ghanaopendata/ghanaian-research-english huggingface dataset:
Financial Development and Economic Growth in Ghana: Is There a Casual Link?

This study seeks to find out whether financial development in Ghana conforms to either the supply-leading, demand-following or Patrick’s Stages of development hypothesis. A bivariate VAR model is estimated in four scenarios, after which Granger-causality test, Impulse Response Function and Variance Decomposition analyses were conducted for each respective scenario of the VAR. Whereas there is some evidence in support of demand following hypothesis, when growth of broad money to GDP ratio is used as a measure of financial development, there is no significant evidence to support either the supply-leading or demand-following hypothesis when growth in domestic credit ratio are used as proxies for financial development. Also, in all the four Scenarios, there is no statistical evidence to support Patrick’s Stages of development hypothesis in Ghana.

Source: UG
Financial Development and the Social Cost of Financial Intermediation in Africa

This article investigates the effect of financial development on the social costs of financial intermediation across a large number of banks in Africa. The study distinguishes between countries that are financially developed and those that are not financially developed to examine the impact of financial development on the social costs of financial intermediation. A sample of 260 banks from 29 countries in Africa is used over an 8-year period from 2006 to 2013. We employ both Random Effect and GMM techniques to resolve the issues of unobserved heterogeneity and endogeneity. We observe that overall, financial development reduces the social costs of intermediation. We also determine that the social costs of intermediation are lower for countries that have more developed financial systems compared to those with less developed financial systems. Our study is useful because it suggests that if countries want to reduce their social costs of intermediation, they should develop their financial systems.

Source: UG
Financial Development, Institutional Quality and Inclusive Growth in Africa

We investigate the relationship between Financial Development (FD) and Inclusive Growth (IG) unlike extant literature, whose concentration has been on economic growth, which we refer to as wholesale growth. While we examine the effect of FD on IG, we investigate the moderating role played by institutions and the regulatory ambience in conveying the strides of FD towards the poor. We measure IG through a social mobility function approach and also construct an IG Index using Asian Development Bank’s framework of IG for robustness. We employ a 27-year-old panel data collected from across 48 African countries in our dynamic estimations of the FD-IG nexus. We find a non-linear relationship between finance and IG. Our results show that for FD to lead to IG, there is a need to have an effective institutional setup that regulates financial market participants to be inclusive in their operations. With weak institutions, FD’s effect on IG is negative. Our study does not just investigate how FD explains how much money there is overall, but how the money is shared across societies as well. This study is the first to examine the finance-growth nexus from the perspective of inclusivity. Practical policy implications are also discussed.

Source: UG
Financial development, sectoral effects, and international trade in Africa: An application of pooled mean group (PMG) estimation approach

Existing studies on financial development–international trade nexus have centred on the implications of finance for trade without investigating the transmission channels of finance on trade. More importantly, how financial sector development mediates the relationship between sectoral value additions and trade remains an unexplored area. This study addresses these gaps in the literature relying on panel data from 46 countries in Africa spanning 1980–2016. Our evidence based on the pooled mean group estimations suggest that, for both the long and short run, although the impact of sectoral value additions is contingent on the proxy of trade, financial sector development does not have a significant effect on international trade. This holds irrespective of the measure of finance and international trade. However, after controlling for the transmission channels, a coexistence of a negative long run substitutionarity between finance and trade is found, and this is invariant of the indicator of finance and trade. On the mediation role, we find that higher sectoral value additions dampen the deleterious effect of finance on trade with huge impact emanating from the service sector. We discuss some key implications for policy.

Source: UG
Financial Exclusion: What Drives Supply and Demand for Basic Financial Services in Ghana

The majority of people in Sub-Saharan Africa does not have a basic bank account and are financially excluded from main stream financial services. This paper examines factors that drive geographic exclusion of banking services to rural communities and households’ demand for a basic bank account in Ghana. Using rural community based and household survey datasets, the study finds that banks’ decision to place a branch in a community are positively influenced by the market size, the level of infrastructure such as energy and communication facilities in the area, market activeness etc. but are negatively influenced by the general level of insecurity associated with crime, conflicts, natural disasters etc. Conversely, households’ demand for a bank account appears to be strongly driven by both market and non-market factors such as price, illiteracy, ethno-religion, dependency ratio, employment and wealth status as well as proximity to a bank.

Source: UG
Financial freedom, market power and bank margins in sub-Saharan Africa

Purpose – This paper examines the effect of financial (banking) freedom and market power on bank net interest margins (NIM). Design/methodology/approach – The study uses data from 11 sub-Saharan African countries over the period, 2006-2012, and the system generalized method of moments to assess how financial freedom affects the relationship betweenmarket power and bank NIM. Findings – The authors find that both financial freedom and market power have positive relationships with bank NIM. However, there is some indication that the impact of market power on bank margins is sensitive to the level of financial freedom prevailing in an economy. It appears that as competition intensifies, margins of banks in freer countries are likely to reduce faster than those in areas with more restrictions. Practical implications – Competition policies could be guided by the insight on how financial freedom moderates the effect of market power on bank margins. Originality/value – This study provides new empirical evidence on how the level of financial freedom affects bankmargins and the market power-bank margins relationship.

Source: UG
The financial impact of puerperal infections on patients, carers and public hospitals in two regions in Ghana

Puerperal infection (PI) is a known maternal health problem globally. However, there is limited information on its economic impact on patients, carers, and public hospitals in lower-middle-income countries, such as Ghana. A prospective case-control study was undertaken in two regional hospitals to analyze the cost of PI. A total of 667 and 559 participants were enrolled in the study at the Greater Accra Regional Hospital (GARH) and the Eastern Regional Hospital (ERH), respectively. Total, average and marginal costs were analyzed between patients with and without PI. Within the study period, the prevalence of PI was 9.1% at ERH and 14.9% at GARH. Overall, patients with PI reported excess length of hospital stay (LOS), corresponding to 46.8% and 33.5% increases in average direct cost at ERH and GARH, respectively, compared with their control groups. In almost all cases, the attributable indirect cost was consistent with productivity loss. In both hospitals, patients with PI reported excess LOS and increased direct and indirect costs. The total cost of PI to society, which is the sum of the direct cost, productivity loss, and hospital cost, was higher in Greater Accra than in the Eastern region.

Source: UG
Financial inclusion and financial sector development in Sub-Saharan Africa: a panel VAR approach

Purpose: The purpose of this paper is to investigate the dynamic link between financial inclusion and financial sector development (FSD) in Sub-Saharan Africa. Design/methodology/approach: This paper employs a panel vector autoregressive framework to examine the dynamic link between financial inclusion and FSD in Sub-Saharan Africa. Findings: The findings indicate that there is a reverse causality between FSD and financial inclusion in both the Sub-Saharan Africa countries sample and the full sample. It is evident that financial inclusion is a driver of FSD and vice versa. Practical implications: The practical implication of this study is that financial inclusion should not only be pursued as a policy objective but it could also be an outcome variable of FSD and vice versa. This implies that African economies and governments in their effort to enhance financial inclusion, FSD can serve as a policy tool. This means that policies aimed at promoting financial inclusion will not impede FSD because the two are complementary. This suggests that we can achieve financial inclusion without sacrificing FSD and vice versa. Originality/value: This paper provides first empirical evidence of the link between financial inclusion and FSD from the Sub-Saharan Africa perspective using data sourced from World Development Indicators spanning from 1990 to 2014 for 48 Sub-Saharan African economies and 217 economies in the world for the full sample. © 2019, Emerald Publishing Limited.

Source: UG
Financial inclusion and human development in frontier countries

This study empirically investigates whether the level of human development drives greater financial inclusion, and vice versa in the contexts of frontier markets. The dynamic panel generalized methods of moments (System‐GMM) methodology is employed to analyze data spanning from 2005 to 2014 for twenty (20) frontier markets by Standard and Poor's Indices. The study finds that human development is a catalyst for financial inclusion scale‐up in the banking industry, which in turn, augments the development process. It establishes fresh evidence that income level, financial literacy, and healthy lives are the decisive factors for financial inclusion scale‐up in the banking industry. It finds new evidence that the underlying cause of low financial inclusion is low human development. The study concludes that low human development causes low financial inclusion. Also, promoting financial inclusion through the banking sector is very instrumental to stimulating human development, thus the reverse applies in frontier markets. The study implies that low living standards, poor health, high illiteracy, and deprived well‐being and freedom largely account for low financial inclusion hence its spillover effect of having low human development in frontier market countries.

Source: UG
Financial inclusion and inclusive growth in Africa: What is the moderation role of financial stability?

This article aims to explore the interplay between financial stability, financial inclusion and inclusive growth in 40 African countries during the period 2004–2020. It acknowledges that an unstable financial system has the potential to erode confidence and hinder the essence of financial inclusion in promoting inclusive growth. However, studies regarding the combined effect of financial inclusion and financial stability on inclusive growth are hard to find, especially in Africa. By examining the effects of financial inclusion on inclusive growth and the synergistic relationship between financial stability and inclusive growth, this study seeks to shed light on how these factors interact in the context of African economies. To To cater for endogeneity issues, we used a two-step system-generalized method of moment. Our result reveals three outcomes: First, financial inclusion promotes inclusive growth. Second, financial stability alone is less effective at enhancing inclusive growth. Lastly, financial stability forms synergy with financial inclusion to further spike inclusive growth. It is recommended that policymakers strive to enhance financial inclusion by promoting financial stability.

Source: UG
Financial inclusion and inclusive growth in sub-Saharan Africa

This paper empirically examines the quantitative relationship between financial inclusion and inclusive growth in sub-Saharan Africa using a panel of 46 countries for the period 2004–2018. The evidence suggests that usage of financial services, among other covariates, has a quantifiable and discernible impact on inclusive growth compared with availability and knowledge of financial services. Precisely, a unit increase in the usage of financial products and services improves inclusive growth by 0.03 units in sub-Saharan Africa. The paper contributes to literature by initially constructing a broader index of inclusive growth and subsequently estimating the separate quantitative effects of three categories of financial inclusion indicators on inclusive growth by employing the Arellano–Bover/Blundell– Bond system Generalized Method of Moment estimator. The findings underscore the need for policymakers to develop innovative, sustainable and inclusive financial systems capable of distributing growth benefits equitably. This can be achieved through moderate lending rates and transaction charges, improved access to retail and corporate loans, mortgages, overdrafts, credit cards, letters of credits and user friendly financial technologies.

Source: UG
Financial inclusion and poverty: evidence from developing economies

Purpose – This paper examines the impact of financial inclusion on poverty through access to mobile money in developing economies. Design/methodology/approach – The authors employ the principal component analysis to construct an index of financial inclusion using demand and supply indicators, including mobile accounts. The authors use the two-step system GMM estimator for the analysis because of its efficiency and robustness in addressing heteroscedasticity and autocorrelation. Findings – The main finding is that financial inclusion generally increased and significantly reduces poverty in the sample period. Furthermore, income inequality worsens poverty. Research limitations/implications – This study has few limitations. First, the empirical analysis of the study is restricted to macroeconomic factors only because of limited Household Finance Survey data set and time availability. Second, the study is limited to developing countries and the results cannot be generalized. Practical implications – Financial inclusion is a significant policy tool for poverty reduction. There is the need to enhance strategies that further improve financial inclusion by expanding and improving the use of mobile money accounts. Social implications – The paper sheds light on how developing countries can harness financial inclusion to reduce poverty. Originality/value –The paper differs from the previous studies in two ways. Firstly, mobile money account is included in the computation of financial inclusion index over the sample period. It also determines the impact of financial inclusion on poverty for short-run and long-run periods.

Source: UG
Financial inclusion and technical change: An empirical evidence from Ghana

This paper investigates the linkage between technical change and financial inclusion in Ghana. This study employs logistic regression model using micro-data from the Global Findex Database to examine the extent of relation between technical change and financial inclusion in Ghana. The study finds that that technical change is not sufficient in activating financial inclusion. What is important for financial inclusion are such factors as; improving financial literacy, reducing cost or introduce costless account opening, boasting financial sector confidence and inspire financial institution to introduce banking products that meet the need(s) of those financially excluded. Hence the study concludes that a lot more needs to be done for such technical changes to trigger financial inclusion in Ghana since this has important macroeconomic implication for long term economic growth

Source: UG
Financial Inclusion in Sub-Saharan Africa: Recent Trends and Determinants

This paper conducts a comparative analysis of financial inclusion in 31 Sub-Saharan African countries using data from the global Findex database. We find that while the aggregate level of financial inclusion has increased significantly between 2011 and 2014, there are variations in both the level and rates of improvement among the countries. We also find that individual-level covariates (age, education, gender and wealth), macroeconomic variables (growth rate of GDP and presence of financial institutions) and Business Freedom are significant predictors of financial inclusion. Our findings suggest that financial inclusion policies should target key populations like women and young people. © 2018 Informa UK Limited, trading as Taylor & Francis

Source: UG
Financial inclusion: a catalyst for financial system development in emerging and frontier markets

Purpose – This study aims to examine the relationship between financial inclusion and financial system development in emerging and frontier markets. Design/methodology/approach – Using data across 35 countries over 19 years (2004–2022), the improved GMM estimation technique reveals that financial inclusion significantly contributes to the development of financial systems. Findings – The study uses a segmented approach, dividing financial development indices into subindices: financial depth, financial access and financial efficiency. Indicators of bank financial inclusion show a positive and highly significant relationship with bank depth and access but a negative relationship with bank efficiency. Similarly, indicators of the debt market and stock market financial inclusion demonstrate positive relationships with market depth and access but negative relationships with debt and stock market efficiency. The study further examines composite indexes of financial inclusion for bank, debt and stock market segments, finding strong and highly significant relationships with market development. These results underscore the importance of promoting financial inclusion across all segments of the financial sector to achieve an inclusive financial system. Practical implications – The implications of this research highlight the need for policymakers and practitioners to implement policies and regulations that enhance financial inclusion and foster the development of robust financial systems. By extending access to mainstream financial instruments and services, financial institutions can stimulate financial intermediation and support, thereby accelerating the development of the banking, debt and stock markets. Originality/value – The study is robust to the use of several indicators of financial inclusion and financial development, and it forms part of the early studies that examine the close relationship between the two variables.

Source: UG
Financial innovation and banks performance in developing countries: Evidence from Ghana

Abstract Increase in the diffusion of information communication technology in Africa has resulted in the increase of technology-based financial products and processes. The rollout of financially innovative products and processes is being undertaken on both the macro level (by regulators and government agencies) and the micro level (banking institutions). To determine whether or not this capital-intensive investment is worthwhile or otherwise, the study collected firm-level data on banks operating in Ghana, West Africa, to examine the relationship between financial innovation indicators and bank performance. Using a quantitative design, the study employs panel regression to analyse a panel data of 21 banks (both local and foreign-owned). operating in Ghana between 2007 and 2015 The results show that financial innovation, proxied by two industrywide interventions, has a positive and significant impact on bank performance. It is recommended that deposit-taking institutions in developing countries invest in financial innovative services to increase their performance. On the macro level, governments and banking industry regulators in Africa are encouraged to invest in creating and supporting the proliferation of technology-based systems that will improve banking processes.

Source: UG
Financial institution ties and survival of small commercial poultry farms (SCPFs) in Ghana

Purpose The purpose of this study was to understand the usefulness of financial institution class ties in small commercial poultry farms’ (SCPFs’) survival in Ghana. Design/methodology/approach The study uses data from a network survey with associated attribute data on poultry small- and medium-sized enterprises. The data were collected in two waves between January 2014 and March 2015. Survival is estimated using a lagged probit model. Findings It was found that the survival rate of SCPFs is influenced by ties to universal banks and cooperative credit unions that have a positive effect while those with ties to savings and loans companies have a reduced survival probability. Originality/value The findings of the study make a significant contribution to the agricultural enterprise financing literature showing the relevance of the different financial institution types in the continued survival of agricultural SCPFs.

Source: UG
Financial literacy, financial inclusion and participation of individual on the Ghana stock market

This paper examines the impact of financial literacy and financial inclusion on stock market participation in Ghana. It employs a sample of 1,966 respondents across the 10 regions of Ghana for the year 2018. We employ biprobit models to estimate the influence of financial literacy on financial inclusion, while robust probit models are used to independently analyse the effect of financial literacy and financial inclusion on stock market participation as well as their joint effect. We found the following results: first, financial literacy positively influences financial inclusion. Second, the study does not support previous findings that financial literacy is not a determinant of stock market participation in Ghana. Third, financial inclusion through using an account to save significantly affects stock market participation. Finally, the interaction of financial literacy and financial inclusion on stock market participation provides evidence of no significant effect.

Source: UG
Financial Market Development and Capital Structure of Listed Firms – Empirical Evidence from Ghana

This study explores the relationship between financial market development and choice of finance (debt-equity) of listed firms in Ghana in a panel data framework.The core concern of this study is to test whether debt and equity finance are complements or substitutes. The study used panel data which involves pooling of twenty-one listed firms on the Ghana Stock Exchange (GSE) over the period 1995-2005. The study finds evidence of complementarity between banking and stock market developments in financing decisions of listed firms in Ghana. The stock market development is indicated to have a positive effect on the capital structure decisions of listed firms. However, substitution effect between debt and equity mainly in favour of equity financing sets in as the financial landscape develops further. This finding emphasises the important role equity markets in developing countries play in capital structure of listed firms.

Source: UG