WRITING RESEARCH WITH “EASE” (PART 1)

AN ADVENTURE

Research is not a straight forward process, it is iterative. Personally, I believe every good researcher has a “daring spirit, a focused mind and a determined heart”. In fact, sometimes you could stay long hours before your study desk without writing a word or in most cases write pages that you later delete. Yet, just stay focused, this has been the process that produced great scientists, researchers, academics, policymakers, theorists, and experts of all sorts. This article aims to provide an interactive guidance to the process of conducting research from the scratch.

Whenever you get confused, remember this quote from one of the 2019 Nobel Prize Laureates, Professor Esther Duflo.

“So that part had been easy. But I had experienced a brush with despair when trying to write a required term paper for the econometrics class. My first idea for a topic had been rather vague; I had run some regressions, but I was stuck when it came to interpreting what they meant. Two or three weeks before the paper was due, I decided that it could not possibly be a paper, and I had to either find an interpretation or change topic. For about a week, I could not do either and I was totally paralyzed. Finally, I decided to replicate a paper using a different data set. But that week had left a strong doubt in my mind that I could really do research for a living.” Read full here

GETTING STARTED

The first thing to do is to have a clear idea you wish to explore. This should be situated in the context you wish to conduct the study in. For instance, while Integrated Reporting is a topical issue in corporate reporting, Ghanaian microfinance companies do not at the moment have the capacity to produce such reports and so they do not produce it. It will therefore be impossible to examine the integrated reporting practices of Ghanaian microfinance companies. So, get a real-life situation of interest and aim to look for theories and literature around it.

The next thing to do is to explore some key research papers related to your topic. At this point, look out for 10 key research papers-related in methodology, issue, level of analysis or context if possible. At this point, I advise you google search “ABS 2018 journal raking pdf”. Download the pdf file which is a recognized listing of journal papers of international repute. Look out for the best papers at this point, since a poor work done will negatively affect any other thing you will do later. More so, aim to look for current studies which are at most 3 years old. In no instance should you be downloading incomplete referenced items and studies in predatory journals. Personally, I would be looking out for 3-star and 4-star journals in my area of study. Also, look out for review papers – these are studies that provide a discussion of earlier studies in the area you are studying. It is usually an easy way to get a general idea about any area you are studying. If you are able to obtain a new review paper, you will be able to get a lot of research gaps and areas that has not been researched. It is a jackpot of ideas, a tower you can stand on to re-search something that will surely be of interest or novel.

A GUIDE FOR YOUR CONTENT ANALYSIS- PART 1

Doing research is mostly not straight forward. There are smooth times and there are times where little or no progress is made. In all times, you are supposed to ensure that you are reading on your topic, downloading a paper, looking for data, gathering data, reading a paper or searching something on your topic. Even Harvard and Stanford professors will admit that the process is not straight forward. You are not alone!!!!!

Research Question as a Guide for Methodology

The sort of phenomenon you aim to study will determine the methodology you can use to achieve your aim. More essentially, framing your research question should be a guide for you. If your aim is to understand a phenomenon by understanding the why and the how, exploring the meanings, you should be looking at qualitative approach (meaning-oriented content analysis). However, if you are exploring the relationship between two or more variables, then you are following quantitative approach (form-oriented content analysis).

Meaning-Oriented Content Analysis

A recent study used the meaning-oriented context analysis to examine whether Shell Nigeria’s Global Memorandum of Understanding (GMoU) promotes corporate-community accountability as a basis for fostering sustainable community development in the Niger Delta.

The research question in this case could be:

How does Shell Nigeria’s Global Memorandum of Understanding (GMoU) promote corporate-community accountability as a basis for fostering sustainable community development in the Niger Delta?

There is no need for mathematics or relationship building in this case. The aim is to understand how Shell execute its social contract mandate. When you read the full study into detail, you will find out that the authors take the various statements made by Shell as contained in its GMoU from 2010 to 2013. This is 3 years report of a single entity and so we cannot use this small sample for form-oriented analysis since the sample size is small. Notwithstanding, the author explored the various meanings behind the commitments by Shell in its GMoU, explored how corporate-community accountability is put in action to foster sustainable community development.

In executing the study, quotations are made by the authors and the hidden meanings behind such statements are expounded to draw a theoretical understanding of the phenomenon.

Kindly follow this link to read the full paper: https://doi.org/10.1108/AAAJ-04-2016-2531

Form-Oriented Content Analysis

For the form-oriented content analysis, you are more of a quantitative researcher only that you will not be dwelling more on the hardcore financial figures contained in the financial statements. You want to examine the contents of the annual reports, sustainability reports, CSR reports or other reports of the companies. Let as try and make a hard rule here: Do not use only one company if you want to use form-oriented analyses. Your aim here is to provide a sort of result that will be generalized across the industry, sector or economy you are studying. Do you think you can use how GCB Bank is reporting on SDG goals to generalize what happens in the Ghanaian banking industry when it comes to SDG reporting? Think about other large banks like Ecobank, Standard Chartered Bank, Barclays Bank (now part of ABSA family) and SG-SSB Bank. Also think about the local banks like CBG Bank, UMB Bank and others. So in all, you want to understand the way the reporting is done in big and small banks, local and foreign banks, private and public banks, as well as, old and new banks. This is why you need to think about larger sample size when you aim to do something on form-oriented content analysis.

I will refer you to a paper of one of the professors I have an acquaintance with last year, Hafez Abdo. Refer to the paper on https://doi.org/10.1016/j.accfor.2018.10.001

In this paper, they used the form-oriented content analysis and later used interviews to corroborate the results (sort of triangulation). I am to dwell on the content analysis bit of the study. You will realize that they used a large sample size of 68 companies. Let us have another general rule here: If you are doing a panel data study (which is different companies with different years) then you should make sure that your total data points should be more than 40 (the hard rule is 30 for good inferential analysis). For instance, if it is in the banks and you use 15 banks for the years 2009 to 2018 (10 years), then your total data points is 10 multiplied by 15 which is 150 observations. This will be appropriate for you to make your inferences, predictions and detailed explanations of how the SDG reporting in Ghana affecting or being affected by other factors. Then after you collect the data, you can do some analysis tests such as:

Descriptive statistics,

Correlation analysis

Analysis of variance

Regression

 T-tests

In summary, I have touched on meaning-oriented content analysis arguing that it deals with exploring the hidden meanings behind the statements made by entities. In addition, I gave an example of the type of research questions that the approach is associated with, as well as, the fact that sample size is not an issue here but the ability to show the meanings lurking behind the statements is key. With regard to form-oriented content analysis, I argued out its quantitative nature and the fact that studies in this line aim to draw some sort of relationship. I also gave an example from the study published in Accounting Forum. Those doing interviews could also refer to the paper since it combined both content analysis and interview in a form of triangulation.

The next post will guide those doing form-oriented content analysis through a step-by-step approach to collect their data.

I leverage social media in learning research from professors in Harvard, MIT, Yale, Stanford, New York University and other big universities. If you are on Twitter, ResearchGate, LinkedIn, and Facebook (not the best though) let us link up so you could access some of the good stuff I see and share on the platforms.

I have given you access to comment and respond to this blog post about your individual challenges which I will address for you and for referral for all your colleagues.

Cheers!!!!

Corporate Governance

Corporate Governance, Director’s Remuneration and Intellectual Capital Performance in Ghanaian Banks

King Carl Tornam, Duhoa kctduho@gmail.com
Joseph Mensah, Onumahb jmonumah@ug.edu.gh
Courage, Hodeyc chodey@st.ug.edu.gh
Raymond Agbesi, Owodod raowodo@st.ug.edu.gh
Department of Accounting a,b,c,d
University of Ghana Business School, Accra, Ghana.
KPMG Ghanac
Abstract
The current study addresses the key relationships between corporate governance, director’s remuneration and intellectual capital (IC) performance of Ghanaian banks using a panel dataset of 29 banks that operated from 2000 to 2014. The Value Added Intellectual Coefficient (VAIC™) of Pulic (2000, 2001, 2004) is used as the proxy for IC. The results indicated that larger board size, board independence and efficiency of investment in human capital negatively affect IC performance at 5% significant level. More so, income diversification and competition inhibits IC performance at 10% level of significance. Profitability increases IC performance, at 1% significant level. As regards the effect of corporate governance on director’s remuneration, there is evidence to suggest that stable banks pay high remuneration to directors but on the contrary less profitable banks are those paying higher remuneration. Again, as board size increases, director’s remuneration also increases but as boards become more independent, remuneration declines. Competition and income diversification reduces director’s remuneration but bigger banks pay higher remuneration to directors. At 1% significant level, the result suggests that local banks and private owned banks are fond of paying higher remuneration to directors. There is also evidence to suggest that directors’ remuneration does not follow the optimal contracting theory and so inefficient executives may be paid high remunerations, an indication that the managerial power theory is at play in Ghana’s banking industry. The results provide implications to the various stakeholders of the banking industry. Regulators and bankers should develop interest in improving capacity in the area of IC. This will materialise with the focus on employee development, knowledge management, adoption of relevant emerging technologies, and an integrated stakeholder perspective. In terms of corporate reporting, more Ghanaian banks are encouraged to produce integrated reports.
Keywords: Intellectual Capital, Corporate Governance, Executive Compensation Theory, VAIC™, Integrated Reporting, Big Data Analytics, Banking, Africa.
JEL Code: G32, G34, J3, O3

Risk

Risk and Profit Efficiency in Ghanaian Banks: A Two-Stage Data Envelopment Analysis Approach
King Carl Tornam, Duhoa kctduho@gmail.com
Joseph Mensah, Onumahb jmonumah@ug.edu.gh
Raymond Agbesi, Owodoc raowodo@st.ug.edu.gh
Department of Accounting a,b,c
University of Ghana Business School, Accra, Ghana.
Abstract
The study examines the impact of bank risks on profit efficiency in Ghana. The Data Envelopment Analysis is employed in estimating profit efficiency scores and accounting ratios are used to compute risk metrics for the first-stage. For the second-stage, the panel corrected standard error regression is used to assess the risk and profit efficiency nexus using a dataset of 32 banks from 2000 to 2015. Overall, the profit efficiency score for banks is closer to the efficiency frontier at 69.7 percent. Credit risk and market risk management is significant in enhancing profit efficiency. The impact of size, age, stock exchange listing, cost efficiency and competition have also been discussed. The findings contribute to the knowledge on the risk-performance nexus and provide information that is valuable to among others, academics, bankers and regulators for policy formulation. Bank managers are encouraged to invest in emerging technologies such as big data analytics to enhance the precision of predictions regarding risk management. This paper appears to be the premier attempt to examine the effects of various risk types identified in the Basel banking supervision framework on performance in Africa.
Keywords: Risk, Profit Efficiency, Basel Accord, Data Envelopment Analysis, Emerging Technologies, Banking, Africa.
JEL Code: C1, G2, G32, Q55

CONFERENCE PAPER: DIVERSIFICATION, COMPETITION, OWNERSHIP AND PERFORMANCE

Conference Paper Title:

Does Diversification, Competition and Ownership Impact the Profitability, Profit Efficiency and Financial Stability of Banks in Frontier Markets?

Introduction

We aim to present this paper as part of the 5^th School of Social Sciences, International Conference to be held on 3^rd-4^th April 2019 at the Bank of Ghana Auditorium, University of Ghana. The paper will be presented under the Financial Inclusion and Financial Sector Development Session at 11:00 am to 12:30 pm on 3rd April. The conference paper is titled: “Does Diversification, Competition and Ownership Impact the Profitability, Profit Efficiency and Financial Stability of Banks in Frontier Markets?”       It is on the impact of diversification, competition and ownership structure on three key performance metrics in the banking industry of Ghana. These metrics are profitability, profit efficiency and financial stability.

The motivation for the Study

Our study is motivated by key developments in the banking industry the world over and in the frontier markets to be specific. For instance, in 2017-8, the banking industry witnessed a number of regulatory and supervisory reforms. In effect, there were a number of the banks that went defunct. By January 2019, the total banks reduced from about 32 to 23. Issues about risk management continued to be a relevant issue being considered by analysts and policy-makers.

In addition, profitability and efficiency continue to be of essence for bank management in the quest to ensure the economic sustainability of Ghanaian banks. Coupled with the focus on these performance metrics, are concerns about diversification, competition and ownership. Diversification has implications on both income statement and statement of financial position.

In recent times, banks are diversifying into bancassurance and other services which are different from their core mandate of financial intermediation. When banks generate a major portion of their revenue income from interest income (from the offering of loan and earning interest on it), they are said to be less diversified or more focused. On the contrary, banks are more diversified when they earn more income from non-interest income.

Competition has increased in the banking industry after the introduction of Universal banking status in Ghana. Ownership continued to be of concern as to what percentage of the stake that the government needs to have in banks. Interestingly, some banks started as non-bank financial institutions but later obtained the Universal banking status. These banks could have an inherent risk which they carry along. The same way, there can be implications for their profitability and efficiency.

Methodology

The study employed data from 2000 to 2015 which was sourced from the Banking Supervision Department of the Bank of Ghana. An econometric model was used to conduct the regression analysis. The study employed the ratio of ratio model of the data envelopment analysis to examine profit efficiency. These scores are preferable because they are easier to interpret; the scores are bounded from 0 to 1 (0% to 100%). Also, asset diversification and income diversification measures have been used which are bounded from 0 to 1 (0% to 100%).

Key Findings and Implications

The results suggest that income diversification decreases profit, profit efficiency and financial stability. The impact of asset diversification was found to be insignificant. There is evidence to suggest that high competition reduces both profitability and profit efficiency which is inconsistent with the quiet-life hypothesis of Hicks (1935). However, financial stability increases with competition. Larger banks are more profitable and profit efficient than smaller banks but may not benefit from risk-bearing economies of scale.

The age of bank enhances the performance of banks but leverage exposes banks to insolvency risk. High investment in tangible assets are associated with poor performance especially in the form of reduced profitability. Government ownership reduces profitability and profit efficiency but has a positive impact on stability. There is evidence to suggest that non-banking financial institutions that later became universal banks are not financially stable. Bank of Ghana should conduct full audits on transitioning institutions regarding their assets (especially risk assets) and also consider the impact of off-balance sheet items on their overall risk profile before giving Universal banking licence.

The study is one of the few studies that employed the risk-adjusted profit efficiency in Sub-Saharan Africa. The results have implications for bank management, regulation and policy-making in frontier and emerging markets.

Follow this link to access the conference presentation draft.

Biographical notes

King Carl Tornam Duho is a qualified accounting and finance professional and a researcher. He is a qualified student of CIMA (UK) and a part qualified ACCA (UK) student.  He is currently a graduate student at the University of Ghana Business School, as well as, a consultant with NEG Consult (Ghana). He has presented academic papers at international conferences in Europe and Africa. While majoring in accountancy, he seeks to provide a transdisciplinary evaluation of accounting issues by applying ideas and concepts in disciplines such as economics, information technology, statistics and environmental sciences among others. Some of his current research works are in intellectual capital, efficiency, performance, ethics, risk, taxation and contemporary developments in accounting among others. He has published in Athens Journal of Business and Economics and International Journal of Banking, Accounting and Finance. He reviews for Athens Journal of Business and Economics.

Joseph Mensah Onumah (PhD) is a senior lecturer at the University of Ghana Business School and has taught and written various academic papers in accounting. His teaching and research interests are in accounting education, corporate governance and accounting issues in both the public and private sectors. His research writings appeared in Critical Perspectives on Accounting, Managerial Auditing Journal, International Journal on Government Financial Management, The Journal of Risk Finance, International Research Journal of Finance and Economics, African Journal of Administrative Studies, Accounting Education, Journal of Accounting & Marketing, Research Journal of Finance & Accounting and Journal of Accounting and Finance.

Raymond Agbesi Owodo holds a Master of Philosophy degree in accounting from the University of Ghana and a finalist student with the Institute of Chartered Accountants Ghana (ICA-G). He is an adjunct lecturer with Maranatha University College, Ghana. He has worked as both graduate assistant and teaching assistant with the University of Ghana Business School teaching at the graduate school. His research interest is in auditing, sustainability, taxation and public sector accounting.