publication date:October 31st 2020

Strategies for Gaining and Maintaining Employee Trust in Private and Public Institutions. The Case of University of Derby (UK) and Valley View University (Ghana)

Trust in the relation of the employer to employee is a key determinant to the success of every organization. Several research has been done on this subject matter but little attention is paid to educational instituitions. Therefore, the objective of this research is to identify and examine the strategies for gaining and employee trust in with emphasis on large organizations, and also to determine the impact of employee trust in both private and public educational institutions. Both quantitative and qualitative techniques are deployed to perform analysis on data collected from respondents from University of Derby, United Kingdom; and Valley View University, Ghana. Factors common to both case studies for gaining employee trust are the use of consistent approach, managers been role models, equal treatment of employees, similar work load, and team praise. Some recommendations are made to further improve the work. Keywords: Employee trust, Organizational performance, employee outcomes DOI: 10.7176/EJBM/11-33-09 Publication date: November 30th 201

Collapse of Big Banks in Ghana:Lessons on Its Corporate Governance

Funding: National Natural Science Foundation of China (No. 71371087) Abstract The news that two indigenous banks, UT and Capital Bank have been taken over by GCB Bank has come as a shock to many Ghanaians, as just a year ago, Capital Bank was adjudged the Best Growing Bank, and Best Bank in Deposits & Savings at the15th Edition of Ghana Banking Awards while UT Bank was adjudged best bank in 2011 by the same institution. UT bank is one of Ghana’s most celebrated brands, after it evolved from a micro-finance company into a successful bank.The study reveals the weak compliance to common Corporate Governance practices within the two banks. Specifically, the two banks had small board size as compared to the standard size of the banking industry. Also, the boards did not have enough committees to discharge its operation. The independence of the boards was also impaired as in most of the directors are executives and the non-executive directors have a close relationship with the promoters and executives. Keywords: Corporate Governance, Collapse, Commercial Banks, Board of Directors DOI: 10.7176/RJFA/10-10-04 Publication date:May 31st 201

Impact of Board Characteristics on Corporate Social Responsibility Disclosure in Ghana

This study examines the impact of board characteristics on Corporate Social Responsibility (CSR) disclosure in Ghana. It uses panel data covering 15 financial years which was extracted from the companies’ annual report to test the hypothesis using OLS regression. The results provide evidence that board characteristics such as size, board independence, board members below age 40, foreign nationals on board and gender diversity has a positive and significant impact on the CSR disclosure in Ghana. Board size recorded a negative and significant impact on CSR disclosure while women as board chairperson recorded no significant impact on CSR disclosure. In terms of structural break, the results indicate that, there is no structural break at 1% and 5%. However, at 10%, there is structural break. Based on these findings, the study recommends that, board size should be made up of minimum of 5 and maximum of 9. Again, there should be gender diversity, more independent directors, foreign nationals and younger board members below age 40 to ensure effectiveness and full disclosure of CSR in listed companies in Ghana

Empirical study on the impact of working capital management on going concern of manufacturing firms in Ghana

AbstractBusinesses strive for effective working capital management (WCM) since ineffective WCM influences firms’ failure in developing economies. However, the connection between WCM and the going concern of firms has not received significant quantitative attention. Hence, this study examines the impact of WCM on the going concern of manufacturing businesses in Ghana. The study goes beyond the edges and fills the literature gap on WCM and going concerns. Using panel data for 55 large-scale manufacturing companies in Ghana from 2002 to 2022, the study employed the Fixed Effect as the main estimation technique and the Random Effect as the robustness test estimator. The findings affirm the need for working capital management since it influences the going concerns of manufacturing firms. Hence, it is recommended that measures including effective mobilization of inventories, cash, debtors, and creditors should be the main motive of management and owners of the business

Does green accounting influences ecological sustainability? Evidence from a developing economy

AbstractThis study examined the impact of green accounting on ecological sustainability and employed environmental costs as a mediation between green accounting and sustainability. The study focused on pharmaceutical companies because of the heavy use of natural resources and the subsequent greenhouse gases and wastewater from this sector pose a risk to the ecological system. The data utilized in this research was obtained from 372 respondents from 35 registered members of Pharmaceutical Manufacturers Association of Ghana through online questionnaire. PLS-SEM was used to analyze the data and tested the hypotheses for the study using SMART-PLS 4. The findings revealed that environmental compliance and business efficiency have a major and constructive effect on sustainability, and also discovered that environmental costs mediated the impact of green accounting on sustainability. This study recommends that policymakers and corporations must take a holistic and coordinated approach when considering the effects of their actions on society and the environment

Assessing the impact of financing decisions and ownership structure on green accounting disclosure: Evidence from developing economies

This study examines the impact of financing decisions and ownership structure on green accounting disclosure (GAD) in developing economies, where sustainability practices have not been extensively integrated into business models. We conducted empirical analysis considering 172 manufacturing companies from 2001 to 2022, utilizing both fixed effect and random effect estimation techniques. The findings revealed that firms that rely primarily on debt financing tend to have an inverse relationship with the levels of green accounting disclosure. However, firms that depend mainly on equity financing tend to have higher levels of green accounting disclosure. In addition, the results of the estimation analysis showed a favorable association between ownership concentration and disclosure of green accounting practices. The findings suggest that policymakers should consider incentivizing firms to prioritize equity financing over debt financing to promote higher levels of green accounting disclosure. Additionally, policies should aim at encouraging ownership concentration within firms to enhance the transparency and accountability of environmental reporting practices, ultimately advancing the achievement of Sustainable Development Goals 12 and 13

The Moderating Role of Ownership Concentration on Financing Decisions and Firm’s Sustainability: Evidence from China

We examined the impact of financing decisions on a firm’s sustainability in China as it aspires to achieve carbon neutrality. To proxy firms’ sustainability performance, we proposed an index for environmental, social, and governance (ESG) performance. The financing decision was proxied by debt funding and equity funding. Using secondary data from China Stock Market Accounting Data from 2016 to 2022, we utilize the fixed effect and fully modified ordinary least squares estimators for the empirical analysis. The analysis indicated a favorable link between debt funding and ESG performance. We uncovered an inconsistent association between equity funding and ESG performance. Moreover, ownership concentration revealed a significant role in moderating the impact of debt financing and ESG performance in China. The findings affirm that firms should rely on debt funding rather than equity funding to enhance their ESG performance. Hence, policymakers should enact laws allowing easy access to debt funding for companies to ensure higher ESG performance. This, in the long term, will contribute to the Chinese dream of carbon neutrality