Bank Ownership Types and Liquidity Creation: Evidence from Ghana

Kusi, Baah Aye; Kriese, Maryam; Nabieu, Gladys Awinpoak Abindaw; Agbloyor, Elikplimi Komla

doi:10.1080/15228916.2021.1889872

Cited by 8 publications

(11 citation statements)

References 36 publications

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“…That study used a sample of commercial banks from 17 western European countries from 2004 to 2018, finding that state-owned banks tend to create more liquidity than private banks. Kusi et al (2021) found similar results, whererin privately owned banks are less likely to create more liquidity compared to their state-owned bank because policymakers may push liquidity creation through state-owned banks. The finding of this study is similar to the results found in Chen et al (2015) 's study of state ownership, wherein the author found that state ownership was an essential determinant of liquidity.…”

Section: Resultsmentioning

confidence: 68%

Basel III standards and liquidity determinants in Vietnamese commercial bank

Le-Bao,

Ho,

Lang

2023

JEECAR

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This study aims to ascertain the determinants affecting the liquidity of Vietnamese Commercial Banks by their bank ownership structures, CEO characteristics, and bank-specific variables. Using panel data consisting of 29 Vietnamese commercial banks, we measure liquidity using the most up-to-date method – the Net Stable Funding Difference (NSFD), according to Basel III standards. Correlating to the relationship between CEOs’ characteristics and bank liquidity, we found that CEOs with longer tenure will control liquidity better due to their higher managerial power and entrenchment. Moreover, the findings of the present study show that local market power, bank age, bank size, and loan loss provision positively impact bank liquidity. In contrast, further investigation reveals the adverse impact of state ownership on bank liquidity. This study provides insights into the prudential supervision of Vietnamese commercial banks, which implications for policymakers, by applying the latest liquidity measurement method and new findings on liquidity determinants.

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Section: Resultsmentioning

confidence: 68%

Basel III standards and liquidity determinants in Vietnamese commercial bank

Le-Bao,

Ho,

Lang

2023

JEECAR

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“…providing a system for monitoring economic activities; executing government policies; collecting tax revenue for the government; and granting credit/loans to formal enterprises (Kusi et al, 2022;Lay, 2020;Cooray, 2009).…”

Section: Literature Review: Theoretical and Conceptualmentioning

confidence: 99%

“…Focusing on the financial market development literature, the modern theory of financial intermediation advances that financial intermediation activities undertaken by financial institutions are aimed at facilitating economic activities and efficiency, implementing government policies and granting creating credit to real economy for economic growth (Gyeke-Dako et al , 2021; Allen and Santomero, 1997). Thus, a modern theory of financial intermediation is focused on justifying economy-wide functions of financial institutions, which include: providing a system for monitoring economic activities; executing government policies; collecting tax revenue for the government; and granting credit/loans to formal enterprises (Kusi et al , 2022; Lay, 2020; Cooray, 2009). …”

Section: Literature Review: Theoretical and Conceptualmentioning

confidence: 99%

Exploring the nonlinear effect of shadow economies on sustainable development in Africa: does the level of financial market development matter?

Kusi

2023

JFEP

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Purpose This study aims to examine the nonlinear threshold effect of shadow economy on sustainable development in Africa while providing additional evidence on how this nonlinear threshold effect play out in economies with high and low developed financial/credit markets. Design/methodology/approach This study uses 37 African economies between 2009 and 2017 in a dynamic GMM panel model that controls for country, year and technological effects to ensure consistency and reliability of results and findings. Findings The results reveal that there is an inverted nonlinear U-shape nexus between the size of shadow economy and sustainable development in both short run and long run in Africa and across economies with high and low developed credit/financial market. Also, the threshold points beyond which the size of shadow economies dampens sustainable development is lower for economies with high financial/credit market development and higher in the long run. Practical implications These results have policy implications and recommendations and suggest that shadow economies can be beneficial to sustainable development particularly when the size of shadow economies are restrained from increasing beyond certain thresholds/levels. Moreso, to restrict the adverse effect of shadow economies on sustainable development, policymakers can rely on developing their financial/credit markets to tame the destructive nature of shadow economies on sustainable development. These results are robust to technological, year/time and country effects. Originality/value To the best of the author’s knowledge, this study examines for the first in the context of Africa, the nonlinear effect of shadow economies on sustainable development under low and high developed financial markets.

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“…This role tends to facilitate economic activities and value creation in the economic system. Interestingly, banking institutions create liquidity for deficit spending units by lending to them the mobilized funds to engage in value creating economic ventures and activities (Kusi et al, 2021;Berger and Sedunov, 2017). In the practice and administration of bank lending, it is clear that banks lend to different categories of entities and persons and hence classify their loan portfolio into aggregate loans (gross and net loans), corporate loans, commercial loans, interbank loans, consumer loans and other loan types.…”

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

What drives bank lending? A closer look at bank lending types in Africa

Ayagre

Dzeha

Kriese

et al. 2022

AJEMS

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PurposeIn this study, the authors present unique evidence on bank lending types by paying particular attention to the factors that drive the different types of bank lending in Africa using bank level data.Design/methodology/approachIn presenting such evidence, the study employs a robust fixed effect panel data with year and technological controls comprising 57 banks from 29 African economies between 2006 and 2015.FindingsThe results show that different factors affect different bank lending types differently in Africa. Specifically, while the authors find that total or aggregate bank lending is positively driven by bank capitalization and spread but negatively driven by bank size, corporate and commercial bank lending is positively driven by bank size, spread, inflation, elections and extent of business disclosure but negatively driven by bank capitalization, loan loss reserves, operational cost and gross domestic product per capita. Moreover, interbank lending is both negatively and positively driven by bank capitalization and size, respectively, while other bank lending type is driven positively by financial crisis but negatively driven by bank size, inflation and extent of business disclosure. Finally, retail and consumer lending is positively driven by bank capitalization, loan loss reserves and spread while negatively driven by bank size and inflation.Practical implicationsThese imply that bank managers, regulators, policymakers and researchers must begin to see each bank lending category separately and independently since varying factors influence the different categories of bank lending differently.Originality/valueThe study presents new insights into how different factors determine different lending types in Africa for the first time to the best of the authors’ knowledge.

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Bank Ownership Types and Liquidity Creation: Evidence from Ghana

Cited by 8 publications

References 36 publications

Basel III standards and liquidity determinants in Vietnamese commercial bank

Basel III standards and liquidity determinants in Vietnamese commercial bank

Exploring the nonlinear effect of shadow economies on sustainable development in Africa: does the level of financial market development matter?

What drives bank lending? A closer look at bank lending types in Africa

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