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Papers by Emmanuel Buabeng
Journal of Social and Economic Development
The main objective of this paper is to investigate the impact of lending rate on economic growth ... more The main objective of this paper is to investigate the impact of lending rate on economic growth in Ghana. To do this, we employ the autoregressive distributed lags model (ARDL) and the Toda and Yamamoto (1995) causal approach as estimation strategy. The estimates from the ARDL model suggest that ceteris paribus one percent increase in lending rate generates approximately 0.15 decrease in economic growth of Ghana in the long. In the short run, one percent increase in lending rate also generates approximately 0.112 percent decrease in economic growth. Contrary to the widespread belief that lending rate induce economic growth, we find that gross domestic product rather spurs lending rate, using Toda and Yamamoto (1995) causal approach. Our findings suggest that monetary authorities should embark on policy interventions that aim at taming lending rate towards growth enhancing targets. This will encourage individuals, firms and other institutions to borrow from commercial banks to incre...
Economics Literature
Monetary policy, foreign direct investment, and the stock market continue to dominate in discussi... more Monetary policy, foreign direct investment, and the stock market continue to dominate in discussions in developing countries. However, the linkage between the three variables in empirical literature remains unclear. This study aims to test two separate hypotheses: Firstly, the study examines the effects of monetary policy on stock market performance in Ghana. Secondly, the study also empirically investigates the effect of foreign direct investment on stock market performance in Ghana. Autoregressive Distributed Lag (ARDL) model was employed as an estimation strategy to examine the short and long-run effects using annual time series data from 1990 to 2019. The study revealed that monetary policy rate and money supply exerts a statistically significant negative and a positive effect on stock market performance in both the long and short-run in Ghana, respectively. It was also found that foreign direct investment has significant and a positive effect on stock market performance in Ghan...
Cogent Economics & Finance
We investigate the asymmetric effect of oil and gas resource rent on economic growth of Ghana for... more We investigate the asymmetric effect of oil and gas resource rent on economic growth of Ghana for the period 2010 to 2019, dwelling on the hypothesis that natural resources extraction has double-edge effect on economic growth. Using Nonlinear Autoregressive Distributed Lag (NARDL) model as estimation strategy, we find that oil and gas resource rent affect economic growth asymmetrically. Specifically, our NARDL estimates suggest that oil resource rent promotes economic growth significantly, providing empirical evidence in support of the resource blessing hypothesis. However, gas resource rent exerts a significant adverse effect on economic growth, providing empirical evidence to support the resource curse hypothesis. Our findings point to the need for policies that promote the expansion of oil resources firms than gas resource firms in the short run while long term policies should target setting up both oil and gas resource firms in developing countries, especially countries with similar socioeconomic and demographic setting like Ghana. Finally, government and monetary authorities should ABOUT THE AUTHORS Opoku Adabor holds B.A and Master's in economics from Kwame Nkrumah University of Science. He is currently a PhD student at RMIT University, Australia. He has worked as graduate research assistant at KNUST. His research interest includes macroeconomics, international, monetary economics and economic policy analysis.
Asian Journal of Economics, Business and Accounting
This study examines the effect of oil and gas resource rent on economic growth of Ghana for the p... more This study examines the effect of oil and gas resource rent on economic growth of Ghana for the period of 2007 to 2019. The study uses the bounds test approach to cointegration within the framework of autoregressive distributed lags model as the estimation strategy. The results from the study revealed that oil resource rent had a negative and significant relationship with economic growth of Ghana. However, gas resource rent had a positive impact on economic growth of Ghana. Furthermore, the study also found that foreign direct investment and exchange rate had significant positive relation with economic growth of Ghana respectively. For government expenditure, it exerts a negative impact on economic growth of Ghana. Based on the negative and significant relationship with oil resource rent and economic growth of Ghana, it is recommended that the government should reduce taxes on oil industries to help increase the production of oil and gas in Ghana. Furthermore, the study recommends ...
Economics Literature
This study examines the effect of exchange rate fluctuations on the performance of manufacturing ... more This study examines the effect of exchange rate fluctuations on the performance of manufacturing firms in Ghana for the period 1990 to 2018. The study uses the bounds test approach to cointegration within the framework of autoregressive distributed lags model as the estimation strategy. The results reveal that exchange rate and monetary policy rate has a negative and significant relationship with manufacturing firm performance. It was also found that inflation, trade openness, and investment have significant positive relation with manufacturing firm performance in Ghana. Based on the negative and significant relationship with exchange rate and manufacturing firm performance, it is recommended that government and private partnership should ensure effective management of the exchange rate fluctuation and also encourage manufacturing firms to patronize locally made capital goods for their production in the face of a depreciating exchange rate. Further, the study recommends that monetary authorities should reduce interest rate to increase investment by firms. This will enhance manufacturing firms' performance.
This paper examines the financial determinants of private investment in Ghana using annual time s... more This paper examines the financial determinants of private investment in Ghana using annual time series data from 1970 to 2010. Based on the autoregressive distributed lag (ARDL) bounds testing procedure to cointegration, the paper finds existence of cointegration among the variables. The empirical results support the view that private investment declines in both the short run and long run if the real interest rate is high and investors face severe financing constraints when credit is made scarce to the sector. Recommended were policies that would eliminate the financing constraints to make credit easily accessible to private investors.
Journal of Social and Economic Development
The main objective of this paper is to investigate the impact of lending rate on economic growth ... more The main objective of this paper is to investigate the impact of lending rate on economic growth in Ghana. To do this, we employ the autoregressive distributed lags model (ARDL) and the Toda and Yamamoto (1995) causal approach as estimation strategy. The estimates from the ARDL model suggest that ceteris paribus one percent increase in lending rate generates approximately 0.15 decrease in economic growth of Ghana in the long. In the short run, one percent increase in lending rate also generates approximately 0.112 percent decrease in economic growth. Contrary to the widespread belief that lending rate induce economic growth, we find that gross domestic product rather spurs lending rate, using Toda and Yamamoto (1995) causal approach. Our findings suggest that monetary authorities should embark on policy interventions that aim at taming lending rate towards growth enhancing targets. This will encourage individuals, firms and other institutions to borrow from commercial banks to incre...
Economics Literature
Monetary policy, foreign direct investment, and the stock market continue to dominate in discussi... more Monetary policy, foreign direct investment, and the stock market continue to dominate in discussions in developing countries. However, the linkage between the three variables in empirical literature remains unclear. This study aims to test two separate hypotheses: Firstly, the study examines the effects of monetary policy on stock market performance in Ghana. Secondly, the study also empirically investigates the effect of foreign direct investment on stock market performance in Ghana. Autoregressive Distributed Lag (ARDL) model was employed as an estimation strategy to examine the short and long-run effects using annual time series data from 1990 to 2019. The study revealed that monetary policy rate and money supply exerts a statistically significant negative and a positive effect on stock market performance in both the long and short-run in Ghana, respectively. It was also found that foreign direct investment has significant and a positive effect on stock market performance in Ghan...
Cogent Economics & Finance
We investigate the asymmetric effect of oil and gas resource rent on economic growth of Ghana for... more We investigate the asymmetric effect of oil and gas resource rent on economic growth of Ghana for the period 2010 to 2019, dwelling on the hypothesis that natural resources extraction has double-edge effect on economic growth. Using Nonlinear Autoregressive Distributed Lag (NARDL) model as estimation strategy, we find that oil and gas resource rent affect economic growth asymmetrically. Specifically, our NARDL estimates suggest that oil resource rent promotes economic growth significantly, providing empirical evidence in support of the resource blessing hypothesis. However, gas resource rent exerts a significant adverse effect on economic growth, providing empirical evidence to support the resource curse hypothesis. Our findings point to the need for policies that promote the expansion of oil resources firms than gas resource firms in the short run while long term policies should target setting up both oil and gas resource firms in developing countries, especially countries with similar socioeconomic and demographic setting like Ghana. Finally, government and monetary authorities should ABOUT THE AUTHORS Opoku Adabor holds B.A and Master's in economics from Kwame Nkrumah University of Science. He is currently a PhD student at RMIT University, Australia. He has worked as graduate research assistant at KNUST. His research interest includes macroeconomics, international, monetary economics and economic policy analysis.
Asian Journal of Economics, Business and Accounting
This study examines the effect of oil and gas resource rent on economic growth of Ghana for the p... more This study examines the effect of oil and gas resource rent on economic growth of Ghana for the period of 2007 to 2019. The study uses the bounds test approach to cointegration within the framework of autoregressive distributed lags model as the estimation strategy. The results from the study revealed that oil resource rent had a negative and significant relationship with economic growth of Ghana. However, gas resource rent had a positive impact on economic growth of Ghana. Furthermore, the study also found that foreign direct investment and exchange rate had significant positive relation with economic growth of Ghana respectively. For government expenditure, it exerts a negative impact on economic growth of Ghana. Based on the negative and significant relationship with oil resource rent and economic growth of Ghana, it is recommended that the government should reduce taxes on oil industries to help increase the production of oil and gas in Ghana. Furthermore, the study recommends ...
Economics Literature
This study examines the effect of exchange rate fluctuations on the performance of manufacturing ... more This study examines the effect of exchange rate fluctuations on the performance of manufacturing firms in Ghana for the period 1990 to 2018. The study uses the bounds test approach to cointegration within the framework of autoregressive distributed lags model as the estimation strategy. The results reveal that exchange rate and monetary policy rate has a negative and significant relationship with manufacturing firm performance. It was also found that inflation, trade openness, and investment have significant positive relation with manufacturing firm performance in Ghana. Based on the negative and significant relationship with exchange rate and manufacturing firm performance, it is recommended that government and private partnership should ensure effective management of the exchange rate fluctuation and also encourage manufacturing firms to patronize locally made capital goods for their production in the face of a depreciating exchange rate. Further, the study recommends that monetary authorities should reduce interest rate to increase investment by firms. This will enhance manufacturing firms' performance.
This paper examines the financial determinants of private investment in Ghana using annual time s... more This paper examines the financial determinants of private investment in Ghana using annual time series data from 1970 to 2010. Based on the autoregressive distributed lag (ARDL) bounds testing procedure to cointegration, the paper finds existence of cointegration among the variables. The empirical results support the view that private investment declines in both the short run and long run if the real interest rate is high and investors face severe financing constraints when credit is made scarce to the sector. Recommended were policies that would eliminate the financing constraints to make credit easily accessible to private investors.