European journal of management and business economics, Jul 12, 2023
Purpose-Credit Default Swap (CDS) trading alters equilibrium interactive monitoring of external c... more Purpose-Credit Default Swap (CDS) trading alters equilibrium interactive monitoring of external corporate monitors due to a possible change in private lenders' incentive to monitor client firms. This study explores how audit fees change in response to CDS trade initiation on client firms and how this effect is moderated by investor protection. Design/methodology/approach-With 6,052 crosscountry firm observations, the author conducts estimations in the systems dynamic general methods of moments framework. Findings-The author documents that audit fees rise on average after CDS trade initiations with and/or without investor protection. Meanwhile, change in auditors' risk perception result in increased audit costs when CDS trade initiation and investor protection interact. The effect of CDS trading on audit fees remain after controlling for firm, audit, and auditor features are robust to different proxies of audit cost. Practical implications-The need for firms in high investor protection jurisdictions to initiate CDS trade to implement policies in order to maximize their gains from investor protection activities to lessen the overall impact of any increased audit cost that may arise. Furthermore, CDS regulation may be strategically targeted to lessen the effect of increased audit costs on firms after initiation. This would ensure that the resulting increase in audit cost may not materially impact the cash or profitability position of such firms. Originality/value-This study is distinct from previous ones by focusing on variation in private lenders incentive to monitor after CDS trade initiation after controlling for possible monitoring by short-term creditors. Given that monitoring is not costless for private lenders and CDS trading on their borrowers causes a change in this cost structure, the author documents how auditors react to such changes in incentive to monitor.
We revisit the flight-to-quality (FTQ) and flight-from-quality (FFQ) occurrences vis-à -vis the st... more We revisit the flight-to-quality (FTQ) and flight-from-quality (FFQ) occurrences vis-à -vis the stock-bond nexus across differing investment time scales in the COVID-19 era, using a novel technique hinged on a denoised frequency-domain transfer entropy. Our findings divulge that flights, both FTQ and FFQ, could be attained during stress periods. Generally, in the intermediate term of the COVID-19 pandemic, both Islamic and conventional bonds could act as safe havens, diversifiers, and hedges for international equities, and the same could be observed for international equities. We reiterate empirically that flights may improve the financial system’s stability and robustness by allowing diversity to be effective when it is most required. The findings have financial and portfolio implications for investors considering how to deploy their investments in the COVID-19 era. Our findings may impact policymakers’ responses to changes in various asset classes, allowing them to better monitor f...
Rural banks in Ghana were originally establish to bring banking services to the door step of the ... more Rural banks in Ghana were originally establish to bring banking services to the door step of the rural communities and also provide financing support to rural industries. However most appear to have relocated to the urban areas and thus defeating their original mandate. This paper was set out to ascertain the reason for this apparent development in the banking sector of Ghana. We employed varied methods of data collection to concretely bring out the fact from all stakeholders. The responses from about 130 stakeholders showed that rural banks in Ghana are drifting to the urban agencies to mobilise funds to increase their capital base; to provide credit to the urban poor and also to mobilise enough profit to support their activities (social responsibility projects) in their rural catchment. Undoubtedly, the rural banks are trying to be innovative but, their inability to compete favourably with the universal banks in the urban areas can destabilize them.
For some time now, revenue mobilisation of the local government in Ghana especially the metropoli... more For some time now, revenue mobilisation of the local government in Ghana especially the metropolitan, municipal, and district assemblies have been poor, forcing them to rely entirely on budget allocation from the central government. The objective of this paper was to come out with strategies that can help Cape Coast Metropolitan Assembly (CCMA) to generate enough Internal Generated Funds (IGFs) to meet its developmental needs. The study found out that CCMA is unable to mobilise adequate resources in terms of funds to help meet its socioeconomic and political obligations to consumers of public goods and services in the metropolis. The study also found that the inability to mobilise adequate funds comes from the fact that only traditional means of mobilising funds are used. It is recommended that, the chief executive officer of CCMA should put in place reliable data base on properties and businesses, use relationship marketing to reach out to stakeholders through meetings, seminars, c...
Rural banks in Ghana were originally establish to bring banking services to the door step of the ... more Rural banks in Ghana were originally establish to bring banking services to the door step of the rural communities and also provide financing support to rural industries. However most appear to have relocated to the urban areas and thus defeating their original mandate. This paper was set out to ascertain the reason for this apparent development in the banking sector of Ghana. We employed varied methods of data collection to concretely bring out the fact from all stakeholders. The responses from about 130 stakeholders showed that rural banks in Ghana are drifting to the urban agencies to mobilise funds to increase their capital base; to provide credit to the urban poor and also to mobilise enough profit to support their activities (social responsibility projects) in their rural catchment. Undoubtedly, the rural banks are trying to be innovative but, their inability to compete favourably with the universal banks in the urban areas can destabilize them.
The role of SMEs in the economic development of a country cannot be over-emphasized. They contrib... more The role of SMEs in the economic development of a country cannot be over-emphasized. They contribute to employment, GDP, innovations, human resource development and poverty alleviation. However, they are constrained by access to credit. The main objective of this paper was to develop an alternative model for raising funds. It also looked at why lenders are cynical in advancing credit to SMEs. It was found that inappropriate risk management, moral hazard and possible adverse selection limit their access to credit. The SMEs Network Fund developed suggested the formation of a self managed fund by the SMEs to finance their activities, which would require no collateral if SMEs access funds and offer relatively cheaper capital to SMEs.
Studies on the nature of capital structure of firms worldwide have focused on its impact on finan... more Studies on the nature of capital structure of firms worldwide have focused on its impact on financial performance and its determinants, only few studies have tried to empirically test the theoretical basis of capital structure most especially in Ghana and Africa at large. From this backdrop, this study tested the pecking order theory which is of the view that there is a financing order and the signalling theory which suggests that a financial institution's financing strategy sends diverse signals to potential lenders about the financial dependence. The results indicate that the pecking order and signalling theories are significantly been applied by the financial institutions in Ghana. This conclusion is arrived at after the panel data methodology was employed in the model estimation. The study therefore suggest that in as much as possible financial institutions should conform to the pecking order theory, they should implement policies which would increase their cash flow as it signals to investors that the firms are financially dependent.
Rural banks in Ghana were originally establish to bring banking services to the door step of the ... more Rural banks in Ghana were originally establish to bring banking services to the door step of the rural communities and also provide financing support to rural industries. However most appear to have relocated to the urban areas and thus defeating their original mandate. This paper was set out to ascertain the reason for this apparent development in the banking sector of Ghana. We employed varied methods of data collection to concretely bring out the fact from all stakeholders. The responses from about 130 stakeholders showed that rural banks in Ghana are drifting to the urban agencies to mobilise funds to increase their capital base; to provide credit to the urban poor and also to mobilise enough profit to support their activities (social responsibility projects) in their rural catchment. Undoubtedly, the rural banks are trying to be innovative but, their inability to compete favourably with the universal banks in the urban areas can destabilize them.
European journal of management and business economics, Jul 12, 2023
Purpose-Credit Default Swap (CDS) trading alters equilibrium interactive monitoring of external c... more Purpose-Credit Default Swap (CDS) trading alters equilibrium interactive monitoring of external corporate monitors due to a possible change in private lenders' incentive to monitor client firms. This study explores how audit fees change in response to CDS trade initiation on client firms and how this effect is moderated by investor protection. Design/methodology/approach-With 6,052 crosscountry firm observations, the author conducts estimations in the systems dynamic general methods of moments framework. Findings-The author documents that audit fees rise on average after CDS trade initiations with and/or without investor protection. Meanwhile, change in auditors' risk perception result in increased audit costs when CDS trade initiation and investor protection interact. The effect of CDS trading on audit fees remain after controlling for firm, audit, and auditor features are robust to different proxies of audit cost. Practical implications-The need for firms in high investor protection jurisdictions to initiate CDS trade to implement policies in order to maximize their gains from investor protection activities to lessen the overall impact of any increased audit cost that may arise. Furthermore, CDS regulation may be strategically targeted to lessen the effect of increased audit costs on firms after initiation. This would ensure that the resulting increase in audit cost may not materially impact the cash or profitability position of such firms. Originality/value-This study is distinct from previous ones by focusing on variation in private lenders incentive to monitor after CDS trade initiation after controlling for possible monitoring by short-term creditors. Given that monitoring is not costless for private lenders and CDS trading on their borrowers causes a change in this cost structure, the author documents how auditors react to such changes in incentive to monitor.
We revisit the flight-to-quality (FTQ) and flight-from-quality (FFQ) occurrences vis-à -vis the st... more We revisit the flight-to-quality (FTQ) and flight-from-quality (FFQ) occurrences vis-à -vis the stock-bond nexus across differing investment time scales in the COVID-19 era, using a novel technique hinged on a denoised frequency-domain transfer entropy. Our findings divulge that flights, both FTQ and FFQ, could be attained during stress periods. Generally, in the intermediate term of the COVID-19 pandemic, both Islamic and conventional bonds could act as safe havens, diversifiers, and hedges for international equities, and the same could be observed for international equities. We reiterate empirically that flights may improve the financial system’s stability and robustness by allowing diversity to be effective when it is most required. The findings have financial and portfolio implications for investors considering how to deploy their investments in the COVID-19 era. Our findings may impact policymakers’ responses to changes in various asset classes, allowing them to better monitor f...
Rural banks in Ghana were originally establish to bring banking services to the door step of the ... more Rural banks in Ghana were originally establish to bring banking services to the door step of the rural communities and also provide financing support to rural industries. However most appear to have relocated to the urban areas and thus defeating their original mandate. This paper was set out to ascertain the reason for this apparent development in the banking sector of Ghana. We employed varied methods of data collection to concretely bring out the fact from all stakeholders. The responses from about 130 stakeholders showed that rural banks in Ghana are drifting to the urban agencies to mobilise funds to increase their capital base; to provide credit to the urban poor and also to mobilise enough profit to support their activities (social responsibility projects) in their rural catchment. Undoubtedly, the rural banks are trying to be innovative but, their inability to compete favourably with the universal banks in the urban areas can destabilize them.
For some time now, revenue mobilisation of the local government in Ghana especially the metropoli... more For some time now, revenue mobilisation of the local government in Ghana especially the metropolitan, municipal, and district assemblies have been poor, forcing them to rely entirely on budget allocation from the central government. The objective of this paper was to come out with strategies that can help Cape Coast Metropolitan Assembly (CCMA) to generate enough Internal Generated Funds (IGFs) to meet its developmental needs. The study found out that CCMA is unable to mobilise adequate resources in terms of funds to help meet its socioeconomic and political obligations to consumers of public goods and services in the metropolis. The study also found that the inability to mobilise adequate funds comes from the fact that only traditional means of mobilising funds are used. It is recommended that, the chief executive officer of CCMA should put in place reliable data base on properties and businesses, use relationship marketing to reach out to stakeholders through meetings, seminars, c...
Rural banks in Ghana were originally establish to bring banking services to the door step of the ... more Rural banks in Ghana were originally establish to bring banking services to the door step of the rural communities and also provide financing support to rural industries. However most appear to have relocated to the urban areas and thus defeating their original mandate. This paper was set out to ascertain the reason for this apparent development in the banking sector of Ghana. We employed varied methods of data collection to concretely bring out the fact from all stakeholders. The responses from about 130 stakeholders showed that rural banks in Ghana are drifting to the urban agencies to mobilise funds to increase their capital base; to provide credit to the urban poor and also to mobilise enough profit to support their activities (social responsibility projects) in their rural catchment. Undoubtedly, the rural banks are trying to be innovative but, their inability to compete favourably with the universal banks in the urban areas can destabilize them.
The role of SMEs in the economic development of a country cannot be over-emphasized. They contrib... more The role of SMEs in the economic development of a country cannot be over-emphasized. They contribute to employment, GDP, innovations, human resource development and poverty alleviation. However, they are constrained by access to credit. The main objective of this paper was to develop an alternative model for raising funds. It also looked at why lenders are cynical in advancing credit to SMEs. It was found that inappropriate risk management, moral hazard and possible adverse selection limit their access to credit. The SMEs Network Fund developed suggested the formation of a self managed fund by the SMEs to finance their activities, which would require no collateral if SMEs access funds and offer relatively cheaper capital to SMEs.
Studies on the nature of capital structure of firms worldwide have focused on its impact on finan... more Studies on the nature of capital structure of firms worldwide have focused on its impact on financial performance and its determinants, only few studies have tried to empirically test the theoretical basis of capital structure most especially in Ghana and Africa at large. From this backdrop, this study tested the pecking order theory which is of the view that there is a financing order and the signalling theory which suggests that a financial institution's financing strategy sends diverse signals to potential lenders about the financial dependence. The results indicate that the pecking order and signalling theories are significantly been applied by the financial institutions in Ghana. This conclusion is arrived at after the panel data methodology was employed in the model estimation. The study therefore suggest that in as much as possible financial institutions should conform to the pecking order theory, they should implement policies which would increase their cash flow as it signals to investors that the firms are financially dependent.
Rural banks in Ghana were originally establish to bring banking services to the door step of the ... more Rural banks in Ghana were originally establish to bring banking services to the door step of the rural communities and also provide financing support to rural industries. However most appear to have relocated to the urban areas and thus defeating their original mandate. This paper was set out to ascertain the reason for this apparent development in the banking sector of Ghana. We employed varied methods of data collection to concretely bring out the fact from all stakeholders. The responses from about 130 stakeholders showed that rural banks in Ghana are drifting to the urban agencies to mobilise funds to increase their capital base; to provide credit to the urban poor and also to mobilise enough profit to support their activities (social responsibility projects) in their rural catchment. Undoubtedly, the rural banks are trying to be innovative but, their inability to compete favourably with the universal banks in the urban areas can destabilize them.
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Papers by Patrick Akorsu