Eric Osei-Assibey

Microenterprise financing preference: Testing POH within the context of ghana's rural financial market.

Purpose - The purpose of this paper is to investigate the determinants of financing preference of micro and small enterprises (MSEs) whilst distinguishing a broader range of financing sources beyond what is typically the case within the corporate finance literature. Design/methodology/approach - Under the framework of ordinal logistic regression, the paper also tests whether there is evidence of hierarchical preference ordering as predicted by pecking order theory (POH) using field survey data for 2009. Findings - The authors relate that new enterprises are more likely to prefer low cost and less risky or less formal financing such as internal or bootstrap finances. However, as the enterprise gets established or matures, its capacity to seek formal financing increases, thereby becoming more likely to prefer or being in a higher category of formal financing. While the paper affirms the POH, it is argued that this order is a consequence of severe persistent constraints other than sheer preference. The findings further reveal that, microentrepreneurs and MSEs-specific level socio-economic characteristics such as owners education or financial literacy status, households tangible assets, ownership structure, enterprise size, as well as sensitivity to high interest rates in the credit market, to be important determinants of either past (start-up), present or future financing preference. Originality/value - The main value of this paper is to analyse the determinants of financing preference of MSEs within the context of rural financial market (RFM) from a developing country perspective.

Regulatory capital and its effect on credit growth, non-performing loans and bank efficiency

Purpose - – This paper aims to investigate the influence of the central bank’s regulatory capital on commercial banks specific performance outcomes such as credit supply, interest rate spread (as a measure of efficiency) and non-performing loans (NPLs). Design/methodology/approach - – Using specific commercial bank-level panel data from 2002-2012, a system of equations was modeled that allows us to apply the system generalized methods of moment approach and estimate the equations, while controlling for specific bank level, industry and macroeconomic variables. Findings - – The study finds a positive relationship between a net minimum capital ratio and the net interest margin. Although this is in contrast with the study expectations, the result suggests that a high net minimum capital requirement would widen the spread between the lending and saving rates. The study further finds evidence to support the fact that high minimum capital requirement and excess capital above the minimum required drive credit growth in the banking sector of Ghana. However, high excess capital increases risk-taking activities of the banks, as excess capital is found to be associated with high NPL ratios. Practical implications - – Given the economic benefits and costs of sharply increasing bank regulatory capital, our results speak to the ongoing debates on the right level of capital, the effectiveness of the Bank of Ghana policy rate (PR) and the high lending rates that appear to respond only slowly to macroeconomic indicators such as the PR and the inflation rate. The finding also has practical implications for the adoption of the Basel III accord. Originality/value - – The empirical literature has not paid enough attention to the impact of regulatory capital on the three specific bank-level outcomes – NPLs, interest rate spread and the nature of interrelationships among these variables, particularly in the African context.

What drives behavioral intention of mobile money adoption? The case of ancient susu saving operations in Ghana

Purpose - – The purpose of this paper is to provide insights into the ancient Design/methodology/approach - – Using field survey data from market traders and Findings - – Generally, among the Practical implications - – These findings have important implications for MM uptake and the modernization of the Originality/value - – Literature on MM is growing in recent times. However, evidence on adoption as a saving channel to replace the traditional saving system is scanty, particularly within the African context.

Fiscal Incidence in Ghana

Abstract We use methods developed by the Commitment to Equity Institute to assess the effects of government taxation, social spending and indirect subsidies on poverty and inequality in Ghana. We also simulate several policy reforms to assess their distributional consequences. Results show that, although the country has some very progressive taxes and well‐targeted expenditures, the extent of fiscal redistribution is small, but about what one would expect given Ghanas income level and relatively low initial inequality. Results for poverty reduction are less encouraging: were it not for the in‐kind benefits from health and education spending, the overall effect of government spending and taxation would actually increase poverty in Ghana. Eliminating energy subsidies and at the same time reallocating part of the savings to well‐targeted transfer programs could lower the fiscal deficit while reducing inequality and protecting the poor.

Determinants of portfolio equity flows to Sub-Saharan Africa

Purpose - The study investigates the determinants of portfolio equity flows to the Sub-Saharan African region over the period 1996-2010 Design/methodology/approach - Employing the System Generalized Methods of Moment (GMM) dynamic panel estimation framework to estimate the baseline regression, the study uses a sample of 14 Sub-Saharan African countries. To check the robustness of the estimation results, the study further analyzes the dataset using the Random effects-GLS (EGLS) estimator. Findings - The paper finds a significant positive relationship between financial development and portfolio equity flows. Further, while the study surprisingly finds trade openness to have a significant negative relationship, political stability is found to have a significant positive relationship with portfolio equity. To check for the robustness of these results, we further analyze the dataset using the Random EGLS estimator. The result of the EGLS estimator confirms that there is a robust positive relationship between financial development and portfolio equity flows to SSA. However, the results suggest that neither trade openness nor political stability is a robust determinant of portfolio equity flows to the sub-region. Practical implications - Policy measures should aim at enhancing financial sector development, political stability and rule of law. A transparent judicial system that enhances rule of law and deepens democratic governance in countries in the sub region is critical. But even more critical is deepening the financial sector, given the important role financial development play in portfolio equity flows as suggested by the findings. A range of measures and appropriate policy responses are therefore needed for countries that have to manage macroeconomic and financial stability risks to deepen the financial sector. Originality/value - Most studies on private capital flows to SSA have focused on FDI flows with no or scanty evidence on the drivers of portfolio equity-flows. This study fills the gap.

Financial Integration and Economic Growth: Portfolio Equity Flows to Sub-Saharan Africa

Financial globalization and the financial crises of recent times have drawn the attention of economists and policy-makers to the macroeconomic implications of unrestricted capital flows into developing countries. The neoclassical theory predicts the potential benefits of financial integration, but the empirical evidence of real benefits to long-term macroeconomic growth remains highly contested (Prasad et al., 2003).

The Extent and Determinants of Tax Gap in the Informal Sector: Evidence from Ghana: Extent and Determinants of Tax Gap in the Informal Sector

In this paper, we attempt to estimate the tax gap in the informal sector as well as the contributing factors of the tax losses in SSA countries using Ghana as a case study. Using micro data on non‐farm household enterprises obtained from the sixth round of the Ghana Living Standards Survey as well as data on quarterly tax payable by specified small scale enterprises derived from the Small Tax Payer office of the Ghana Revenue Authority, the findings show that the national potential and actual taxes in the informal sector are US

Corruption, institutions and capital flight: evidence from Sub-Saharan Africa

81 974 846 and US

Mobile money adoption and spending behaviour: the case of students in Ghana

25 023 273, respectively, reflecting an estimated national tax gap or loss of approximately US

Source of finance and small enterprise's productivity growth in Ghana

56 951 573. Firm level variables such as type of business, urban location and experience of the firm significantly increase the propensity to pay tax and reduce the tax gap. Copyright