Financial Inclusion and Economic Growth in West Africa: The Moderating Effect of Financial Openness

This paper examines the impact of financial inclusion on economic growth in the Economic Community of West African States (ECOWAS) countries. The study also investigates how financial inclusion through financial openness enhances growth. Applying the pooled estimated generalized least squares (EGLS) technique with data from 10 countries in ECOWAS over the period 2010-2017, the results reveal that financial inclusion exerts a positive significant influence on economic growth through its direct effect and via financial openness. The findings also show that while inflation reduces growth, trade openness and foreign direct investment significantly stimulate economic growth in ECOWAS. The study emphasizes the need for greater efforts to address the challenges involved in accessing financial services as one of the most effective ways of realizing inclusive growth

Stock Market Development, Foreign Private Investment and Economic Growth in Sub-Saharan Africa

This study investigates the impact of stock market development and foreign private investment on economic growth in Sub-Saharan Africa (SSA) over the period 2000-2017. The study controls for the impact of trade openness and inflation. Using the pooled estimated generalized least squares (EGLS) technique, we establish that there exists a negative relationship between stock market development and economic growth in Sub-Saharan Africa. We note that foreign private investment positively and significantly influences economic growth. The study further reveals that inflation negatively affects growth. We present key implications for policy based on the findings

Motivations for Foreign Bank Entry in Ghana: A Country-level Analysis

The number of foreign banks operating in emerging market economies has increased significantly in recent years. Financial globalization and technological advancement have dramatically altered the global banking landscape, resulting in an increasing pattern of international banks’ involvement. Aside from the global forces driving bank penetration, this study seeks to assess how country-level factors motivate foreign bank entry in Ghana. In doing so, we employ quarterly data spanning 2000Q1-2017Q4. Applying the autoregressive distributed lag (ARDL) technique, the results establish that while corruption significantly drives foreign bank entry in both short- and long-run, the impact of political stability on foreign bank entry is significant only in the long-run. The findings also show that banking sector profitability and banking sector stability matter for foreign bank entry in both short- and long-term. The study presents some implications for policy based on the findings

The effect of board characteristics and life-cycle on corporate performance

This research investigates the effect of board characteristics and corporate life-cycle on the performance of listed firms in Ghana covering the period 2009–2018. The paper adopts the approach propounded by Dickinson (2011) to cater to proxy measures of firms’ life cycle stages. Using the pooled estimated generalized least squares (EGLS), the findings reveal that chief executive officer (CEO) tenure has a positive significant effect on performance. The presence of inside directors negatively and significantly influences performance. The results further indicate that at different levels of statistical significance, the various stages of the firm’s life cycle have a negative impact on the main dependent variable (ROA). With the alternative firm performance proxy (ROE), the results report that aside from the decline stage which negatively drives performance, the rest of the stages (i.e., introduction, growth, and maturity) have a positive influence on performance. However, only the growth and maturity stages exert a significant effect on performance. As part of the suggestions, the study proposes that firms should reduce the proportion of executive directors and appoint more non-executive directors to the board to boost performance. Also, firms should endeavor to increase investment in research and development at every stage of their production to ensure steady profit growth

Business Failure Prediction: A Tri-dimensional Approach

Investigations of corporate failure prediction research usually implement binary classification into one of the distinguished groups – Distress or non-Distress companies. This study looks at a tri-dimensional approach which cluster firms into three (3) distinct dimensions namely - non-distress, semi-distressed and distressed. The study used secondary data from 2011 to 2015 obtained from the Ghana Stock Exchange (GSE) spanning across six industries, namely, Banking & Finance, Distribution, Food & Beverage, Insurance, Manufacturing and Mining & Oil. The study initially adopted the Altman (1968) Z score bankruptcy model to classify companies into non-distress, semi-distressed and distressed. Further analysis was conducted using the Hierarchical agglomerative cluster analysis to cluster companies into non-distress, semi-distressed and distressed. A comparison was then made between the Hierarchical agglomerative clustering against the Altman (1968) Z score bankruptcy classification to obtain higher classification. The outcome of the analysis revealed that the Hierarchical agglomerative cluster analysis and the Altman (1968) Z score bankruptcy model can both be used to classify companies into nondistress, semi-distressed and distressed based on the tri-dimensional approach instead of the binary classification (distressed and non-distressed). The study recommends that future research can explore other clustering methods for bankruptcy prediction to achieve higher and better classification