Mensah, L., Yiadom, E.,B., Dziwornu, R.,(2021), Does Eurobond issuance influence FDI location? Evidence from sub-Saharan Africa, African Journal of Economic and Management Studies,  Vol. 12, No. 2, pp. 336-355

In this study, the authors investigate how FDI is responding to the rising levels of Eurobonds in sub-Saharan African (SSA). The study uses the system GMM model to set up a panel with all 17 SSA countries with Eurobonds. The dataset was transformed into time series, and the VAR model and Granger causality were used to diffuse the doubt of a possible bi-causal relationship between Eurobonds and FDI. Additionally, the authors use the impulse response function to test the behavior of FDI to a one-time shock to Eurobonds. The study reports that Eurobond levels matter in explaining FDI receipts. Specifically, the authors report that the issuance of Eurobonds leads to a favorable increase in FDI inflows. The authors transform our data into 

Donkor, R., A., Mensah, L., Sarpong-Kumankoma, E., (2021), Oil price volatility and US dollar exchange rate volatility of some oil-dependent economies, The Journal of International Trade & Economic Development, pages 1-17
This paper examines the relationship and related causality patterns of oil price volatility and exchange rate volatility of a group of oil-dependent economies before and after the 2008–2009 global financial crisis. We employed weekly time-series data of oil price and exchange rates for 2000–2007 (pre-crisis) and 2010–2016 (post-crisis). United States dollar exchange rates are for Ghanaian cedi, Nigerian naira, Russian ruble, Indian rupee, South African rand, and the Euro. To investigate the volatility impacts that exist between oil price and exchange rates during both sub-sample periods, we merged Vector Autoregressive (VAR) with GARCH and EGARCH models in the form of Bivariate VAR-GARCH and VAR-EGARCH. We further adopted the Toda-Yamamoto causality test to investigate related causality patterns. Empirical findings revealed both bidirectional and unidirectional relationship between oil price volatility and the exchange rates volatility of four out of the six oil-dependent economies considered for the study. These findings were more prevalent in the post-crisis period than the pre-crisis period. We also confirmed both bidirectional and unidirectional causality pattern between oil price volatility and exchange rate volatility of the same four currencies as observed with the VAR results in both sub-sample periods.

Kusi., A., B., Mensah L., & Agbloyor E. (2021), Bank Deposit Mobilization, Loan Advancement and Financial Stability: The Role of Bank Branches in an Emerging Market, Journal of African Business, pages 1-20.

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.

Andoh, C., Mensah, L., Quaye, D., (2021), Road pricing: a solution to Ghana's traffic congestion, African Journal of Management Research, Volume 27, Issue 1,  pages 129-150.

Congestion in major cities around the world calls for the proper management of space vehicles occupy on road networks. The paper develops models that combine the density of car usage in an area, space occupies by vehicles and the damage they cause to roads in the payment of vehicle registration, renewal, and towing rates. The paper confirms that larger vehicles cause greater congestion on roads by virtue of the space they occupy and causes greater damage to the road, as compared to small-sized vehicles. Vehicles should pay road rates commensurate with the density of vehicles, the space they occupy and the damage they cause to the road. From our models, Mercedes-Benz and Toyota, Camry are undercharged across all the offices in the country, except for Tema and Bolga, which charges 120 and 80 Ghana cedis respectively above the 60 Ghana cedis national charge. For new car registration fees, we found that the current charge is higher for New Audi A1 Sportback 2019 except at the Tema registration office, which charges more than 20 Ghana cedi above the national charge of 100 Ghana cedis. The paper also provides models for costing the removal of vehicles that park at unauthorized places as well as broken-down vehicles on highways. The paper suggests that this method of road user rates payment, aside being a good source of revenue for governments would encourage people to patronize public transport. This will ease road congestion, road rage as well as other unwanted road behaviors, particularly around and within city centres.

Prof. Lord Mensah
Associate Professor
Department of Finance
University of Ghana Business School
Sticky Menu