Showing papers by "Joshua Abor published in 2013"

Does corporate governance explain dividend policy in Sub‐Saharan Africa?

Abstract: Purpose – This study aims to examine the effect of corporate governance on firms' dividend payout policy in sub‐Saharan Africa. The study also aims to examine how dividend payout influences corporate governance.Design/methodology/approach – Using a sample made up 27 Ghanaian firms, 177 Nigerian firms, 51 Kenyan firms, and 270 South African firms covering the period 1997‐2006, the paper employs a simultaneous panel regression model in its estimation.Findings – The results show that board composition and board size exhibit significantly positive relationship with dividend payout in Kenya and Ghana, respectively. Institutional ownership positively influences dividend payout among South African and Kenyan firms. In the case of Nigeria, all the corporate governance measures show significantly negative effects on dividend payout. The findings clearly suggest that, with respect to South Africa, Kenya and Ghana, good corporate governance structures lead to high‐dividend payout, probably due to easy access to and ...

Risk management in the Ghanaian insurance industry

Abstract: Purpose – The purpose of this paper is to examine the risk management practices of life assurance firms and non‐life insurance firms.Design/methodology/approach – Through a comparative case study methodology, the study assesses the state of risk management in both life assurance companies and non‐life insurance firms to determine whether they exhibit different or similar risk management practices. The results of the survey were also analyzed and compared to the principles of good practices in financial risk management.Findings – The findings of the study revealed some differences and similarities in the risk management practices of life and non‐life insurance firms. Almost all the life companies have stated their risk appetite levels, which enable them to identify which risks to absorb and which ones to transfer. But non‐life insurance firms have not laid down their risk tolerance levels explicitly. The results further revealed that the industry lacks sufficient personnel with the requisite risk managemen...

Demand for financial services by households in Ghana

Abstract: Purpose – The purpose of this paper is to investigate household financial choice and the determinants of financial services in rural and urban households in Ghana.Design/methodology/approach – Data from the Ghana Living Standard Survey 5 (GLSS 5) are used to estimate the participation of a household in a particular financial sector and what determines this choice.Findings – The results from Tobit and conditional logit models account for households' demographic characteristics and their financial decisions. The Tobit estimates show that household size, age, sex, marital status, occupation, income, remittances and shocks determine households' participation in the financial markets. Conditional logit model results suggest that locational characteristics are important in obtaining financial services from particular sectors of the financial market. The results also suggest that when the alternatives of financial services are available, rural households are more likely than urban households to obtain their fina...

Corporate financial policies in emerging markets: the role of financial market development

Abstract: Purpose – The paper aims to study the importance of financial market development and financial structure in explaining the financial policies of firms in emerging market countries. Design/methodology/approach – The paper uses a panel data of 32 countries and the system generalized method of moments approach. Findings – The analysis shows that stock market development is associated with higher use of external finance relative to internal finance, while bond market development is associated with lower use of external finance relative to internal finance. The findings of this study also indicate that stock market development tends to shift the policies of firms towards less debt and more equity, and bond market development is associated with higher debt and less equity in emerging economies. Originality/value – The value of this study is in respect of its contribution to the extant literature on corporate financial policies in emerging market economies.

Banking Sector Developments in Emerging Markets: A Review of Recent Developments in Africa

Abstract: Key to the economic transformation of developing economies is the banking sector developments. The banking sector in Africa has witnessed a steady growth in its core functional areas over the recent decades. This growth has implications on access to finance and stability in the financial system. This study reviews banking sector performance, competition, access to finance and stability in the context of sub-regional and comparator regional analysis with the view to informing and shaping policy directions. The North African economies recorded high levels of financial deepening than the rest of the regions. With the same economic conditions like South Asia, East Asia Pacific and Latin America and Caribbean regions, African’s banking sector depth lags behind these regions. Access to financial institutions is high in Southern African region than the rest of the sub-regions. Again, Africa records very low level of banking sector accessibility compared to its comparator regions. Moreover, the banking system in Africa is characterized by high costs, inefficiency and high margins. The banking system also exhibit high concentration and market power and relative stability than comparator regions. The North African economies exhibit low presence of foreign banks than sub-regional groupings. Keywords: Banking Sector, Efficiency, Performance, Stability, Financial Accessibility, Africa