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Benefits of Domestic Bank Loans to Private Companies in Ghana

Thomas Adoma-Worae (), Samuel Addo-Paintsil () and Benjamin Yeboah ()
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Thomas Adoma-Worae: Kumasi Technical University
Samuel Addo-Paintsil: Kumasi Technical University
Benjamin Yeboah: Kumasi Technical University

The Journal of Accounting and Management, 2021, issue 2(11), 186-196

Abstract: The paper examines and provides empirical evidence for determining benefits of domestic bank loans to private companies in Ghana for the period between 1960 and 2018. What prompted this study is to ascertain the undulating trend tendencies of risks inherent in loan administration and estimating the extent of loan benefits persist to private firms using the Markov switch model. This paper uses the Markov switch model as estimator on the undulating trend propensities and persist benefits of loans to private firms in Ghana. The study obtained data by the World Development Indicators of World Bank data of 2018. The results reveal that loan benefits is much more persist in the regime 2, with positive significant at 1% level, achieving more high mean scores, better 50th and 75th percentiles and lower variance score comparatively. However, the regime 1 outcomes do not support persistent of loan benefits to the private firms. Better explanation model should identify other Africa countries to run the test for future research study. The study will be encouraged to expand the sample to cover more countries in the Sub Saharan Africa countries, by using the existing empirical archival data. Empirically, the paper test evidence of persistent loan benefits to the private firms in Ghana’s context that can have resemblance lessons on other African countries using the Markov switch model.

Keywords: Loan benefits; private companies; Markov switch model; Ghana (search for similar items in EconPapers)
Date: 2021
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Handle: RePEc:dug:jaccma:y:2021:i:2:p:186-196