Ghanaian Journal of Economics - Volume 1, Issue 1, 2013
Volume 1, Issue 1, 2013
Source: Ghanaian Journal of Economics 1, pp 4 –34 (2013)More Less
The Ghanaian economy has been on an upward trajectory over the past three decades, yet a number of challenges bedevil growth, redistribution and sustainability. After 56 years of independence, the need for a formal academic and practitioner forum for engaging minds on the past, present and future state of the economy has been lurking in the background. The birth of the Ghanaian Journal of Economics is a response to this urgent quest, providing a platform for cutting edge research on the Ghanaian economy and similar other economies to inform policy design and implementation. As the maiden issue, this review article seeks to retrace developments in the economy a few steps back to bring readers up to date on current state of research. The review is historical, and the scope is to synthesize the diverse developments in the Ghanaian economy within the confines of a relatively brief article. This article is thus not an exhaustive treatment of the topic, and it does not cover all the esoteric details of the Ghanaian economy. In the end, however, we hope to offer some perspectives on the literature for readers of the journal, investors, managers of the economy, regulators and academics while also providing a roadmap for future research endeavours.
Source: Ghanaian Journal of Economics 1, pp 35 –51 (2013)More Less
Efficient management of working capital guarantees not only the future cash flow of a firm but also its profitability. This study attempts to find out the determinants of working capital requirements and working capital management policies in the Ghanaian Banking Industry. The study used bank level data (1999-2008) from the Bank of Ghana. Using panel methodology within the random or fixed effects framework, the study concluded that while Cash Conversion Cycle, Size and Age of a bank have significantly positive impact on bank working capital requirement, leverage, cash position and deposit herfindahl index have a significantly negative effect on bank working capital requirement. Profitability, cash position, growth size and deposit herfindahl index are found to be the key determinants of working capital policies of banks in Ghana. Consequently, the study finds support for the pecking order and agency theories even though no support was found for the lifecycle theory. Thus to ensure efficient working capital management, banks in Ghana would be better off pursuing growth strategies geared towards obtaining greater proportion of the banking market and issue more short term debt instruments.
Source: Ghanaian Journal of Economics 1, pp 52 –66 (2013)More Less
The random walk behaviour of exchange rates in Ghana is explored by employing parametric and non-parametric variance ratio tests based on ranks and signs. The paper fills an important gap by using various time series techniques to investigate the efficiency of the foreign exchange market in Ghana. The conclusive evidence based on non-parametric variance ratio tests indicates that the behaviour of monthly Cedi/US dollar exchange rates is inconsistent with the random walk process and the weak-form efficient market hypothesis. This supports prior findings of the validity of long-run purchasing power parity and predictability of exchange rates in Ghana.
Author Emmanuel GanidekamSource: Ghanaian Journal of Economics 1, pp 67 –86 (2013)More Less
This paper analysed the factors that influence food prices and the appropriate policy interventions. Using data on recent developments in local and global food prices, the paper argues that local food price increases are driven by adverse weather conditions, poor storage and transport facilities, and policy failures. Furthermore, the evidence from the data analysed showed that, with the exception of imported rice, global food price spikes do not have direct impact on domestic food prices in Ghana. The research also found that both urban and rural dwellers spend more of their income on basic food crops, thus rising domestic food prices tends to deepen the woes of low income earners. Investment in irrigation, good transport and storage facilities, trade reform among others are suggested as policies to ameliorate the situation.
Author Ryan McKerrowSource: Ghanaian Journal of Economics 1, pp 87 –103 (2013)More Less
The efficient markets hypothesis (EMH) posits that current stock prices (returns) are uncorrelated with past stock prices (returns). This means that a price change occurring today must be solely the product of today's news and thus independent of any prior news. With daily news being unpredictable, prices follow a random walk. The result is that speculative investors will be unable to profit from the exploitation of exclusive market knowledge. This paper tests the validity of the random walk model and, by extension, the weak form efficiency of the frontier markets of Botswana, Cote d'Ivoire, Ghana, Mauritius and Namibia. The study fills an existing gap created by a lack of empirical investigation into the efficiency of these markets in recent years. Data on broad-based equity indices are applied and the naïve random walk, the runs test and the multiple variance ratio test results demonstrate varying levels of efficiency when compared with the conclusions reached by existing studies.
Source: Ghanaian Journal of Economics 1, pp 104 –118 (2013)More Less
This paper examines empirically the nexus between stock prices and exchange rates in Ghana using time series models. The Ghana Stock Exchange (GSE) All-Share Index is taken as the composite index for stock prices. The results affirm that there is no causal relationship between the foreign exchange rate (EXR) and stock prices for Ghana.
Source: Ghanaian Journal of Economics 1, pp 119 –137 (2013)More Less
This study examines the forces behind female labour force participation (FLFP) in Ghana by focusing on the role played by fertility and education, for both urban and rural dwellers. Applying a logistic regression to the fifth round of the Ghana Living Standards Survey (GLSS 5) we established that women with basic and tertiary education have a higher propensity of participation compared with those with no education. The results further indicate significant positive marginal effects for women with children, suggesting that having more children increases the likelihood of participation. This observation was more pronounced in the rural urban estimates. The paper suggests that women's labour force participation and home production are complements rather than substitutes considering the dominance of women in self-employment and/or informal sector where women are able to combine work and home production. Moreover, the study established a positive relationship between females in good health and the level of participation, and discusses some policy recommendations to encourage participation of women in the Ghanaian labour force.