The impact of financial developments on economic growth in Ghana: evidence from the manufacturing industries
- Authors: Brafi, Paul Osei
- Date: 2019
- Subjects: Economic development -- Ghana , Finance -- Ghana Manufactures -- Finance -- Ghana
- Language: English
- Type: Thesis , Doctoral , DCom
- Identifier: http://hdl.handle.net/10948/37184 , vital:34135
- Description: This study provides an analysis of financial and growth dynamics with a view to assess the impact of financial development on economic growth in Ghana. The study also examines the extent to which financial developments in Ghana are affecting capital accumulation and industrial sector growth. The analysis was performed by examining the financial development indicators and economic growth data for Ghana over the period from 1965 to 2016. The study was motivated by the theoretical indications that improvements in financial intermediation within the economy can induce growth of the real sector and thus lead to economic growth. There have been notable structural and financial sector reforms in Ghana since the early and late 1980s. The indications in the financial sector portray improvement in the measures of financial development in the post-reform era as compared to the years before. The findings of the study complement existing research findings and information on finance-growth association as well as the influence that finance has on the sources of growth. The study adopted real per capita gross domestic product (GDP) as a measure of economic growth. In addition, three real sector indicators serving as the sources of growth, included; capital accumulation, industrial value-added and manufacturing value added. The analysis also adopts four financial indicators, expressed as percentage shares of GDP, namely; domestic credit to private sector, total domestic credit provided by financial sector, broad money supply and financial sector deposits—as measures of financial development. The analysis of the impact of the financial development on capital accumulation, industrial output growth, manufacturing productivity and economic growth were estimated using the linear regression estimation techniques within the GMM estimation approach. The study, additionally, examined the short-run and long-run impacts of financial development on economic growth indicators by employing the Vector Autoregressive Regression (VAR) within the Autoregressive Distributed Lag (ARDL) approach. The study further assesses the direction of causality between financial development and economic growth indicators using the cointegration and Engle-Granger causality testing approach within VAR models. The Bayesian Vector Auto Regression (BVAR) models were applied to examine the drivers of economic growth and to assess the sensitivity of economic growth to financial development and macro-economic shocks. This assessment was carried out to examine the maximising behaviour of financial development and to find out if there exists threshold point beyond which finance adversely affects economic growth in Ghana. The results showed that credit to private sector shows a strong positive persistence in promoting economic growth in Ghana. The results show that financial development dynamics in Ghana positively affect long run economic growth and further indicate that the rate of impact was relatively higher in the post reform period of 1984 to 2016. The study further found a bi-directional causal association between financial development and economic growth. Regarding the sources of growth, the study found that financial development strongly contributes positively to capital accumulation in the long-term, however, the findings further suggested that, to some extent, the growing size of finance dampens capital formation and economic growth. This suggested the existence of inefficiencies in the expanding size of total credit offered by the financial system in Ghana. The study further found a long-run positive association between financial development and industrial productivity (except for manufacturing) growth in Ghana, with industry growth substantially determined by private credit. The results of the assessment on the sensitivity of economic growth to shocks in financial development indicators show that Ghana ‘s economic growth is, to a larger extent, influenced by domestic credit provided to the private sector. Also, the results showed that economic growth has been highly responsive to macro-economic shocks such as government expenditure and industrial sector growth although industrial growth seems to show a strong negative persistence on Ghana ‘s economy. The results from the analysis of finance and economic growth shows that existence of different optimal growth maximising points domestic credit, broad money, financial sector deposits and the overall financial development ratios as depicted by the various inverted U-shaped relationship between the financial development indicators and economic growth. The optimal size or maximising positions or thresholds for private credit and total credit were found to be at approximately 20.0 per cent and 28.0 per cent of GDP, respectively. On the other hand, the optimal size or minimum positions or thresholds for broad money supply and total financial sector deposits were found to be at approximately 19.0 per cent and 10.0 per cent of GDP, respectively. With regards to broad money supply-to-GDP and financial sector deposit-to-GDP ratios, the respective averages of 23.19 per cent and 13.77 per cent for the period 1965-2015 are higher than the minimum required thresholds of 19.00 per cent and 10.00 per cent, respectively. The findings show that financial developments have a strong positive association with economic growth, but the results also give the indication that although financial development can enhance growth and inefficiencies in the financial system can equally dampen growth at some levels. overall, the study found that financial reforms have positively contributed to economic growth in Ghana and the impacts of financial development on economic growth in Ghana have been higher in the post-reform era. The effect of financial reforms on capital accumulation was not significant although the study established that the impact of structural reforms was strong and adversely affected capital accumulation in Ghana. With regards to the industrial productivity growth, the study found a positive association between financial development and industry growth in Ghana. It was, however, observed that financial reforms have fails to significantly affect growth of industrial productivity and the impact of financial development on industry sector growth in Ghana are low but the sector experienced relatively higher growth in the pre-reform era.
- Full Text:
- Date Issued: 2019
- Authors: Brafi, Paul Osei
- Date: 2019
- Subjects: Economic development -- Ghana , Finance -- Ghana Manufactures -- Finance -- Ghana
- Language: English
- Type: Thesis , Doctoral , DCom
- Identifier: http://hdl.handle.net/10948/37184 , vital:34135
- Description: This study provides an analysis of financial and growth dynamics with a view to assess the impact of financial development on economic growth in Ghana. The study also examines the extent to which financial developments in Ghana are affecting capital accumulation and industrial sector growth. The analysis was performed by examining the financial development indicators and economic growth data for Ghana over the period from 1965 to 2016. The study was motivated by the theoretical indications that improvements in financial intermediation within the economy can induce growth of the real sector and thus lead to economic growth. There have been notable structural and financial sector reforms in Ghana since the early and late 1980s. The indications in the financial sector portray improvement in the measures of financial development in the post-reform era as compared to the years before. The findings of the study complement existing research findings and information on finance-growth association as well as the influence that finance has on the sources of growth. The study adopted real per capita gross domestic product (GDP) as a measure of economic growth. In addition, three real sector indicators serving as the sources of growth, included; capital accumulation, industrial value-added and manufacturing value added. The analysis also adopts four financial indicators, expressed as percentage shares of GDP, namely; domestic credit to private sector, total domestic credit provided by financial sector, broad money supply and financial sector deposits—as measures of financial development. The analysis of the impact of the financial development on capital accumulation, industrial output growth, manufacturing productivity and economic growth were estimated using the linear regression estimation techniques within the GMM estimation approach. The study, additionally, examined the short-run and long-run impacts of financial development on economic growth indicators by employing the Vector Autoregressive Regression (VAR) within the Autoregressive Distributed Lag (ARDL) approach. The study further assesses the direction of causality between financial development and economic growth indicators using the cointegration and Engle-Granger causality testing approach within VAR models. The Bayesian Vector Auto Regression (BVAR) models were applied to examine the drivers of economic growth and to assess the sensitivity of economic growth to financial development and macro-economic shocks. This assessment was carried out to examine the maximising behaviour of financial development and to find out if there exists threshold point beyond which finance adversely affects economic growth in Ghana. The results showed that credit to private sector shows a strong positive persistence in promoting economic growth in Ghana. The results show that financial development dynamics in Ghana positively affect long run economic growth and further indicate that the rate of impact was relatively higher in the post reform period of 1984 to 2016. The study further found a bi-directional causal association between financial development and economic growth. Regarding the sources of growth, the study found that financial development strongly contributes positively to capital accumulation in the long-term, however, the findings further suggested that, to some extent, the growing size of finance dampens capital formation and economic growth. This suggested the existence of inefficiencies in the expanding size of total credit offered by the financial system in Ghana. The study further found a long-run positive association between financial development and industrial productivity (except for manufacturing) growth in Ghana, with industry growth substantially determined by private credit. The results of the assessment on the sensitivity of economic growth to shocks in financial development indicators show that Ghana ‘s economic growth is, to a larger extent, influenced by domestic credit provided to the private sector. Also, the results showed that economic growth has been highly responsive to macro-economic shocks such as government expenditure and industrial sector growth although industrial growth seems to show a strong negative persistence on Ghana ‘s economy. The results from the analysis of finance and economic growth shows that existence of different optimal growth maximising points domestic credit, broad money, financial sector deposits and the overall financial development ratios as depicted by the various inverted U-shaped relationship between the financial development indicators and economic growth. The optimal size or maximising positions or thresholds for private credit and total credit were found to be at approximately 20.0 per cent and 28.0 per cent of GDP, respectively. On the other hand, the optimal size or minimum positions or thresholds for broad money supply and total financial sector deposits were found to be at approximately 19.0 per cent and 10.0 per cent of GDP, respectively. With regards to broad money supply-to-GDP and financial sector deposit-to-GDP ratios, the respective averages of 23.19 per cent and 13.77 per cent for the period 1965-2015 are higher than the minimum required thresholds of 19.00 per cent and 10.00 per cent, respectively. The findings show that financial developments have a strong positive association with economic growth, but the results also give the indication that although financial development can enhance growth and inefficiencies in the financial system can equally dampen growth at some levels. overall, the study found that financial reforms have positively contributed to economic growth in Ghana and the impacts of financial development on economic growth in Ghana have been higher in the post-reform era. The effect of financial reforms on capital accumulation was not significant although the study established that the impact of structural reforms was strong and adversely affected capital accumulation in Ghana. With regards to the industrial productivity growth, the study found a positive association between financial development and industry growth in Ghana. It was, however, observed that financial reforms have fails to significantly affect growth of industrial productivity and the impact of financial development on industry sector growth in Ghana are low but the sector experienced relatively higher growth in the pre-reform era.
- Full Text:
- Date Issued: 2019
Parental influences on the next generation’s intention to join the family business
- Authors: Saunders, Shelley Beryl
- Date: 2018
- Subjects: Family-owned business enterprises -- Succession , Family-owned business enterprises -- Management Family corporations -- Management Success in business
- Language: English
- Type: Thesis , Doctoral , DCom
- Identifier: http://hdl.handle.net/10948/35072 , vital:33612
- Description: Family businesses play an important role worldwide and in South Africa, in terms of their economic contribution and their ability to create jobs. However, the unwillingness of next generation family members (NGFMs) to join the family business seriously jeopardises its long-term survival. This is a matter of great concern for family business owners who in general have a strong desire to pass on the business to the next generation and to preserve the family’s legacy. Of the many factors relating to a person’s choice of career, parents are by far the most influential. Against this background, the purpose of this study was to gain a better understanding of the influence that parents have on the NGFM’s intentions to join the family business as well as the factors that moderate this influence. Establishing how parents influence an NGFM’s intention to join the family business makes an important theoretical contribution to family business, succession and entrepreneurial literatures, and holds both practical and theoretical relevance. The literature review provided an overview of the field of family business and discussed the nature of these businesses. Several frameworks, theories and perspectives relating to family businesses were elaborated on. The important role that family businesses play in the economies of countries and the unique challenges they face were highlighted. One of the most important challenges facing family businesses is that of transgenerational succession and the willingness of the next generation to make the family business their career choice. Several behaviour and career choice theories were discussed, particularly in relation to the South African context, and a summary of all the factors influencing career choice in terms of these theories was presented. Several parental influences on career choice were identified and examined in detail, namely Parent–child relationship, Parents’ job characteristics, Parental financial security, Parental job satisfaction, Parental identification, Parental expectations, Parental support and Parental style. Additionally, the influence of each parental influences on NGFMs, in a family business context, was highlighted. Based on anecdotal and empirical support, these parental influences were hypothesised as influencing the dependent variable in this study, namely Intention to join the family business. Based on the social cognitive career theory, Self-efficacy and Outcome expectations were hypothesised as moderating the aforementioned relationships. This study adopted a positivist research paradigm and a quantitative methodological approach that was deductive in nature. The methodology adopted to collect primary data was a cross-sectional analytical survey. A structured questionnaire was distributed to respondents who were identified by means of judgemental sampling and 453 completed questionnaires were subjected to statistical analysis. The validity of the scales measuring the dependent, moderating and independent variables was assessed by means of factor analysis and the reliability thereof by calculating Cronbach’s alpha coefficients. Both descriptive and inferential statistics were calculated. Multiple regression analysis (MRA) was used to assess the hypothesised relationships. The findings show that only one third of the respondents agreed that they had Intentions to join the family business. Furthermore, the results of the MRA reported significant and positive relationships between the independent variables Parental expectations, Perceived parental outcomes, and Parental identification, and the dependent variable Intention to join the family business. The results of the moderated regression analysis revealed that Self-efficacy and Outcome expectations do not moderate the relationships between all the parental influences investigated and Intention to join the family business as hypothesised. However, a significant positive relationship at the ten per cent confidence level was reported between the interaction effect, Self-efficacy x Perceived parental outcomes, and Intention to join the family business. A significant positive relationship at the five per cent confidence level was also reported between the interaction effect Outcome expectations x Parental identification, and Intention to join the family business. Based on the findings of this study, numerous recommendations were made. This study makes a contribution to both theory and practice. In terms of theory, the results have highlighted the applicability of both the theory of planned behaviour and the social cognitive career theory in explaining an NGFM’s Intention to join the family business. In addition, the applicability of these theories in the family business context has been confirmed. This study also contributes to the family business literature in that it provides new insights into how parents influence one of family businesses’ biggest challenges, namely their children not wanting to take over the family business. In terms of practice, the findings show that that several of the parental influences investigated do indeed increase the intention of NGFMs to join the family business. It is anticipated that these findings will encourage parents who own family businesses to take note of how they influence their children’s decision whether to join them in the family business, and ultimately to contribute to its possible long-term survival and success.
- Full Text:
- Date Issued: 2018
- Authors: Saunders, Shelley Beryl
- Date: 2018
- Subjects: Family-owned business enterprises -- Succession , Family-owned business enterprises -- Management Family corporations -- Management Success in business
- Language: English
- Type: Thesis , Doctoral , DCom
- Identifier: http://hdl.handle.net/10948/35072 , vital:33612
- Description: Family businesses play an important role worldwide and in South Africa, in terms of their economic contribution and their ability to create jobs. However, the unwillingness of next generation family members (NGFMs) to join the family business seriously jeopardises its long-term survival. This is a matter of great concern for family business owners who in general have a strong desire to pass on the business to the next generation and to preserve the family’s legacy. Of the many factors relating to a person’s choice of career, parents are by far the most influential. Against this background, the purpose of this study was to gain a better understanding of the influence that parents have on the NGFM’s intentions to join the family business as well as the factors that moderate this influence. Establishing how parents influence an NGFM’s intention to join the family business makes an important theoretical contribution to family business, succession and entrepreneurial literatures, and holds both practical and theoretical relevance. The literature review provided an overview of the field of family business and discussed the nature of these businesses. Several frameworks, theories and perspectives relating to family businesses were elaborated on. The important role that family businesses play in the economies of countries and the unique challenges they face were highlighted. One of the most important challenges facing family businesses is that of transgenerational succession and the willingness of the next generation to make the family business their career choice. Several behaviour and career choice theories were discussed, particularly in relation to the South African context, and a summary of all the factors influencing career choice in terms of these theories was presented. Several parental influences on career choice were identified and examined in detail, namely Parent–child relationship, Parents’ job characteristics, Parental financial security, Parental job satisfaction, Parental identification, Parental expectations, Parental support and Parental style. Additionally, the influence of each parental influences on NGFMs, in a family business context, was highlighted. Based on anecdotal and empirical support, these parental influences were hypothesised as influencing the dependent variable in this study, namely Intention to join the family business. Based on the social cognitive career theory, Self-efficacy and Outcome expectations were hypothesised as moderating the aforementioned relationships. This study adopted a positivist research paradigm and a quantitative methodological approach that was deductive in nature. The methodology adopted to collect primary data was a cross-sectional analytical survey. A structured questionnaire was distributed to respondents who were identified by means of judgemental sampling and 453 completed questionnaires were subjected to statistical analysis. The validity of the scales measuring the dependent, moderating and independent variables was assessed by means of factor analysis and the reliability thereof by calculating Cronbach’s alpha coefficients. Both descriptive and inferential statistics were calculated. Multiple regression analysis (MRA) was used to assess the hypothesised relationships. The findings show that only one third of the respondents agreed that they had Intentions to join the family business. Furthermore, the results of the MRA reported significant and positive relationships between the independent variables Parental expectations, Perceived parental outcomes, and Parental identification, and the dependent variable Intention to join the family business. The results of the moderated regression analysis revealed that Self-efficacy and Outcome expectations do not moderate the relationships between all the parental influences investigated and Intention to join the family business as hypothesised. However, a significant positive relationship at the ten per cent confidence level was reported between the interaction effect, Self-efficacy x Perceived parental outcomes, and Intention to join the family business. A significant positive relationship at the five per cent confidence level was also reported between the interaction effect Outcome expectations x Parental identification, and Intention to join the family business. Based on the findings of this study, numerous recommendations were made. This study makes a contribution to both theory and practice. In terms of theory, the results have highlighted the applicability of both the theory of planned behaviour and the social cognitive career theory in explaining an NGFM’s Intention to join the family business. In addition, the applicability of these theories in the family business context has been confirmed. This study also contributes to the family business literature in that it provides new insights into how parents influence one of family businesses’ biggest challenges, namely their children not wanting to take over the family business. In terms of practice, the findings show that that several of the parental influences investigated do indeed increase the intention of NGFMs to join the family business. It is anticipated that these findings will encourage parents who own family businesses to take note of how they influence their children’s decision whether to join them in the family business, and ultimately to contribute to its possible long-term survival and success.
- Full Text:
- Date Issued: 2018
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