Implications of Oil Price Shocks for Monetary Policy in Ghana: A Vector Error Correction Model

We estimate a Vector Error Correction Model to explore the long run and short run linkages between the world crude oil price and economic activity in Ghana for the period 1970:1 to 2006:4. The results point out that there is a long run relationship between the variables under consideration. We find that an unexpected oil price increase is followed by an increase in price level and a decline in output in Ghana. We argue that monetary policy has in the past been with the intention of lessening negative growth consequences of oil price shocks, at the cost of higher inflation.Oil price shock, cointegration, vector error correction, impulse response

Do macroeconomic variables play any role in the stock market movement in Ghana?

This study examines the impact of macroeconomic variables on stock prices. We use the Databank stock index to represent the stock market and (a) inward foreign direct investments, (b) the treasury bill rate (as a measure of interest rates), (c) the consumer price index (as a measure of inflation), (d)Average crude oil prices , and (e) the exchange rate as macroeconomic variables. We analyse quarterly data for the above variables from 1991.1 to 2007.4. employing cointegration test, vector error correction models (VECM). These tests examine both long-run and short-run dynamic relationships between the stock market index and the economic variables. The paper established that there is cointegration between macroeconomic variable and Stock prices in Ghana indicating long run relationship. The VECM analyses shows that the lagged values of interest rate and inflation has a significant influence on the stock market. The inward foreign direct investments, the oil prices , and the exchange rate demonstrate weak influence on price changes. In terms of policy implication, the establishment of lead lag relation indicate that the DSI is not informational efficient with respect to interest rate, inflation inward FDI, Exchange rate and world Oil prices.Stock Market, Cointegration, Toatl derivative, Stock duration, partial differentiation

Gender Disparity In Financial Literacy: Evidence From Homogeneous Group

This paper interrogates the reality or otherwise the gender disparity in financial literacy using a homogenous group of randomly selected and 560 responded business students of School of Business, University of Cape Coast, Ghana. The intention is to provide better understanding of the confounding issues of gender as a determinant of financial literacy. Using a Chi-square and Independent t-test, this study analysed gender disparity in financial literacy of homogeneous group of 560 business students The male respondents were found to have an advantage in computational ability whilst the females are advantaged in non-computational ability.  This observed nominal difference was, however, found not to be significant through chi-square test of independence and independent t-test. Again, the effect sizes in all cases are very small which suggest diminishing differences due to the homogeneous nature of the sample.  The implication is that documented significant sex difference favouring male in financial literacy could emanate from sample dissimilarity and that irrespective of one’s financial orientation or experience, subsequent financial education is capable of bridging the literacy gap. This is important for the policy to bridge the sex gap in financial literacy.&nbsp

Physical activity in England: Who is meeting the recommended level of participation through sports and exercise?

This article is available through the Brunel Open Access Publishing Fund. Copyright © 2012 Anokye et al.Background: Little is known about the correlates of meeting recommended levels of participation in physical activity (PA) and how this understanding informs public health policies on behaviour change. Objective: To analyse who meets the recommended level of participation in PA in males and females separately by applying ‘process’ modelling frameworks (single vs. sequential 2-step process). Methods: Using the Health Survey for England 2006, (n = 14 142; ≥16 years), gender-specific regression models were estimated using bivariate probit with selectivity correction and single probit models. A ‘sequential, 2-step process’ modelled participation and meeting the recommended level separately, whereas the ‘single process’ considered both participation and level together. Results: In females, meeting the recommended level was associated with degree holders [Marginal effect (ME) = 0.013] and age (ME = −0.001), whereas in males, age was a significant correlate (ME = −0.003 to −0.004). The order of importance of correlates was similar across genders, with ethnicity being the most important correlate in both males (ME = −0.060) and females (ME = −0.133). In females, the ‘sequential, 2-step process’ performed better (ρ = −0.364, P < 0.001) than that in males (ρ = 0.154). Conclusion: The degree to which people undertake the recommended level of PA through vigorous activity varies between males and females, and the process that best predicts such decisions, i.e. whether it is a sequential, 2-step process or a single-step choice, is also different for males and females. Understanding this should help to identify subgroups that are less likely to meet the recommended level of PA (and hence more likely to benefit from any PA promotion intervention).This study was funded by the Department of Health’s Policy Research Programme

Foreign Direct Investment and Stock market Development: Ghana’s Evidence

Using multivariate cointegration and error correction model, this paper examines the impact of Foreign Direct Investment (FDI) on the stock market development in Ghana. Our results indicate that there exists a long-run relationship between FDI, nominal exchange rate and stock market development in Ghana. We find that a shock to FDI significantly influence the development of stock market in Ghana

Does financial sector development cause investment and growth? empirical analysis of the case of Ghana

This article examines whether financial sector development has ‘caused’ economic growth and investment in Ghana between 1970 and 2007. As a proxy for financial sector development we use credit to private sector as per cent of GDP, bank liquid reserve – asset ratio and liquid liability as a per cent of GDP. We use GDP growth as a proxy for economic growth and real domestic investment for investment growth. The dynamic interactions between the growth of real Per capita Gross Domestic Product, real domestic investment and indicators of financial sector development are investigated using the concept of Granger Causality after testing for cointegration using Johansen techniques. The empirical results obtained by the Johansen method suggest the existence of a stable long-run relationship between growth rate and financial sector development indicators identified in the study. The same is true for investment growth. However, with the exception of credit to private sector where the causality runs from economic growth only, we find bidirectional causality between economic growth and financial sector development indicators. For investment growth, the causality runs from investment growth to financial sector indicators except between investment growth and Liquid liability where bidirectional causality recorded. The article establishes that, in an overall sense, economic and investment have ‘caused’ financial sector development in Ghan

Working Capital Management Policies of the Listed Manufacturing Firms in Ghana

This study sought to examine the relationship between the aggressive/conservative current asset investment and financing policies for six manufacturing firms listed at Ghana Stock Exchange for a period of 2000-2013. Data were sourced from the annual reports of the firms and the publication of Ghana Stock Exchange. Descriptive statistics, One-way ANOVA and rank order correlation were used for analyzing the data. The results revealed that the listed manufacturing firms were following moderate working capital management policies. The study found significant differences among the current asset investment policies across different firms. However, no significant differences were observed for firms&rsquo; policies concerning relative aggressive/conservative current asset financing. Additionally, these significant differences or otherwise are not stable over time with the instability more prevalent in the current liability management.&nbsp

WORKING CAPITAL MANAGEMENT POLICIES AND RETURNS OF LISTED MANUFACTURING FIRMS IN GHANA

This study sought to determine the effects aggressive/conservative current asset investment and financing policies have on firms’ return for six manufacturing firms listed at Ghana Stock Exchange for a period of 2000-2013. Data were obtained from the annual reports of the firms and the Ghana Stock Exchange. The study adopted longitudinal explanatory non-experimental research design applied to dynamic panel ARDL framework in analyzing the data. The results revealed that the current asset investment and financing policies have highly significant positive effects on returns to equity holders in the long-run. The empirical evidence suggests that conservative current asset investment policies increase firms return while conservative financing policies yields negative returns. The study therefore would enable finance managers to be able to fashion out the appropriate working capital management policies. A firm pursuing conservative current asset investment policy should balance it with aggressive current asset financing policy in order to enhance profitability and create value for their investors.JEL Codes - G31; C2

Foreign Direct Investment (FDI) and Stock market Development: Ghana Evidence

Using multivariate cointegration and Innovation Accounting Methods, this paper examines the impact of Foreign Direct Investment (FDI) on stock market development in Ghana. The paper finds long-run relationship between FDI and stock market development in Ghana. Using impulse responses and Variance Decomposition from Vector Error Correction Model we find that shocks in FDI significantly influence the development of stock market in Ghan