Showing papers by "Joshua Abor published in 2010"

Issues in SME development in Ghana and South Africa

Abstract: This paper discusses the characteristics of SMEs to economic development, and the constraints to SME development in developing countries with particular reference to Ghana and South Africa. SMEs in Ghana have been noted to provide about 85% of manufacturing employment of Ghana. They are also believed to contribute about 70% to Ghana’s GDP and account for about 92% of businesses in Ghana. In the Republic of South Africa, it is estimated that 91% of the formal business entities are SMEs. They also contribute 52-57% to GDP and provide about 61% to employment .Notwithstanding the recognition of the important roles SMEs play in these countries, their development is largely constrained by the number of factors such as lack of access to appropriate technology; limited access to international markets, the existence of laws, regulations and rules that impede the development of the sector; weak institutional capacity, lack of management skills and training, and most importantly finance. This paper provides some relevant recommendations to policy makers, development agencies, entrepreneurs, and SME mangers to ascertain the appropriate strategy to improve the SME sector in these countries.

Investment opportunities, corporate finance, and dividend payout policy: Evidence from emerging markets

Abstract: Purpose – The purpose of this paper is to investigate the effects of investment opportunities and corporate finance on dividend payout policy.Design/methodology/approach – This issue is tested with a sample of 34 emerging market countries covering a 17‐year period, 1990‐2006. Fixed effects panel model is employed in our estimation.Findings – A significantly negative relationship between investment opportunity set and dividend payout policy is found. There are, however, insignificant effects of the various measures of corporate finance namely, financial leverage, external financing, and debt maturity on dividend payout policy. Profitability and stock market capitalization are also identified as important in influencing dividend payout policy. Profitable firms are more likely to support high dividend payments to shareholders. However, firms in relatively well‐developed markets tend to exhibit low dividend payout policy.Originality/value – The main value of the paper is in respect of the fact that it uses a ...

Foreign direct investment and firm productivity: evidence from firm-level data

Abstract: This study examines the effect of foreign direct investment (FDI) on productivity of firms in Ghana. The paper also investigates the effect of FDI spillovers on domestic firms in Ghana. The results indicate that firms with high proportion of foreign capital are more productive than those with low or no foreign capital. This could be attributed to the fact that firms with more foreign capital injection are in a better position to employ advanced forms of technology, employ managers with better international exposure and skills in modern management techniques, adopt good corporate governance and management practices, and may have better access to credit from the international financial markets. We find no significant effect of spillovers from FDI on the productivity of domestic firms. Spillovers from FDI may not be high enough to warrant any significant effect on the productivity of domestic firms. It is also likely that the absorptive capacity of domestic firms in Ghana is not strong enough to generate positive spillovers from FDI. The findings of this study have relevant implications for economic policy.