david awadzie - Academia.edu (original) (raw)
Papers by david awadzie
International Journal of Business, Management and Economics, Nov 7, 2023
This study aimed to examine the impact of capital structure on bank performance using data from n... more This study aimed to examine the impact of capital structure on bank performance using data from nine listed banks on the Ghana Stock Exchange. The study utilised secondary panel data extracted from the published financial statements of these banks. Bank performance was measured using return on assets and return on equity as proxies, while the ratio of total debt to total assets served as the independent variable. Additionally, firms' age, size, and liquidity were control variables. The random effect technique was used for analysis, employing Ordinary Least Squares (OLS) and Autoregressive methods. The results indicated a positive and significant relationship between total debt to total assets, return on assets and equity. Furthermore, firms' age positively and significantly impacted the return on assets and return on equity in both models. Interestingly, the study found a negative effect of firms' liquidity on return on assets in model one, while the size of the firms had no impact on bank performance. Policymakers can encourage financial institutions to provide accessible and affordable lending options to businesses, enabling them to leverage debt effectively. This can be particularly beneficial for small and medium-sized enterprises (SMEs) that often face challenges accessing capital.
International Journal of Business, Management and Economics
The paper aimed to examine the moderating impact risk attitude has on the link between financial ... more The paper aimed to examine the moderating impact risk attitude has on the link between financial literacy and access to funding for SMEs. Respondents included SMEs in Accra via standardized questionnaires. 396 accurate responses were analyzed utilizing PLS-SEM. Findings showed an important beneficial correlation between knowledge of finances and credit accessibility. The relationship between risk-taking behavior and financial access also proved significant. Additionally, the study discovered that the connection between financial competence and financial access is significantly moderated by risk-taking tendency. The results support the knowledge base view theory, according to which financial literacy is a unique strategic asset that firms can exploit to gain an advantage over rivals. Additionally, it was established that risk-averse owners/managers are more likely to miss out on possibilities to build wealth, which opens up access to credit or even poses the willpower to access debt ...
Cogent Business & Management
Pressacademia
Purpose – Financial literacy has become an important area of research in recent years. Its signif... more Purpose – Financial literacy has become an important area of research in recent years. Its significance in making wise financial choices has also been documented in recent studies. In developing economies, business sustainability is a major issue as has been identified in many prior studies. Most SMEs are unable to survive 3 years after establishment. Prior researchers have mostly attributed this to a lack of access to finance. Recently, it has been discovered that financial literacy tends to assist SMEs with the needed skills and knowledge such as understanding the various sources of finance and analyzing different financial choices accurately, in order to be able to make the right financial choices. This study hence examines the impact of financial literacy on risk propensity mediated by access to finance. Methodology – Data for the study was collected from SME owners/managers through structured questionnaires. The questionnaires were administered to 432 SME owners/managers. Descr...
Journal of Business, Economics and Finance, Mar 30, 2022
Purpose-Ghana's debt stock has been a subject of debate for a very long time. This study is to es... more Purpose-Ghana's debt stock has been a subject of debate for a very long time. This study is to estimate the debt threshold level above which it will be detrimental to economic growth. Methodology-The study used a threshold autoregressive model introduced by Tong (1978) and Hansen (1996). The study employed timeseries data for thirty-one years from 1990 to 2020. Economic growth was measured by the Gross Domestic Product Per Capita (GDPPC). The study sought to answer the following question: What is Ghana's public debt threshold value? Findings-The data reveal that Ghana has a single public debt threshold value (i.e., structural breakpoint), implying that public debt and growth are not linear. The derived threshold regression model indicates a public debt threshold of 57.09 per cent, above which the growth rate of GDPPC is considerably retarded. In addition, below the threshold level, there is a statistically significant positive association between public debt and growth. Conclusion-This article concludes that low public debt is growth-enhancing, whereas public debt above the threshold value is detrimental to economic growth. Therefore, policymakers should focus on monetary policies that aid in maintaining public debt at a low level. However, this study makes the following recommendations to help sustain Ghana's expanding state debt: To begin with, the government should halt the accumulation of external debt, which incurs additional costs during periods of currency depreciation. Second, policymakers with decision-making authority should exert severe restraint on the growing cedi. Thirdly, the government should eliminate all wasteful spending. Finally, the government of Ghana should allocate its external debt appropriately for economic investment and maintain a strong debt management policy.
Journal of Business, Economics and Finance, Mar 30, 2022
Purpose-This study examined the relationship between sustainability reporting and bank performanc... more Purpose-This study examined the relationship between sustainability reporting and bank performance in Africa. Unlike previous studies that solely dwelled on accounting measures of performance, this study adopted both accounting (i.e., return on assets) and market-based measures of firm performance (i.e., Tobin's Q). Methodology-The study relied on secondary data gathered from the audited financial statements of listed banks in Africa over ten years from 2010 to 2020. Notably, the financial statements of 20 listed banks (drawn from Ghana, Nigeria, and South Africa) were subjected to quantitative content analysis to quantify the extent of sustainability content. It was guided by the sustainability reporting framework developed by the global reporting initiative. The content analysis aims to identify and classify the extent to which firms report on Economic, governance, social, and environmental dimensions of sustainability. Besides, the financial statement figures aided the computation of a performance measure (return on assets and Tobin's Q) for the banks. Concerning data analysis, the study utilized a panel fixed effect regression model to estimate the relationship between sustainability reporting and firm performance. Findings-The results suggest that economic, social, and governance reporting of sustainability content (in the financial statement) has a significant positive association with Tobin's Q and Return on Assets (ROA). Furthermore, the study's findings suggest that banks ' reportage of environmental sustainability content has a significant positive effect on ROA. However, it has no significant effect on Tobin's Q. Conclusion-Generally, the study concludes that increased sustainability reporting enhances bank performance in the long term. Among others, the study recommends that policymakers develop a sustainability framework specific to the banking industry's needs.
This paper examined the impact of credit risk on the performance of banks in Ghana using unbalanc... more This paper examined the impact of credit risk on the performance of banks in Ghana using unbalanced panel data of 16 banks over the period 1990 to 2018. OLS method of estimation was adopted on a multiple regression equation. The study employed a causal design. The results indicate a significant positive relationship between net interest income and return on assets. Even though there is a negative relationship between return on assets and loan loss provision on one hand and Interest Rate Spread on the other they are insignificant. Again, the relationship between loan loss provision and operating expense/income ratio is negative and significant. However, there is no significant relationship between operating expense/income ratio and net interest income on one hand and interest rate spread on the other. Banks should therefore improve on their interest income generation and minimize their loan loss provisions for
This study is to investigate the relationship between debt and financial performance. The study e... more This study is to investigate the relationship between debt and financial performance. The study employed the Panel Threshold Regression model introduced by Hansen (1999). The study used panel data covering a period of fifteen-years from 2005 to 2019 for twenty-five listed companies on the Ghana Stock Exchange. Financial performance was measured by return on assets. The study finds the threshold level of debt at 43.85%. The result of the study, however, indicates that the debt threshold level is positive in both low and high debt regimes but the degree of debt impact on both regimes is not comparable. It has also indicated that debt has a significant potential impact on financial performance in low debt regime and a slightly lower impact in high debt regime. The findings suggest that more debts have been contracted by the companies in low debt regime than high debt regime. The results of explanatory variables used in the study such, as inflation rates reveal an insignificant negative...
The securities exchange is a financial organization that encourages investment in the stock of or... more The securities exchange is a financial organization that encourages investment in the stock of organizations recorded the development and advancement of the economy of a country. The purpose of the study is to investigate the effect of inflation on the stock market performance using data on the Ghana Stock Exchange. The study focused on the impact of inflation rate fluctuation on the stock market performance of the Ghana Stock Exchange. The study used secondary annual time series data for the thirty years from 1990 to 2018. Ordinary least squares (OLS) regression analysis was employed to evaluate the relationship between inflation rate and capital market measures such as market capitalization, the total value of shares, the market volume of shares and market turnover ratio. The result shows the following impact of inflation rate on market performance measures respectively; 24.57%,18.97%,13.34% and 1.71%. The result also revealed a negative relationship between inflation and market p...
Journal of Business and Economic Development, 2020
The purpose of this study is to investigate the threshold effect of inflation on capital market p... more The purpose of this study is to investigate the threshold effect of inflation on capital market performance. The study employed a Threshold Autoregressive model introduced by Tong (1978) and Hansen (1996). The study used secondary quarter-time series data for thirty-years from 1990 to 2019. The capital market performance was measured by the value of shares traded; market turnover; market capitalization and all-shares index. However, the results revealed the following estimated threshold level of inflation for each performance indicator: 3.77%; 4.12%; 4.15%, and 4.22% respectively. In all, the threshold level of inflation estimated was between 3 to 4%. The findings suggest that low inflation is performance-enhancing. Besides, inflation above the threshold level is detrimental to the capital market performance. The study further concluded that the exchange rate equally affects the performance of the capital market. The findings of this investigation might be helpful to the government of Ghana and policymakers as they settle on an inflation target to adopt to avoid the detrimental effects of high inflation while obtaining the growth benefits of low inflation.
Journal of Business, Economics and Finance, Mar 30, 2022
Purpose-The study investigates the effect of financial deepening on stock market performance in s... more Purpose-The study investigates the effect of financial deepening on stock market performance in selected Sub-Saharan African countries by determining the relationship that exist between financial deepening and stock market performance. Expansion in the financial services to reach out to the underbanked or unbanked in our society enables these individuals to assess banking services, thereby boosting economic activities. Methodology-The study considers four selected countries in Sub-Saharan African over the period 2001 to 2019. Multiple regression analysis techniques were used with Seemingly Unrelated Regression (SUR) to analyse the data. SUR used in this analysis provides the lowest standard errors of the estimated parameters. Findings-Ordinary Least Square (OLS) gives consistent results. However, it is not as efficient as the SUR method, which amounts to feasible generalised least squares with a specific form of the variance matrix. It solves the problem of endogeneity. The study conducted Augmented Dicky Fuller (ADF) test, Hausman test, and Bruce Pagan test to avoid any challenges associated with data normality. Conclusion-The research finds out that broad money supply, a proxy for financial deepening, positively and statistically significantly impacted stock market performance in each of the four countries. It was recommended that all countries involved in this study and others implement policies that seek to enhance financial deepening in increasing broad money supply as a percentage of GDP. The increase in overall money supply allows for investment in productive sectors of the economy.
International Journal of Business Management and Economic Review, 2020
This study is to investigate the relationship between debt and financial performance. The study e... more This study is to investigate the relationship between debt and financial performance. The study employed the Panel Threshold Regression model introduced by Hansen (1999). The study used panel data covering a period of fifteen-years from 2005 to 2019 for twenty-five listed companies on the Ghana Stock Exchange. Financial performance was measured by return on assets. The study finds the threshold level of debt at 43.85%. The result of the study, however, indicates that the debt threshold level is positive in both low and high debt regimes but the degree of debt impact on both regimes is not comparable. It has also indicated that debt has a significant potential impact on financial performance in low debt regime and a slightly lower impact in high debt regime. The findings suggest that more debts have been contracted by the companies in low debt regime than high debt regime. The results of explanatory variables used in the study such, as inflation rates reveal an insignificant negative relationship with financial performance, and foreign exchange rate and interest rates also produce an insignificant negative relationship with financial performance. The findings of this study will help the management of the listed companies on the Ghana Stock Exchange to inform their decision on what percentage of debt should form part of the company's capital structure because the more the value of the debt themore it would impact on the financial performance. However, it would be advisable that management of all the listed companies both local or foreign should keep their debt portfolio below the 43.85% estimated threshold level to improve the performance of the company.
Journal of Business and Economic Development, 2020
The purpose of this study is to investigate the threshold effect of inflation on capital market p... more The purpose of this study is to investigate the threshold effect of inflation on capital market performance. The study employed a Threshold Autoregressive model introduced by Tong (1978) and Hansen (1996). The study used secondary quarter-time series data for thirty-years from 1990 to 2019. The capital market performance was measured by the value of shares traded; market turnover; market capitalization and all-shares index. However, the results revealed the following estimated threshold level of inflation for each performance indicator: 3.77%; 4.12%; 4.15%, and 4.22% respectively. In all, the threshold level of inflation estimated was between 3 to 4%. The findings suggest that low inflation is performance-enhancing. Besides, inflation above the threshold level is detrimental to the capital market performance. The study further concluded that the exchange rate equally affects the performance of the capital market. The findings of this investigation might be helpful to the government of Ghana and policymakers as they settle on an inflation target to adopt to avoid the detrimental effects of high inflation while obtaining the growth benefits of low inflation.
Global Journal of Management and Business Research: C Finance, 2021
This paper examined the impact of credit risk on the performance of banks in Ghana using unbalanc... more This paper examined the impact of credit risk on the performance of banks in Ghana using unbalanced panel data of 16 banks over the period 1990 to 2018. OLS method of estimation was adopted on a multiple regression equation. The study employed a causal design. The results indicate a significant positive relationship between net interest income and return on assets. Even though there is a negative relationship between return on assets and loan loss provision on one hand and Interest Rate Spread on the other they are insignificant. Again, the relationship between loan loss provision and operating expense/income ratio is negative and significant. However, there is no significant relationship between operating expense/income ratio and net interest income on one hand and interest rate spread on the other. Banks should therefore improve on their interest income generation and minimize their loan loss provisions for good performance.
International Journal of Business Management and Economic Review
The stock market is a monetary establishment that advances the development and improvement of the... more The stock market is a monetary establishment that advances the development and improvement of the economy of a country. The purpose of the study is to investigate the effect of Macroeconomic variables on the stock market performance in Ghana. The study focused on the impact of the foreign exchange rate, interest rate and inflation rate fluctuation on the market performance of the Ghana Stock Exchange. The study used secondary quarter-time series data for thirty years from 1990 to 2019. The unit root test was employed utilizing the Augmented Dickey-Fuller (ADF) test to assess the stationarity in the data. The regression analysis was employed to evaluate the influence of the macroeconomy variables on the stock market performance, market capitalization was used to measure stock market performance. The results indicate that inflation and exchange rate have a positive effect on capital market performance, while interest rate exerts a negative impact on capital market performance. It implies that an increase in both the inflation rate and exchange rate would enhance capital market performance while an increase in interest rate would reduce the capital market performance.
Journal of Business Administration Research
Exchange rate plays a vital role in an economy and the purpose of this study is to investigate th... more Exchange rate plays a vital role in an economy and the purpose of this study is to investigate the impact of exchange rate threshold level on the capital market performance. The study employed a Threshold Autoregressive model introduced by Tong (1978) and Hansen (1996). The study used secondary quarter-time series data for thirty-years from 1990 to 2019. The capital market performance was measured by the value of shares traded; market turnover; market capitalization and all-shares index. However, the results revealed the following estimated threshold level of exchange rate for each performance indicator: 7.94%; 25.33%; 25.33% and 7.80% respectively. In all, the threshold level of the exchange rate estimated was 8 and 25 per cent. The findings suggest that low exchange rate is performance-enhancing. In addition, the exchange rate above the threshold level is detrimental to the capital market performance. The findings of this investigation might be helpful to the government of Ghana a...
International Journal of Business, Management and Economics, Nov 7, 2023
This study aimed to examine the impact of capital structure on bank performance using data from n... more This study aimed to examine the impact of capital structure on bank performance using data from nine listed banks on the Ghana Stock Exchange. The study utilised secondary panel data extracted from the published financial statements of these banks. Bank performance was measured using return on assets and return on equity as proxies, while the ratio of total debt to total assets served as the independent variable. Additionally, firms' age, size, and liquidity were control variables. The random effect technique was used for analysis, employing Ordinary Least Squares (OLS) and Autoregressive methods. The results indicated a positive and significant relationship between total debt to total assets, return on assets and equity. Furthermore, firms' age positively and significantly impacted the return on assets and return on equity in both models. Interestingly, the study found a negative effect of firms' liquidity on return on assets in model one, while the size of the firms had no impact on bank performance. Policymakers can encourage financial institutions to provide accessible and affordable lending options to businesses, enabling them to leverage debt effectively. This can be particularly beneficial for small and medium-sized enterprises (SMEs) that often face challenges accessing capital.
International Journal of Business, Management and Economics
The paper aimed to examine the moderating impact risk attitude has on the link between financial ... more The paper aimed to examine the moderating impact risk attitude has on the link between financial literacy and access to funding for SMEs. Respondents included SMEs in Accra via standardized questionnaires. 396 accurate responses were analyzed utilizing PLS-SEM. Findings showed an important beneficial correlation between knowledge of finances and credit accessibility. The relationship between risk-taking behavior and financial access also proved significant. Additionally, the study discovered that the connection between financial competence and financial access is significantly moderated by risk-taking tendency. The results support the knowledge base view theory, according to which financial literacy is a unique strategic asset that firms can exploit to gain an advantage over rivals. Additionally, it was established that risk-averse owners/managers are more likely to miss out on possibilities to build wealth, which opens up access to credit or even poses the willpower to access debt ...
Cogent Business & Management
Pressacademia
Purpose – Financial literacy has become an important area of research in recent years. Its signif... more Purpose – Financial literacy has become an important area of research in recent years. Its significance in making wise financial choices has also been documented in recent studies. In developing economies, business sustainability is a major issue as has been identified in many prior studies. Most SMEs are unable to survive 3 years after establishment. Prior researchers have mostly attributed this to a lack of access to finance. Recently, it has been discovered that financial literacy tends to assist SMEs with the needed skills and knowledge such as understanding the various sources of finance and analyzing different financial choices accurately, in order to be able to make the right financial choices. This study hence examines the impact of financial literacy on risk propensity mediated by access to finance. Methodology – Data for the study was collected from SME owners/managers through structured questionnaires. The questionnaires were administered to 432 SME owners/managers. Descr...
Journal of Business, Economics and Finance, Mar 30, 2022
Purpose-Ghana's debt stock has been a subject of debate for a very long time. This study is to es... more Purpose-Ghana's debt stock has been a subject of debate for a very long time. This study is to estimate the debt threshold level above which it will be detrimental to economic growth. Methodology-The study used a threshold autoregressive model introduced by Tong (1978) and Hansen (1996). The study employed timeseries data for thirty-one years from 1990 to 2020. Economic growth was measured by the Gross Domestic Product Per Capita (GDPPC). The study sought to answer the following question: What is Ghana's public debt threshold value? Findings-The data reveal that Ghana has a single public debt threshold value (i.e., structural breakpoint), implying that public debt and growth are not linear. The derived threshold regression model indicates a public debt threshold of 57.09 per cent, above which the growth rate of GDPPC is considerably retarded. In addition, below the threshold level, there is a statistically significant positive association between public debt and growth. Conclusion-This article concludes that low public debt is growth-enhancing, whereas public debt above the threshold value is detrimental to economic growth. Therefore, policymakers should focus on monetary policies that aid in maintaining public debt at a low level. However, this study makes the following recommendations to help sustain Ghana's expanding state debt: To begin with, the government should halt the accumulation of external debt, which incurs additional costs during periods of currency depreciation. Second, policymakers with decision-making authority should exert severe restraint on the growing cedi. Thirdly, the government should eliminate all wasteful spending. Finally, the government of Ghana should allocate its external debt appropriately for economic investment and maintain a strong debt management policy.
Journal of Business, Economics and Finance, Mar 30, 2022
Purpose-This study examined the relationship between sustainability reporting and bank performanc... more Purpose-This study examined the relationship between sustainability reporting and bank performance in Africa. Unlike previous studies that solely dwelled on accounting measures of performance, this study adopted both accounting (i.e., return on assets) and market-based measures of firm performance (i.e., Tobin's Q). Methodology-The study relied on secondary data gathered from the audited financial statements of listed banks in Africa over ten years from 2010 to 2020. Notably, the financial statements of 20 listed banks (drawn from Ghana, Nigeria, and South Africa) were subjected to quantitative content analysis to quantify the extent of sustainability content. It was guided by the sustainability reporting framework developed by the global reporting initiative. The content analysis aims to identify and classify the extent to which firms report on Economic, governance, social, and environmental dimensions of sustainability. Besides, the financial statement figures aided the computation of a performance measure (return on assets and Tobin's Q) for the banks. Concerning data analysis, the study utilized a panel fixed effect regression model to estimate the relationship between sustainability reporting and firm performance. Findings-The results suggest that economic, social, and governance reporting of sustainability content (in the financial statement) has a significant positive association with Tobin's Q and Return on Assets (ROA). Furthermore, the study's findings suggest that banks ' reportage of environmental sustainability content has a significant positive effect on ROA. However, it has no significant effect on Tobin's Q. Conclusion-Generally, the study concludes that increased sustainability reporting enhances bank performance in the long term. Among others, the study recommends that policymakers develop a sustainability framework specific to the banking industry's needs.
This paper examined the impact of credit risk on the performance of banks in Ghana using unbalanc... more This paper examined the impact of credit risk on the performance of banks in Ghana using unbalanced panel data of 16 banks over the period 1990 to 2018. OLS method of estimation was adopted on a multiple regression equation. The study employed a causal design. The results indicate a significant positive relationship between net interest income and return on assets. Even though there is a negative relationship between return on assets and loan loss provision on one hand and Interest Rate Spread on the other they are insignificant. Again, the relationship between loan loss provision and operating expense/income ratio is negative and significant. However, there is no significant relationship between operating expense/income ratio and net interest income on one hand and interest rate spread on the other. Banks should therefore improve on their interest income generation and minimize their loan loss provisions for
This study is to investigate the relationship between debt and financial performance. The study e... more This study is to investigate the relationship between debt and financial performance. The study employed the Panel Threshold Regression model introduced by Hansen (1999). The study used panel data covering a period of fifteen-years from 2005 to 2019 for twenty-five listed companies on the Ghana Stock Exchange. Financial performance was measured by return on assets. The study finds the threshold level of debt at 43.85%. The result of the study, however, indicates that the debt threshold level is positive in both low and high debt regimes but the degree of debt impact on both regimes is not comparable. It has also indicated that debt has a significant potential impact on financial performance in low debt regime and a slightly lower impact in high debt regime. The findings suggest that more debts have been contracted by the companies in low debt regime than high debt regime. The results of explanatory variables used in the study such, as inflation rates reveal an insignificant negative...
The securities exchange is a financial organization that encourages investment in the stock of or... more The securities exchange is a financial organization that encourages investment in the stock of organizations recorded the development and advancement of the economy of a country. The purpose of the study is to investigate the effect of inflation on the stock market performance using data on the Ghana Stock Exchange. The study focused on the impact of inflation rate fluctuation on the stock market performance of the Ghana Stock Exchange. The study used secondary annual time series data for the thirty years from 1990 to 2018. Ordinary least squares (OLS) regression analysis was employed to evaluate the relationship between inflation rate and capital market measures such as market capitalization, the total value of shares, the market volume of shares and market turnover ratio. The result shows the following impact of inflation rate on market performance measures respectively; 24.57%,18.97%,13.34% and 1.71%. The result also revealed a negative relationship between inflation and market p...
Journal of Business and Economic Development, 2020
The purpose of this study is to investigate the threshold effect of inflation on capital market p... more The purpose of this study is to investigate the threshold effect of inflation on capital market performance. The study employed a Threshold Autoregressive model introduced by Tong (1978) and Hansen (1996). The study used secondary quarter-time series data for thirty-years from 1990 to 2019. The capital market performance was measured by the value of shares traded; market turnover; market capitalization and all-shares index. However, the results revealed the following estimated threshold level of inflation for each performance indicator: 3.77%; 4.12%; 4.15%, and 4.22% respectively. In all, the threshold level of inflation estimated was between 3 to 4%. The findings suggest that low inflation is performance-enhancing. Besides, inflation above the threshold level is detrimental to the capital market performance. The study further concluded that the exchange rate equally affects the performance of the capital market. The findings of this investigation might be helpful to the government of Ghana and policymakers as they settle on an inflation target to adopt to avoid the detrimental effects of high inflation while obtaining the growth benefits of low inflation.
Journal of Business, Economics and Finance, Mar 30, 2022
Purpose-The study investigates the effect of financial deepening on stock market performance in s... more Purpose-The study investigates the effect of financial deepening on stock market performance in selected Sub-Saharan African countries by determining the relationship that exist between financial deepening and stock market performance. Expansion in the financial services to reach out to the underbanked or unbanked in our society enables these individuals to assess banking services, thereby boosting economic activities. Methodology-The study considers four selected countries in Sub-Saharan African over the period 2001 to 2019. Multiple regression analysis techniques were used with Seemingly Unrelated Regression (SUR) to analyse the data. SUR used in this analysis provides the lowest standard errors of the estimated parameters. Findings-Ordinary Least Square (OLS) gives consistent results. However, it is not as efficient as the SUR method, which amounts to feasible generalised least squares with a specific form of the variance matrix. It solves the problem of endogeneity. The study conducted Augmented Dicky Fuller (ADF) test, Hausman test, and Bruce Pagan test to avoid any challenges associated with data normality. Conclusion-The research finds out that broad money supply, a proxy for financial deepening, positively and statistically significantly impacted stock market performance in each of the four countries. It was recommended that all countries involved in this study and others implement policies that seek to enhance financial deepening in increasing broad money supply as a percentage of GDP. The increase in overall money supply allows for investment in productive sectors of the economy.
International Journal of Business Management and Economic Review, 2020
This study is to investigate the relationship between debt and financial performance. The study e... more This study is to investigate the relationship between debt and financial performance. The study employed the Panel Threshold Regression model introduced by Hansen (1999). The study used panel data covering a period of fifteen-years from 2005 to 2019 for twenty-five listed companies on the Ghana Stock Exchange. Financial performance was measured by return on assets. The study finds the threshold level of debt at 43.85%. The result of the study, however, indicates that the debt threshold level is positive in both low and high debt regimes but the degree of debt impact on both regimes is not comparable. It has also indicated that debt has a significant potential impact on financial performance in low debt regime and a slightly lower impact in high debt regime. The findings suggest that more debts have been contracted by the companies in low debt regime than high debt regime. The results of explanatory variables used in the study such, as inflation rates reveal an insignificant negative relationship with financial performance, and foreign exchange rate and interest rates also produce an insignificant negative relationship with financial performance. The findings of this study will help the management of the listed companies on the Ghana Stock Exchange to inform their decision on what percentage of debt should form part of the company's capital structure because the more the value of the debt themore it would impact on the financial performance. However, it would be advisable that management of all the listed companies both local or foreign should keep their debt portfolio below the 43.85% estimated threshold level to improve the performance of the company.
Journal of Business and Economic Development, 2020
The purpose of this study is to investigate the threshold effect of inflation on capital market p... more The purpose of this study is to investigate the threshold effect of inflation on capital market performance. The study employed a Threshold Autoregressive model introduced by Tong (1978) and Hansen (1996). The study used secondary quarter-time series data for thirty-years from 1990 to 2019. The capital market performance was measured by the value of shares traded; market turnover; market capitalization and all-shares index. However, the results revealed the following estimated threshold level of inflation for each performance indicator: 3.77%; 4.12%; 4.15%, and 4.22% respectively. In all, the threshold level of inflation estimated was between 3 to 4%. The findings suggest that low inflation is performance-enhancing. Besides, inflation above the threshold level is detrimental to the capital market performance. The study further concluded that the exchange rate equally affects the performance of the capital market. The findings of this investigation might be helpful to the government of Ghana and policymakers as they settle on an inflation target to adopt to avoid the detrimental effects of high inflation while obtaining the growth benefits of low inflation.
Global Journal of Management and Business Research: C Finance, 2021
This paper examined the impact of credit risk on the performance of banks in Ghana using unbalanc... more This paper examined the impact of credit risk on the performance of banks in Ghana using unbalanced panel data of 16 banks over the period 1990 to 2018. OLS method of estimation was adopted on a multiple regression equation. The study employed a causal design. The results indicate a significant positive relationship between net interest income and return on assets. Even though there is a negative relationship between return on assets and loan loss provision on one hand and Interest Rate Spread on the other they are insignificant. Again, the relationship between loan loss provision and operating expense/income ratio is negative and significant. However, there is no significant relationship between operating expense/income ratio and net interest income on one hand and interest rate spread on the other. Banks should therefore improve on their interest income generation and minimize their loan loss provisions for good performance.
International Journal of Business Management and Economic Review
The stock market is a monetary establishment that advances the development and improvement of the... more The stock market is a monetary establishment that advances the development and improvement of the economy of a country. The purpose of the study is to investigate the effect of Macroeconomic variables on the stock market performance in Ghana. The study focused on the impact of the foreign exchange rate, interest rate and inflation rate fluctuation on the market performance of the Ghana Stock Exchange. The study used secondary quarter-time series data for thirty years from 1990 to 2019. The unit root test was employed utilizing the Augmented Dickey-Fuller (ADF) test to assess the stationarity in the data. The regression analysis was employed to evaluate the influence of the macroeconomy variables on the stock market performance, market capitalization was used to measure stock market performance. The results indicate that inflation and exchange rate have a positive effect on capital market performance, while interest rate exerts a negative impact on capital market performance. It implies that an increase in both the inflation rate and exchange rate would enhance capital market performance while an increase in interest rate would reduce the capital market performance.
Journal of Business Administration Research
Exchange rate plays a vital role in an economy and the purpose of this study is to investigate th... more Exchange rate plays a vital role in an economy and the purpose of this study is to investigate the impact of exchange rate threshold level on the capital market performance. The study employed a Threshold Autoregressive model introduced by Tong (1978) and Hansen (1996). The study used secondary quarter-time series data for thirty-years from 1990 to 2019. The capital market performance was measured by the value of shares traded; market turnover; market capitalization and all-shares index. However, the results revealed the following estimated threshold level of exchange rate for each performance indicator: 7.94%; 25.33%; 25.33% and 7.80% respectively. In all, the threshold level of the exchange rate estimated was 8 and 25 per cent. The findings suggest that low exchange rate is performance-enhancing. In addition, the exchange rate above the threshold level is detrimental to the capital market performance. The findings of this investigation might be helpful to the government of Ghana a...