Pub Date : 2021-10-26DOI: 10.1080/15228916.2021.1984817
M. Mangaliso, Nomazengele A. Mangaliso, L. Ndanga, Howard Jean-Denis
ABSTRACT Most of the business models and theories available to assist organizations in adapting their strategies to today’s dynamic business environment are based on the Anglo-Saxon worldview. Yet most scholars acknowledge that these theories have limited application in cultures outside of the Anglo-Saxon world. There is a dearth of research that infuses Western conceived theories of management with indigenous ontologies. To close this gap, this paper discusses managing change from an African perspective with specific reference to sub-Saharan Africa. It utilizes the philosophy Ubuntu that pervades the subcontinent as the bedrock on which change management can be anchored, asserting that embracing the Ubuntu values offers the best outcomes for managing organizations in Africa. Using Kurt Lewin’s change management model, the paper shows how incorporating the indigenous ontologies based on ubuntu in its execution can lead to sustainable change management in the sub-continent.
{"title":"Contextualizing Organizational Change Management in Africa: Incorporating the Core Values of Ubuntu","authors":"M. Mangaliso, Nomazengele A. Mangaliso, L. Ndanga, Howard Jean-Denis","doi":"10.1080/15228916.2021.1984817","DOIUrl":"https://doi.org/10.1080/15228916.2021.1984817","url":null,"abstract":"ABSTRACT Most of the business models and theories available to assist organizations in adapting their strategies to today’s dynamic business environment are based on the Anglo-Saxon worldview. Yet most scholars acknowledge that these theories have limited application in cultures outside of the Anglo-Saxon world. There is a dearth of research that infuses Western conceived theories of management with indigenous ontologies. To close this gap, this paper discusses managing change from an African perspective with specific reference to sub-Saharan Africa. It utilizes the philosophy Ubuntu that pervades the subcontinent as the bedrock on which change management can be anchored, asserting that embracing the Ubuntu values offers the best outcomes for managing organizations in Africa. Using Kurt Lewin’s change management model, the paper shows how incorporating the indigenous ontologies based on ubuntu in its execution can lead to sustainable change management in the sub-continent.","PeriodicalId":46981,"journal":{"name":"Journal of African Business","volume":"23 1","pages":"1029 - 1048"},"PeriodicalIF":1.9,"publicationDate":"2021-10-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44747936","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-10-21DOI: 10.1080/15228916.2021.1962156
M. D. Watabaji, Arega Shumetie
ABSTRACT The aim of this study is to investigate the interactions among political instability, corruption and enterprise performance in some selected African countries. Survey data collected by the World Bank from 5,780 enterprises in 2013 and 3,616 enterprises in 2016 from some 18 African countries were used for this study. Descriptive statistics and econometric models were employed for data analysis. We found that covariates such as corruption, power outage, budget and time allotted for R&D, participation in foreign markets, and provision of formal training to employees showed greasing effects on the wheels of enterprise performance in Africa, due to poor functioning of the institutions. On the other hand, political instability and being confined to domestic markets have mediating sanding effects on enterprise performance. The originality and relevance of this study are based on its novelty to establishing a nexus among corruption, political instability and enterprise performance in African context based on survey data collected from 18 African countries and thus providing a new insight on the causal relationships among these key variables.
{"title":"Political Instability, Corruption and Enterprise Performance Nexus: Lessons and Policy Implications for Some Selected African Countries","authors":"M. D. Watabaji, Arega Shumetie","doi":"10.1080/15228916.2021.1962156","DOIUrl":"https://doi.org/10.1080/15228916.2021.1962156","url":null,"abstract":"ABSTRACT The aim of this study is to investigate the interactions among political instability, corruption and enterprise performance in some selected African countries. Survey data collected by the World Bank from 5,780 enterprises in 2013 and 3,616 enterprises in 2016 from some 18 African countries were used for this study. Descriptive statistics and econometric models were employed for data analysis. We found that covariates such as corruption, power outage, budget and time allotted for R&D, participation in foreign markets, and provision of formal training to employees showed greasing effects on the wheels of enterprise performance in Africa, due to poor functioning of the institutions. On the other hand, political instability and being confined to domestic markets have mediating sanding effects on enterprise performance. The originality and relevance of this study are based on its novelty to establishing a nexus among corruption, political instability and enterprise performance in African context based on survey data collected from 18 African countries and thus providing a new insight on the causal relationships among these key variables.","PeriodicalId":46981,"journal":{"name":"Journal of African Business","volume":"23 1","pages":"907 - 924"},"PeriodicalIF":1.9,"publicationDate":"2021-10-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49627350","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-10-15DOI: 10.1080/15228916.2021.1969191
Francis Donkor, Isaac Sekyere, Frank Akwasi Oduro
ABSTRACT The purpose of this research is to investigate the psychological mechanisms that cause the influence of transformational and transactional leadership on employee performance. Based on employee stewardship theory (EST) and social exchange theory (SET), an organizational commitment was selected as a perfect moderating variable to conduct the study. The data were collected from sixteen (16) organizations in the public sector of Ghana, consisting of 330 full-time employees. The results indicate that organizational commitment positively moderates transformational leadership while transactional leadership does not. We realized that when transformational leadership is high, organizational commitment goes up, thereby increasing employee performance. On the other hand, when transactional leadership goes up, organizational commitment decreases, causing employees performance to dwindle. Therefore, transactional leaders should augment their approach with transformational leadership to increase employee performance. This research offers practical implications relevant to provide strategies for leaders to PSOs to influence employees to perform beyond the limit.
{"title":"Transformational and Transactional Leadership Styles and Employee Performance in Public Sector Organizations in Africa: A Comprehensive Analysis in Ghana","authors":"Francis Donkor, Isaac Sekyere, Frank Akwasi Oduro","doi":"10.1080/15228916.2021.1969191","DOIUrl":"https://doi.org/10.1080/15228916.2021.1969191","url":null,"abstract":"ABSTRACT The purpose of this research is to investigate the psychological mechanisms that cause the influence of transformational and transactional leadership on employee performance. Based on employee stewardship theory (EST) and social exchange theory (SET), an organizational commitment was selected as a perfect moderating variable to conduct the study. The data were collected from sixteen (16) organizations in the public sector of Ghana, consisting of 330 full-time employees. The results indicate that organizational commitment positively moderates transformational leadership while transactional leadership does not. We realized that when transformational leadership is high, organizational commitment goes up, thereby increasing employee performance. On the other hand, when transactional leadership goes up, organizational commitment decreases, causing employees performance to dwindle. Therefore, transactional leaders should augment their approach with transformational leadership to increase employee performance. This research offers practical implications relevant to provide strategies for leaders to PSOs to influence employees to perform beyond the limit.","PeriodicalId":46981,"journal":{"name":"Journal of African Business","volume":"23 1","pages":"945 - 963"},"PeriodicalIF":1.9,"publicationDate":"2021-10-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47559491","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-10-09DOI: 10.1080/15228916.2021.1975488
George Tweneboah, M. Asamoah, Peterson Owusu Junior
ABSTRACT This study sets out to explore the predictability of global foreign exchange rates vis-à-vis the South African rand using daily nominal exchange rates from January 2010 to February 2018. The estimation techniques include automatic portmanteau test, wild bootstrap variance ratio test, Dominguez–Lobato test for martingale difference hypothesis, and generalized spectral tests. We investigate the time-varying predictability by employing the fixed-length rolling window approach. The full sample results indicate significant predictability of some exchange rates while some suggest no predictability. The rolling window approach established that all the foreign exchange markets go through episodes of significant predictability and episodes of unpredictability. The currency investment space is dynamic and that makes it imperative for market participants to be adaptable.
{"title":"On Exchange Rate Predictability and Adaptive Market Hypothesis in South Africa","authors":"George Tweneboah, M. Asamoah, Peterson Owusu Junior","doi":"10.1080/15228916.2021.1975488","DOIUrl":"https://doi.org/10.1080/15228916.2021.1975488","url":null,"abstract":"ABSTRACT This study sets out to explore the predictability of global foreign exchange rates vis-à-vis the South African rand using daily nominal exchange rates from January 2010 to February 2018. The estimation techniques include automatic portmanteau test, wild bootstrap variance ratio test, Dominguez–Lobato test for martingale difference hypothesis, and generalized spectral tests. We investigate the time-varying predictability by employing the fixed-length rolling window approach. The full sample results indicate significant predictability of some exchange rates while some suggest no predictability. The rolling window approach established that all the foreign exchange markets go through episodes of significant predictability and episodes of unpredictability. The currency investment space is dynamic and that makes it imperative for market participants to be adaptable.","PeriodicalId":46981,"journal":{"name":"Journal of African Business","volume":"23 1","pages":"984 - 1008"},"PeriodicalIF":1.9,"publicationDate":"2021-10-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45113866","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-10-07DOI: 10.1080/15228916.2021.1984818
Mac Junior Abeka, E. Amoah, Michael Owusu Appiah, J. Gatsi, Nathaniel Kwapong Obuobi, E. Boateng
ABSTRACT This study investigates the role of economic and political institutions as drivers of renewable energy production in Africa. To achieve this, the study employs panel data of 41 African countries from 2000 to 2017. To deal with endogeneity challenges associated with panel data, we use the two-step Systems Generalized Method of Moments (SGMM). Generally, we find evidence that robust economic institutions are relevant to increasing the level of renewable energy production in Africa. Second, the disaggregated measures of economic institutions show that both size of government and Freedom to trade internationally have a positive effect on renewable energy production. On the contrary, an increase in legal system and property rights reduces the level of renewable energy production. Third, the study finds that political institutions moderate the relationship between economic institutions and renewable energy production. Therefore, toward the goal of promoting SDG 12, governments in Africa should actively strengthen economic institutions to enhance responsible production of energy. However, such efforts will be much more fruitful if the level of political institutions is also strengthened.
{"title":"Economic Institutions, Political Institutions and Renewable Energy Production in Africa","authors":"Mac Junior Abeka, E. Amoah, Michael Owusu Appiah, J. Gatsi, Nathaniel Kwapong Obuobi, E. Boateng","doi":"10.1080/15228916.2021.1984818","DOIUrl":"https://doi.org/10.1080/15228916.2021.1984818","url":null,"abstract":"ABSTRACT This study investigates the role of economic and political institutions as drivers of renewable energy production in Africa. To achieve this, the study employs panel data of 41 African countries from 2000 to 2017. To deal with endogeneity challenges associated with panel data, we use the two-step Systems Generalized Method of Moments (SGMM). Generally, we find evidence that robust economic institutions are relevant to increasing the level of renewable energy production in Africa. Second, the disaggregated measures of economic institutions show that both size of government and Freedom to trade internationally have a positive effect on renewable energy production. On the contrary, an increase in legal system and property rights reduces the level of renewable energy production. Third, the study finds that political institutions moderate the relationship between economic institutions and renewable energy production. Therefore, toward the goal of promoting SDG 12, governments in Africa should actively strengthen economic institutions to enhance responsible production of energy. However, such efforts will be much more fruitful if the level of political institutions is also strengthened.","PeriodicalId":46981,"journal":{"name":"Journal of African Business","volume":"23 1","pages":"1049 - 1066"},"PeriodicalIF":1.9,"publicationDate":"2021-10-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43540832","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-10-02DOI: 10.1080/15228916.2021.1954447
Paul Agu Igwe, Chinedu Ochinanwata
ABSTRACT The achievement of business sustainability is dependent on the interacting components of the entrepreneurship ecosystem (EE) and institutions that support or challenge the business environment. Given the importance of the informal economy in developing economies, we need to rethink how to start an informal entrepreneurial revolution. This article examines the nexus of the informal entrepreneurial ecosystem, from the perspective of ecological resilience. Specifically, the article analyzes the significant differences between the formal sector, the informal sector, frugal innovations, and the supportive ecosystem resilience that produces unparalleled enthusiasm. Conceptually, this article developed propositions and a model of Productive and Unproductive EE explaining the business environment and the interacting predictors from the African regional context. Arguably, as entrepreneurial education and skills increases, there is more likelihood of the creation of formal ventures and growth-oriented micro, small and medium enterprises (MSMEs). These have implications for economic growth and – in the case of African economies – moving the informal to formal economy.
{"title":"How to start African Informal entrepreneurial revolution?","authors":"Paul Agu Igwe, Chinedu Ochinanwata","doi":"10.1080/15228916.2021.1954447","DOIUrl":"https://doi.org/10.1080/15228916.2021.1954447","url":null,"abstract":"ABSTRACT The achievement of business sustainability is dependent on the interacting components of the entrepreneurship ecosystem (EE) and institutions that support or challenge the business environment. Given the importance of the informal economy in developing economies, we need to rethink how to start an informal entrepreneurial revolution. This article examines the nexus of the informal entrepreneurial ecosystem, from the perspective of ecological resilience. Specifically, the article analyzes the significant differences between the formal sector, the informal sector, frugal innovations, and the supportive ecosystem resilience that produces unparalleled enthusiasm. Conceptually, this article developed propositions and a model of Productive and Unproductive EE explaining the business environment and the interacting predictors from the African regional context. Arguably, as entrepreneurial education and skills increases, there is more likelihood of the creation of formal ventures and growth-oriented micro, small and medium enterprises (MSMEs). These have implications for economic growth and – in the case of African economies – moving the informal to formal economy.","PeriodicalId":46981,"journal":{"name":"Journal of African Business","volume":"22 1","pages":"514 - 531"},"PeriodicalIF":1.9,"publicationDate":"2021-10-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46226877","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-09-17DOI: 10.1080/15228916.2021.1977563
S. Mayanja, J. Ntayi, M. Omeke, M. M. Kibirango, Henry Mutebi
ABSTRACT This paper used a quantitative cross-sectional survey design to collect data from 228 small and medium enterprises (SMEs) in Uganda to test the mediating role ecologies of innovation in the relationship between symbiotic resonance, nexus of generative influence and opportunity exploitation, but also, the moderating role of firm size in the relationship between symbiotic resonance and ecologies of innovation. The mediated – moderated hypotheses were tested through Partial Least Square Structural Equation Modeling (PLS-SEM) using SmartPLS version 3.3.0. The study found that ecologies of innovation positively and significantly mediate the relationship between nexus of generative influence and opportunity exploitation. Additionally, we confirmed that firm size moderates the relationship between symbiotic resonance and ecologies of innovation. Managers of SMEs and policy makers should pay more attention to situations where the owner/manager can act as a leader to influence employees positively, create an enabling environment, provide feedback, allow employee to deviate from norms.
{"title":"Symbiotic Resonance, Nexus of Generative Influence, Ecologies of Innovation and Opportunity Exploitation among Small and Medium Enterprises","authors":"S. Mayanja, J. Ntayi, M. Omeke, M. M. Kibirango, Henry Mutebi","doi":"10.1080/15228916.2021.1977563","DOIUrl":"https://doi.org/10.1080/15228916.2021.1977563","url":null,"abstract":"ABSTRACT This paper used a quantitative cross-sectional survey design to collect data from 228 small and medium enterprises (SMEs) in Uganda to test the mediating role ecologies of innovation in the relationship between symbiotic resonance, nexus of generative influence and opportunity exploitation, but also, the moderating role of firm size in the relationship between symbiotic resonance and ecologies of innovation. The mediated – moderated hypotheses were tested through Partial Least Square Structural Equation Modeling (PLS-SEM) using SmartPLS version 3.3.0. The study found that ecologies of innovation positively and significantly mediate the relationship between nexus of generative influence and opportunity exploitation. Additionally, we confirmed that firm size moderates the relationship between symbiotic resonance and ecologies of innovation. Managers of SMEs and policy makers should pay more attention to situations where the owner/manager can act as a leader to influence employees positively, create an enabling environment, provide feedback, allow employee to deviate from norms.","PeriodicalId":46981,"journal":{"name":"Journal of African Business","volume":"23 1","pages":"1009 - 1028"},"PeriodicalIF":1.9,"publicationDate":"2021-09-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48202360","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-09-07DOI: 10.1080/15228916.2021.1962157
M. Stack, E. Amissah
ABSTRACT Using logit regression on firm-level survey data, this study examines the effects of various aspects of the business environment on foreign firm participation in Ghana. An analysis of the main constraints on non-mining foreign investment is important in terms of prioritizing reforms of the overall business environment. In addition, assessing the variation of effects according to different firm characteristics matters for government policy formulation aimed at incentivizing sub-categories of foreign firms. The findings suggest that financial factors (access to finance) and institutional factors (the judicial system and land access) are most important in constraining the probability of foreign investment. Distinct effects are obtained depending on firm characteristics relating to the degree of foreign ownership, the size of the firm and the industry in which the firm operates. The effects of the business environment also vary according to the firm’s regional location.
{"title":"The Presence of Foreign Firms in Ghana: The Role of Financial, Infrastructural and Institutional Constraints","authors":"M. Stack, E. Amissah","doi":"10.1080/15228916.2021.1962157","DOIUrl":"https://doi.org/10.1080/15228916.2021.1962157","url":null,"abstract":"ABSTRACT Using logit regression on firm-level survey data, this study examines the effects of various aspects of the business environment on foreign firm participation in Ghana. An analysis of the main constraints on non-mining foreign investment is important in terms of prioritizing reforms of the overall business environment. In addition, assessing the variation of effects according to different firm characteristics matters for government policy formulation aimed at incentivizing sub-categories of foreign firms. The findings suggest that financial factors (access to finance) and institutional factors (the judicial system and land access) are most important in constraining the probability of foreign investment. Distinct effects are obtained depending on firm characteristics relating to the degree of foreign ownership, the size of the firm and the industry in which the firm operates. The effects of the business environment also vary according to the firm’s regional location.","PeriodicalId":46981,"journal":{"name":"Journal of African Business","volume":"23 1","pages":"925 - 944"},"PeriodicalIF":1.9,"publicationDate":"2021-09-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45895688","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-09-01DOI: 10.1080/15228916.2021.1969192
P. A. Atitianti, Q. Dai
ABSTRACT This paper assesses the impact of Chinese foreign direct investment (FDI) on welfare in African economies using recently available data on Chinese FDI in 52 African countries between 2003 and 2018. Using fixed effects and instrumental variable (IV) estimations, we find that Chinese FDI contributes significantly to the improvement of welfare in African countries. This positive impact also holds for the sub-sample of Sub-Saharan African (SSA) countries. The results are robust across the fixed effects and IV estimations when variables that affect welfare are controlled for. The findings suggest that China’s claim of a “win-win” aim for its rising investment in African countries may hold.
{"title":"Does Chinese Foreign Direct Investment Improve the Welfare of Africans?","authors":"P. A. Atitianti, Q. Dai","doi":"10.1080/15228916.2021.1969192","DOIUrl":"https://doi.org/10.1080/15228916.2021.1969192","url":null,"abstract":"ABSTRACT This paper assesses the impact of Chinese foreign direct investment (FDI) on welfare in African economies using recently available data on Chinese FDI in 52 African countries between 2003 and 2018. Using fixed effects and instrumental variable (IV) estimations, we find that Chinese FDI contributes significantly to the improvement of welfare in African countries. This positive impact also holds for the sub-sample of Sub-Saharan African (SSA) countries. The results are robust across the fixed effects and IV estimations when variables that affect welfare are controlled for. The findings suggest that China’s claim of a “win-win” aim for its rising investment in African countries may hold.","PeriodicalId":46981,"journal":{"name":"Journal of African Business","volume":"23 1","pages":"964 - 983"},"PeriodicalIF":1.9,"publicationDate":"2021-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"59837390","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-08-24DOI: 10.1080/15228916.2021.1962155
B. Kusi, Lord Mensah, E. Agbloyor
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.
{"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":"https://doi.org/10.1080/15228916.2021.1962155","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":1.9,"publicationDate":"2021-08-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49013650","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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