{"title":"Bank Deposit Mobilization, Loan Advancement and Financial Stability: The Role of Bank Branches in an Emerging Market","authors":"B. Kusi, Lord Mensah, E. Agbloyor","doi":"10.1080/15228916.2021.1962155","DOIUrl":null,"url":null,"abstract":"ABSTRACT This study investigates the relationship between bank branches, financial intermediation, and financial stability in Ghana using 35 banks between 2009 and 2017. Employing a panel two-step dynamic GMM model, a non-linear “inverted U-shaped” relationship is documented between bank branches and financial stability. This implies that initial increases in bank branches promote financial stability but beyond 191 and 173 bank branches, bank branching derails banking stability. The findings further reveal that bank branches enhance the positive effects of deposits on bank stability whilst reducing the negative consequences of bank lending on financial stability. These findings imply that while bank management can rely on bank branches to enhance loans and deposits in promoting banking stability, bank management should also be cautious about the number of bank branches they keep given that beyond a certain threshold it may impede stability.","PeriodicalId":46981,"journal":{"name":"Journal of African Business","volume":"23 1","pages":"887 - 906"},"PeriodicalIF":2.1000,"publicationDate":"2021-08-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of African Business","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1080/15228916.2021.1962155","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"BUSINESS","Score":null,"Total":0}
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Abstract
ABSTRACT This study investigates the relationship between bank branches, financial intermediation, and financial stability in Ghana using 35 banks between 2009 and 2017. Employing a panel two-step dynamic GMM model, a non-linear “inverted U-shaped” relationship is documented between bank branches and financial stability. This implies that initial increases in bank branches promote financial stability but beyond 191 and 173 bank branches, bank branching derails banking stability. The findings further reveal that bank branches enhance the positive effects of deposits on bank stability whilst reducing the negative consequences of bank lending on financial stability. These findings imply that while bank management can rely on bank branches to enhance loans and deposits in promoting banking stability, bank management should also be cautious about the number of bank branches they keep given that beyond a certain threshold it may impede stability.
期刊介绍：
Journal of African Business is the official journal of the Academy of African Business and Development, the largest network of professionals committed to advancement of business development in African nations. JAB strives to comprehensively cover all business disciplines by publishing high quality analytical, conceptual, and empirical articles that demonstrate a substantial contribution to the broad domain of African business. Regardless of the research context, tradition, approach, or philosophy, manuscripts submitted to JAB must demonstrate that the topics investigated are important to the understanding of business practices and the advancement of business knowledge in or with Africa. Particularly, JAB welcomes qualitative and quantitative research papers. JAB is not, however, limited to African-based empirical studies. It searches for various contributions, including those based on countries outside Africa that address issues relevant to African business. Targeted toward academics, policymakers, consultants, and executives, JAB features the latest theoretical developments and cutting-edge research that challenge established beliefs and paradigms and offer alternative ways to cope with the endless change in the business world. Covered areas: Accounting; Agribusiness Management and Policy; Business Law; Economics and Development Policy; Entrepreneurship and Family Business; Finance; Global Business; Human Resource Management; Information and Communications Technology (ICT); Labor Relations; Marketing; Management Information Systems (MIS); Non-Profit Management; Operations and Supply Chain Management; Organizational Behavior and Theory; Organizational Development; Service Management; Small Business Management; Social Responsibility and Ethics; Strategic Management Policy; Technology and Innovation Management; Tourism and Hospitality Management; Transportation and Logistics
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