Michael Danquah

TFP growth and its determinants: nonparametrics and model averaging

Total Factor Productivity (TFP) accounts for a sizeable proportion of the income and growth differences across countries. Two challenges remain to researchers aiming to explain these differences: on the one hand, TFP growth is hard to measure; on the other hand, model uncertainty hampers consensus on its key determinants. This paper combines a non-parametric measure of TFP growth with model averaging techniques to addess both issues. The empirical findings suggest that the most robust TFP growth determinants are unobserved heterogeneity, initial GDP, consumption share, and trade openness. We also investigate the main determinants of the TFP components: efficiency change (i.e. catching up) and technological progress (i.e. innovation).

Tax reforms and revenue mobilization in Ghana

Purpose - The purpose of this paper is to comprehensively examine Ghana’s tax reform programme and investigate whether it has facilitated the revenue mobilization capacity of the overall tax system and of individual taxes on the basis of estimates of tax buoyancies and elasticities. Design/methodology/approach - This study uses the proportional adjustment approach to estimate tax buoyancies and elasticities of the overall tax system and of individual taxes for the pre and post tax reform period over the 1970-2013 period. Findings - The results show that in general, tax reforms had a positive influence on the overall tax structure and on the individual tax handles as evidenced in the more than unity buoyancy and elasticity. All the individual taxes, except excise duties, recorded buoyancies and elasticities of more than unity during the reform period. Practical implications - Tax authorities ought to move away from income-based taxation which discriminates against saving and investment, in favour of consumption-based taxes in conformity with international standards. Emphasis must also be placed on those taxes that have high revenue elasticities. These taxes include the personal, corporate, the Value Added Tax, and the import duties. Originality/value - In this study, the paper extends and disaggregates the data on taxes, account for discretionary tax changes from the historical time series data, and use the adjusted historical time series data to estimate tax elasticity. The study therefore provides an in-depth understanding of the effects of the tax reforms on the overall tax system and of individual taxes in Ghana.

Paying for education among households in Ghana: Is there any role for household resources and contextual effects?

Purpose - Using data from the sixth round of the Ghana Living Standards Survey, this paper aims to take a critical look at issues relating to the demand for education in Ghana. Design/methodology/approach - In doing this, the paper develops a model for the determinants of household’s educational expenditure using the full sample of data and an income-quintile disaggregated model of the determinants of household’s educational expenditures. The study adopts robust empirical estimation techniques to estimate the model. Findings - The paper finds that household resources importantly influence children’s educational expenditures with wealthier households spending proportionately more in educating their children than poorer households; large-sized households spend more in terms of educational expenses than small-sized households reflecting largely the quantity of education purchased, given that quality and contextual factors matters for educational investments. Strikingly, the findings show that female headship is a significant positive predictor of households’ demand for education. These findings provide valuable policy options relating to the goal of ensuring inclusive and quality education for all and promoting a lifelong learning by 2030. Originality/value - While literature on the determinants of households’ educational expenditures abound, very few of this literature focuses on sub-Saharan Africa. Consequently, this study makes an important contribution to the literature by providing evidence on the determinants of households’ educational expenditure in the context of sub-Saharan Africa.

Examining the determinants of efficiency using a latent class stochastic frontier model

Abstract In this study, we combine the latent class stochastic frontier model with the complex time decay model to form a single-stage approach that accounts for unobserved technological differences to estimate efficiency and the determinants of efficiency. In this way, we contribute to the literature by estimating “pure” efficiency and determinants of productive units based on the class structure. An application of this proposed model is presented using data on the Ghanaian banking system. Our results show that inefficiency effects on the productive unit are specific to the class structure of the productive unit and therefore assuming a common technology for all productive units as is in the popular Battese and Coelli model used extensively in the literature may be misleading. The study therefore provides useful empirical evidence on the importance of accounting for unobserved technological differences across productive units. A policy based on the identified classes of the productive unit enables a more accurate and effectual measures to address efficiency challenges within the banking industry, thereby promoting financial sector development and economic growth.

Unmasking the contributing factors of entrepreneurial activities among men and women in Ghana

Purpose Using the 2010 Global Entrepreneurship Monitor (GEM) survey data, the purpose of this paper is to investigate the contributing factors of entrepreneurial propensity among males and females in Ghana. Design/methodology/approach Using a measure of entrepreneurial propensity that takes into account individuals who are involved in starting a new business (nascent entrepreneurs) as a dependent variable and socio-demographic characteristics, and perceptual variables as explanatory variables, the study adopts robust empirical estimation techniques to examine how these variables influence the probability of starting a new business among men and women in Ghana. Findings The probability of being a male nascent entrepreneur is significantly dependent upon a wide range of factors including demographic, economic, perceptual and contextual elements, albeit with important variations across gender. An individuals’ subjective assessment of fear of failure in starting a business and of having the requisite entrepreneurial capabilities; the age of the individual; gender of the individual; work status and contextual factors matters for entrepreneurial propensity in Ghana. However, important differences exist in the drivers of entrepreneurial propensity for males and females with females’ entrepreneurship attributed largely to conditions of necessity relative to their male counterparts. Originality/value The main value of this paper is to use the GEM survey (which is nationally representative) for Ghana to analyze the contributing factors of the entrepreneurial propensity among men and women in Ghana.

Unmasking the factors behind income inequalities in Ghana

Purpose The purpose of the paper is to examine the extent and trends of income inequality as well as the contribution of household and community-level factors in explaining inequality within north and south in Ghana. Design/methodology/approach The study employs both descriptive and regression methods. The study adopts the methodology by Fields (2002) to assess the importance of household and community attributes in explaining the level of inequality within the north and the south. Findings The findings of the study show that household characteristics such as urban location, no education, public and private formal economic activities, and not covered by National Health Insurance Scheme are major determinants of inequality within the north and the south. Specifically, within the north, the 20-34 year age group is the most prominent contributor to inequality. Within the south, the most important determinant of inequality is the completion of junior high school. The contribution of community-level features shows that, within the north, access to banks is the most vital factor to inequality, whereas within the south, access to electricity and public transport is the most important community factor. Practical implications The study provides an understanding of the underlying household and community factors driving the observed inequality patterns within the north and the south in Ghana. Policy options are identified for achieving the sustainable development goals. Originality/value The study uses the latest round of the Ghana Living Standards survey, GLSS 6, which covers new data on a nationally representative sample of 18,000 households in 1,200 enumeration areas.

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

Technology Transfer and National Efficiency: does absorptive capacity matter?

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

Market Efficiency and Price Discovery in Cocoa Markets

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