kwaku ohene-asare | University Of Ghana, Accra,Legon (original) (raw)

Papers by kwaku ohene-asare

International Journal of Banking, Accounting and Finance, 2012

This paper expands the banking efficiency literature by developing a banking intermediation model... more This paper expands the banking efficiency literature by developing a banking intermediation model that captures both profit-maximising and corporate social responsibilities (CSRs) of banks. Using a dataset of 21 banks for each year 2006 to 2008, we evaluate the relative efficiency of Ghanaian banks using data envelopment analysis (DEA) thus contributing to the scanty research on African banks. We observe a significant difference between the DEA model that includes CSR and the other without CSR, an indication that the inclusion of CSR may be important for bank efficiency assessment. As a further analysis, we use a second stage OLS regression which confirms a positive relationship between CSR and profitability and efficiency indicators. The findings suggest that considering CSR in efficiency assessment of banks is not only important on conceptual grounds, but also indicates that banks that are socially responsible may have economic advantages.

Geneva Papers on Risk and Insurance-issues and Practice, Nov 2, 2018

Previous insurance efficiency studies have focused on cost efficiency or static and dynamic techn... more Previous insurance efficiency studies have focused on cost efficiency or static and dynamic technical productivity and therefore ignored dynamic cost productivity. Previous studies have also failed to consider economies of scale at the firm level. This study employs a panel data of insurers to assess the dynamic cost productivity growth in Ghana from 2005 to 2014. We also explore the determinants of cost productivity growth in the Ghanaian insurance industry. We find that the introduction of the Insurance Act of 2006 saw some large cost productivity growths; however, since 2012 the industry has been facing some marginal cost productivity decline. The cost improving policies in the Act that encouraged cost efficiency must be revisited by regulators, as it seems that the industry is going back to the preregulation cost environment. Additionally, not many insurers have been operating at the optimal production scale over the period.

Geneva Papers on Risk and Insurance-issues and Practice, Nov 2, 2018

Previous insurance efficiency studies have focused on cost efficiency or static and dynamic techn... more Previous insurance efficiency studies have focused on cost efficiency or static and dynamic technical productivity and therefore ignored dynamic cost productivity. Previous studies have also failed to consider economies of scale at the firm level. This study employs a panel data of insurers to assess the dynamic cost productivity growth in Ghana from 2005 to 2014. We also explore the determinants of cost productivity growth in the Ghanaian insurance industry. We find that the introduction of the Insurance Act of 2006 saw some large cost productivity growths; however, since 2012 the industry has been facing some marginal cost productivity decline. The cost improving policies in the Act that encouraged cost efficiency must be revisited by regulators, as it seems that the industry is going back to the preregulation cost environment. Additionally, not many insurers have been operating at the optimal production scale over the period.

African Journal of Economic and Management Studies, Jun 13, 2016

Purpose – The purpose of this paper is to examine the relationship between competition and effici... more Purpose – The purpose of this paper is to examine the relationship between competition and efficiency in the Ghanaian banking industry. Design/methodology/approach – Data on 26 banks from 2004 to 2011 is used to estimate technical and cost-efficiency scores by the data envelopment analysis while the Boone indicator is employed to proxy for competition. Controlling for bank size, lending, income diversification, tangibility, leverage and profitability, ordinary least squares, instrumental variables and fixed effects estimations are used to estimate the panel regression model. The authors also apply the growth convergence theory to examine the existence of efficiency convergence. Findings – The results points to improvements in cost efficiency (CE) and competition within the banking industry. From the empirical estimations, the findings suggest that competition exerts a positive influence on CE. The authors also find evidence of convergence in both technical and CE. Research limitations/implications – The study recommends that efforts at improving competitiveness of the banking industry will translate into lower interest rate spread through improved CE. This will ultimately improve access to bank credit and impact positively on economic growth. Future studies could also examine productivity changes and scale economies in the banking industry. Originality/value – To the authors best knowledge, this is the first study to apply the Boone (2001) indicator in assessing the competitiveness of the Ghanaian banking industry. This is also the first study to examine efficiency convergence within the banking industry in Ghana.

International Journal of Energy Sector Management, Sep 3, 2018

PurposeThe purpose of this study is to compare the production efficiencies and frontiers differen... more PurposeThe purpose of this study is to compare the production efficiencies and frontiers differences of oil-producing countries (OPCs) in four inter-governmental organizations (IGOs) in the international petroleum industry with the aim of providing such countries understanding of group characteristics that help maximize their supply interests.Design/methodology/approachThe empirical analysis is based on 14 years of panel data covering the period from 2000 to 2013. In all 46 unique countries who are members of four IGOs relevant to the international petroleum industry are examined on individual and group bases. The authors use both metafrontier analysis and global frontier difference in examining the group average and group frontiers, respectively.FindingsGroups with high inter and intra-group collaborations which ensure exchange of information, organizational learning and innovation tend to do better than groups with even higher hydro-carbon endowment. Additionally, hydro-carbon resource endowment may not be the solution to group inefficiency without higher endowment in human capital, economic stability, technology and infrastructure.Practical implicationsChoice of inter-governmental organizational membership should be based on the level of inter- and intra-group collaborations, human capital endowment among others and not mere historic links or even resource endowment.Originality/valueThis is among the few studies to compare and rank IGOs. Specifically, it is among the first studies to analyze the petroleum production efficiencies of IGOs involved in the international petroleum industry. This study assesses the performance differences among OPCs with the aim of identifying for OPCs the characteristics of inter-governmental groups that are beneficial to efficiency in upstream petroleum activities.

Journal of International Development, May 15, 2018

Credit unions are set up to provide financial services, especially loans to members in a cooperat... more Credit unions are set up to provide financial services, especially loans to members in a cooperative setting. The increasing competition from banking and non-banking financial institutions implies credit unions must provide financial products and services with a clear understanding of factors that interact in this competitive industry. This paper evaluates the discretional and nondiscretional factors that tend to influence loans credit unions grant their members. From fixed effect model estimate, discretional factors such as size, profitability, management quality and solvency positively associate with credit union loan business whiles loan loss, net worth, non-loan income and non-loan activities associate negatively. Contractionary monetary policy creates an increase in loan demand in the credit union. Credit union managers should monitor developments taking place in the loanable funds market as increasing overhead cost of banks may imply a possible increase in loan demand leading to diseconomies of scale.

Managerial Finance, Oct 31, 2018

Emerald is a global publisher linking research and practice to the benefit of society. The compan... more Emerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services. Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation.

International Journal of Managerial Finance, Jun 4, 2018

Purpose-The purpose of this paper is to reexamine the weak form efficiency of five African stock ... more Purpose-The purpose of this paper is to reexamine the weak form efficiency of five African stock markets (South Africa, Nigeria, Egypt, Ghana and Mauritius) using various tests to assess the impact of non-linearity effect and thin trading which are prevalent in African markets on market efficiency. Design/methodology/approach-The weekly returns of S&P/IFC return indices for five African countries over the period 2000-2013 were obtained from DataStream and analyzed. The study adopted the newly developed Non-Linear Fourier unit root test advanced by Enders and Lee (2004, 2009) which allows for an unknown number of structural breaks with unknown functional forms and non-linearity in data generating process of stock prices series to test the Random Walk Hypothesis (RWH) for the five markets, and an augment regression model. Findings-In light of the empirical evidence the author(s) using Non-linear Fourier Unit Root Test only fail to reject the RWH for South Africa, Nigeria and Egypt leading to the conclusion that these markets follow the RWH and weak-form efficient whilst Ghana and Mauritius are weak-form inefficient. Besides, evaluating non-linear models without adjusting for thin trading effect shows that, South Africa and Ghana markets are weak-form efficient while Nigeria, Egypt and Mauritius are not. However, after accounting for thin trading effect, the author(s) find that South Africa and Egypt markets follow the RWH. The findings imply that market efficiency results depend on the methodology used. Originality/value-This paper provides further evidence on stock market efficiency in emerging markets. The finding suggests that thin trading and non-linearity effect influences markets efficiency tests in African stock markets. Thus, recent structural adjustment and liberalization policies have not enhanced stock market operations in Africa. This paper therefore has implications for policy makers and international investors.

Energy Efficiency, Jul 7, 2020

This paper presents an energy efficiency assessment of 46 African countries and analyzes possible... more This paper presents an energy efficiency assessment of 46 African countries and analyzes possible bidirectional relationship between energy efficiency and economic development within a three-stage framework. In the first stage, energy efficiency is measured within a total factor framework using the slack-based measure with undesirable output and sub-regional comparisons are done. The second stage assesses the determinants of energy efficiency in Africa by way of a bootstrapped truncated regression. The third stage tests the reverse causal relationship between energy efficiency and economic development using 2-stage least squares. The results showed African countries to be on average, 56% energy efficient within the study period. Other African sub-regions could adopt the energy efficiency policies of North Africa as benchmark to improve energy efficiency. Economic development and technological progress are found to have significant positive effects on energy efficiency of African countries, while higher energy prices lead to higher inefficiency. Also, a bi-causal relationship is found to exist between total factor energy efficiency and economic development, giving support to the concept of sustainable development and confirming the International Energy Agency's assertion on the positive macroeconomic impacts of energy efficiency. African countries are therefore, encouraged to invest in energy efficiency technologies and policies to drive sustainable economic development.

Energy Economics, Oct 1, 2017

Although state involvement in market systems often leads to inefficiency, this influence in the o... more Although state involvement in market systems often leads to inefficiency, this influence in the oil industry is not dwindling due to strong growth of some state oil companies. Based on this background, there are concerns about how state firms can continue to stay relevant in the international oil industry by offsetting inefficiencies due to state control. This study assesses the effects of multinational operations on the performance of oil firms. This is achieved by comparing productive and scale efficiencies of state and private oil companies as well as state multinationals and private multinationals. A dataset of 50 firms each year from 2001 to 2010 reveals that although multinational operation is important in reducing productive inefficiencies of state firms, it does not mitigate scale inefficiencies of state-owned firms. State firms should therefore make multinational operations a key policy direction since this will provide a transformative agenda towards equally competing with their private counterparts. However, better efforts need to be paid in reducing scale inefficiencies that are pervasive among stateowned oil firms. Providing better controls on firm size will provide better drive towards future efficient production levels.

Managerial and Decision Economics, Mar 21, 2021

This paper investigates income diversification in credit unions in Ghana. We make use of the rand... more This paper investigates income diversification in credit unions in Ghana. We make use of the random effect, Hausman–Taylor, and fractional regression to assess income diversification. We find empirical support that there exist differences between workplace credit union income diversification and other types of credit union. We also find that within nonfinancial income, size, liquidity, loan portfolio, net worth, and economic growth are important. For within liquid financial investment diversification, size, liquidity, resource usage, age, net interest margin, bank concentration, inflation, and economic growth matter. We recommend that with excess reserves, credit unions should pursue liquid financial investment.

Journal of African Business, Jun 12, 2018

Sub-Saharan Africa consumes far less energy per capita than world energy use per capita, yet ener... more Sub-Saharan Africa consumes far less energy per capita than world energy use per capita, yet energy efficiency is far lower in Africa. The Economic Community of West African States (ECOWAS) has been active in developing an energy efficiency policy aiming to improve efficiency levels in the region to be comparable to world levels. However, benchmarks used for the policy are based on traditional efficiency and intensity ratios. We examine the energy efficiency and energy productivity changes of ECOWAS members using nonparametric non-radial efficiency and dynamic productivity assessment techniques that take into consideration undesirable outputs. We find differences in the nature and levels of energy efficiency and sources of inefficiency among member states. We also observe that the major source of energy productivity growth in the region mainly relates to technical changes outside direct state control. There is a need for institutionalization of energy efficiency in the region by considering country-specific policies.

International Journal of Banking, Accounting and Finance, 2012

This paper expands the banking efficiency literature by developing a banking intermediation model... more This paper expands the banking efficiency literature by developing a banking intermediation model that captures both profit-maximising and corporate social responsibilities (CSRs) of banks. Using a dataset of 21 banks for each year 2006 to 2008, we evaluate the relative efficiency of Ghanaian banks using data envelopment analysis (DEA) thus contributing to the scanty research on African banks. We observe a significant difference between the DEA model that includes CSR and the other without CSR, an indication that the inclusion of CSR may be important for bank efficiency assessment. As a further analysis, we use a second stage OLS regression which confirms a positive relationship between CSR and profitability and efficiency indicators. The findings suggest that considering CSR in efficiency assessment of banks is not only important on conceptual grounds, but also indicates that banks that are socially responsible may have economic advantages.

Geneva Papers on Risk and Insurance-issues and Practice, Nov 2, 2018

Previous insurance efficiency studies have focused on cost efficiency or static and dynamic techn... more Previous insurance efficiency studies have focused on cost efficiency or static and dynamic technical productivity and therefore ignored dynamic cost productivity. Previous studies have also failed to consider economies of scale at the firm level. This study employs a panel data of insurers to assess the dynamic cost productivity growth in Ghana from 2005 to 2014. We also explore the determinants of cost productivity growth in the Ghanaian insurance industry. We find that the introduction of the Insurance Act of 2006 saw some large cost productivity growths; however, since 2012 the industry has been facing some marginal cost productivity decline. The cost improving policies in the Act that encouraged cost efficiency must be revisited by regulators, as it seems that the industry is going back to the preregulation cost environment. Additionally, not many insurers have been operating at the optimal production scale over the period.

Geneva Papers on Risk and Insurance-issues and Practice, Nov 2, 2018

Previous insurance efficiency studies have focused on cost efficiency or static and dynamic techn... more Previous insurance efficiency studies have focused on cost efficiency or static and dynamic technical productivity and therefore ignored dynamic cost productivity. Previous studies have also failed to consider economies of scale at the firm level. This study employs a panel data of insurers to assess the dynamic cost productivity growth in Ghana from 2005 to 2014. We also explore the determinants of cost productivity growth in the Ghanaian insurance industry. We find that the introduction of the Insurance Act of 2006 saw some large cost productivity growths; however, since 2012 the industry has been facing some marginal cost productivity decline. The cost improving policies in the Act that encouraged cost efficiency must be revisited by regulators, as it seems that the industry is going back to the preregulation cost environment. Additionally, not many insurers have been operating at the optimal production scale over the period.

African Journal of Economic and Management Studies, Jun 13, 2016

Purpose – The purpose of this paper is to examine the relationship between competition and effici... more Purpose – The purpose of this paper is to examine the relationship between competition and efficiency in the Ghanaian banking industry. Design/methodology/approach – Data on 26 banks from 2004 to 2011 is used to estimate technical and cost-efficiency scores by the data envelopment analysis while the Boone indicator is employed to proxy for competition. Controlling for bank size, lending, income diversification, tangibility, leverage and profitability, ordinary least squares, instrumental variables and fixed effects estimations are used to estimate the panel regression model. The authors also apply the growth convergence theory to examine the existence of efficiency convergence. Findings – The results points to improvements in cost efficiency (CE) and competition within the banking industry. From the empirical estimations, the findings suggest that competition exerts a positive influence on CE. The authors also find evidence of convergence in both technical and CE. Research limitations/implications – The study recommends that efforts at improving competitiveness of the banking industry will translate into lower interest rate spread through improved CE. This will ultimately improve access to bank credit and impact positively on economic growth. Future studies could also examine productivity changes and scale economies in the banking industry. Originality/value – To the authors best knowledge, this is the first study to apply the Boone (2001) indicator in assessing the competitiveness of the Ghanaian banking industry. This is also the first study to examine efficiency convergence within the banking industry in Ghana.

International Journal of Energy Sector Management, Sep 3, 2018

PurposeThe purpose of this study is to compare the production efficiencies and frontiers differen... more PurposeThe purpose of this study is to compare the production efficiencies and frontiers differences of oil-producing countries (OPCs) in four inter-governmental organizations (IGOs) in the international petroleum industry with the aim of providing such countries understanding of group characteristics that help maximize their supply interests.Design/methodology/approachThe empirical analysis is based on 14 years of panel data covering the period from 2000 to 2013. In all 46 unique countries who are members of four IGOs relevant to the international petroleum industry are examined on individual and group bases. The authors use both metafrontier analysis and global frontier difference in examining the group average and group frontiers, respectively.FindingsGroups with high inter and intra-group collaborations which ensure exchange of information, organizational learning and innovation tend to do better than groups with even higher hydro-carbon endowment. Additionally, hydro-carbon resource endowment may not be the solution to group inefficiency without higher endowment in human capital, economic stability, technology and infrastructure.Practical implicationsChoice of inter-governmental organizational membership should be based on the level of inter- and intra-group collaborations, human capital endowment among others and not mere historic links or even resource endowment.Originality/valueThis is among the few studies to compare and rank IGOs. Specifically, it is among the first studies to analyze the petroleum production efficiencies of IGOs involved in the international petroleum industry. This study assesses the performance differences among OPCs with the aim of identifying for OPCs the characteristics of inter-governmental groups that are beneficial to efficiency in upstream petroleum activities.

Journal of International Development, May 15, 2018

Credit unions are set up to provide financial services, especially loans to members in a cooperat... more Credit unions are set up to provide financial services, especially loans to members in a cooperative setting. The increasing competition from banking and non-banking financial institutions implies credit unions must provide financial products and services with a clear understanding of factors that interact in this competitive industry. This paper evaluates the discretional and nondiscretional factors that tend to influence loans credit unions grant their members. From fixed effect model estimate, discretional factors such as size, profitability, management quality and solvency positively associate with credit union loan business whiles loan loss, net worth, non-loan income and non-loan activities associate negatively. Contractionary monetary policy creates an increase in loan demand in the credit union. Credit union managers should monitor developments taking place in the loanable funds market as increasing overhead cost of banks may imply a possible increase in loan demand leading to diseconomies of scale.

Managerial Finance, Oct 31, 2018

Emerald is a global publisher linking research and practice to the benefit of society. The compan... more Emerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services. Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation.

International Journal of Managerial Finance, Jun 4, 2018

Purpose-The purpose of this paper is to reexamine the weak form efficiency of five African stock ... more Purpose-The purpose of this paper is to reexamine the weak form efficiency of five African stock markets (South Africa, Nigeria, Egypt, Ghana and Mauritius) using various tests to assess the impact of non-linearity effect and thin trading which are prevalent in African markets on market efficiency. Design/methodology/approach-The weekly returns of S&P/IFC return indices for five African countries over the period 2000-2013 were obtained from DataStream and analyzed. The study adopted the newly developed Non-Linear Fourier unit root test advanced by Enders and Lee (2004, 2009) which allows for an unknown number of structural breaks with unknown functional forms and non-linearity in data generating process of stock prices series to test the Random Walk Hypothesis (RWH) for the five markets, and an augment regression model. Findings-In light of the empirical evidence the author(s) using Non-linear Fourier Unit Root Test only fail to reject the RWH for South Africa, Nigeria and Egypt leading to the conclusion that these markets follow the RWH and weak-form efficient whilst Ghana and Mauritius are weak-form inefficient. Besides, evaluating non-linear models without adjusting for thin trading effect shows that, South Africa and Ghana markets are weak-form efficient while Nigeria, Egypt and Mauritius are not. However, after accounting for thin trading effect, the author(s) find that South Africa and Egypt markets follow the RWH. The findings imply that market efficiency results depend on the methodology used. Originality/value-This paper provides further evidence on stock market efficiency in emerging markets. The finding suggests that thin trading and non-linearity effect influences markets efficiency tests in African stock markets. Thus, recent structural adjustment and liberalization policies have not enhanced stock market operations in Africa. This paper therefore has implications for policy makers and international investors.

Energy Efficiency, Jul 7, 2020

This paper presents an energy efficiency assessment of 46 African countries and analyzes possible... more This paper presents an energy efficiency assessment of 46 African countries and analyzes possible bidirectional relationship between energy efficiency and economic development within a three-stage framework. In the first stage, energy efficiency is measured within a total factor framework using the slack-based measure with undesirable output and sub-regional comparisons are done. The second stage assesses the determinants of energy efficiency in Africa by way of a bootstrapped truncated regression. The third stage tests the reverse causal relationship between energy efficiency and economic development using 2-stage least squares. The results showed African countries to be on average, 56% energy efficient within the study period. Other African sub-regions could adopt the energy efficiency policies of North Africa as benchmark to improve energy efficiency. Economic development and technological progress are found to have significant positive effects on energy efficiency of African countries, while higher energy prices lead to higher inefficiency. Also, a bi-causal relationship is found to exist between total factor energy efficiency and economic development, giving support to the concept of sustainable development and confirming the International Energy Agency's assertion on the positive macroeconomic impacts of energy efficiency. African countries are therefore, encouraged to invest in energy efficiency technologies and policies to drive sustainable economic development.

Energy Economics, Oct 1, 2017

Although state involvement in market systems often leads to inefficiency, this influence in the o... more Although state involvement in market systems often leads to inefficiency, this influence in the oil industry is not dwindling due to strong growth of some state oil companies. Based on this background, there are concerns about how state firms can continue to stay relevant in the international oil industry by offsetting inefficiencies due to state control. This study assesses the effects of multinational operations on the performance of oil firms. This is achieved by comparing productive and scale efficiencies of state and private oil companies as well as state multinationals and private multinationals. A dataset of 50 firms each year from 2001 to 2010 reveals that although multinational operation is important in reducing productive inefficiencies of state firms, it does not mitigate scale inefficiencies of state-owned firms. State firms should therefore make multinational operations a key policy direction since this will provide a transformative agenda towards equally competing with their private counterparts. However, better efforts need to be paid in reducing scale inefficiencies that are pervasive among stateowned oil firms. Providing better controls on firm size will provide better drive towards future efficient production levels.

Managerial and Decision Economics, Mar 21, 2021

This paper investigates income diversification in credit unions in Ghana. We make use of the rand... more This paper investigates income diversification in credit unions in Ghana. We make use of the random effect, Hausman–Taylor, and fractional regression to assess income diversification. We find empirical support that there exist differences between workplace credit union income diversification and other types of credit union. We also find that within nonfinancial income, size, liquidity, loan portfolio, net worth, and economic growth are important. For within liquid financial investment diversification, size, liquidity, resource usage, age, net interest margin, bank concentration, inflation, and economic growth matter. We recommend that with excess reserves, credit unions should pursue liquid financial investment.

Journal of African Business, Jun 12, 2018

Sub-Saharan Africa consumes far less energy per capita than world energy use per capita, yet ener... more Sub-Saharan Africa consumes far less energy per capita than world energy use per capita, yet energy efficiency is far lower in Africa. The Economic Community of West African States (ECOWAS) has been active in developing an energy efficiency policy aiming to improve efficiency levels in the region to be comparable to world levels. However, benchmarks used for the policy are based on traditional efficiency and intensity ratios. We examine the energy efficiency and energy productivity changes of ECOWAS members using nonparametric non-radial efficiency and dynamic productivity assessment techniques that take into consideration undesirable outputs. We find differences in the nature and levels of energy efficiency and sources of inefficiency among member states. We also observe that the major source of energy productivity growth in the region mainly relates to technical changes outside direct state control. There is a need for institutionalization of energy efficiency in the region by considering country-specific policies.