College of Humanities & Social Sciences

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    International transfer pricing and income shifting: evidence from companies listed on the Ghana stock exchange.
    (KNUST, 2016-08) ABU-KHANIFA, MOHAMMED
    International transfer pricing and income shifting has become a topical issue in many countries. As such it attracted a lot of attention from key players like academia, auditors, governments, international organizations and the media. The academia for instance, provides empirical evidence of International transfer pricing among multinationals in developed economies where the tax regime is quiet effective and efficient. Little is however known about it in developing economies where there exist inadequate and ineffective tax regimes. Motivated by this, the current study seeks to examine the possible use of international transfer pricing and income shifting by foreign multinationals in developing economies using Ghana as a case study. The methodological approach involves a comparison of total assets as a measure of capability, net profit before tax and return on assets as measures of profitability and absolute amount of dividend paid as post-performance measure for an equal sample of foreign and Ghanaian controlled entities over a seven year period. The results show significant differences between foreign and Ghanaian companies in terms of capability, profitability and dividend payment. Foreign firms therefore underperform domestic ones given their higher capability and higher earning potential thus suggesting the use of International transfer pricing by foreign companies in Ghana. Also interesting is the fact that foreign firms paid higher dividend than domestic firms notwithstanding their lower profitability thus signaling possible income shifting. Hence evidence of International transfer pricing and income shifting is confirmed and the claim that foreign firms use International transfer pricing to shift profit and reduce their tax liability is established. The study therefore recommends that existing tax laws and transfer pricing regulations should be strictly implemented. Also, Ghana Revenue Authority should equip staff of its transfer pricing unit with specialized auditing skills through capacity building programmes.
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    Co-movement dynamics of stock returns using the dynamic conditional correlation Garch (DCC GARCH) approach.
    (KNUST, 2016-07) FORSON, ABEDNEGO
    The study employs dynamic conditional correlations GARCH (DCC-GARCH) model to examine the existence of time-varying correlations among stocks returns of major sectors of the Ghanaian economy for the period from 2010 to 2016. The purpose of the study was to ascertain whether investors and fund managers can take advantage of diversification within the local stock market when investing. A sample of 333 weekly observations of stock returns of five major sectors within the Ghanaian economy was used for the purposes of the analysis. The period spans from January 2010 to May 2016. The result shows high levels of dynamic conditional correlation among stock returns of the companies in all the sectors, implying that correlation among the sector returns are time-varying. This result makes it clear that the assumption of constant correlations is not empirically supported. The result however shows some diversification opportunity of investors who wish to invest in the Basic Materials (BM) sector and Consumer Goods (CG). The result also found a long-run equilibrium relationship between the stock returns of the selected sectors. The study recommends that fund managers and investors should not limit their diversification strategies to inter-sector investment since inter-sector diversification will not lead to significant improvement in their portfolio’s risk- return profile.
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    Factors affecting performance of small and medium enterprises in the Kumasi metropolis - A case study of some selected SMES in the Kumasi metropolis.
    (KNUST, 2016-08) BAWA, ABDUL-RAHAMAN
    The study was a case study of some selected SMEs within Kumasi Metro for an assessment of the impact of factors affecting performance of SMEs in the Kumasi Metropolis. The three main objectives of the study were to identify factors affecting performances of SMEs in the Kumasi Metropolis, to analyse the impact of the factors on performances of SMEs in the Kumasi Metropolis and to recommend appropriate solutions by which the performance of SMEs in the Kumasi Metropolis can be enhanced. In all, 300 entrepreneurs were sampled using stratified simple random sampling technique. Both questionnaires and interview were used to gather data for this study. Five major challenges facing SMEs in the Kumasi Metropolis were access to finance, education, managerial skills, business registration and influx of foreign goods. Regression model was used to test the impact of the above five variables on annual turnover and the result indicated that all the five factors except managerial skills, have significance influence on annual turnover. Access to finance was found to be the most influential factor among all. Some recommendation made were that, banks should make more credit facilities available and also ease their financial regulations in order to enable more SMEs have access to credit facilities to expand their businesses. Government and other financing agents such as venture capitalist were encouraged to prioritize and factor in SME support in their budgets. There should be more publicity on the existence of venture capital funds and education on how to access venture capital funds. SME owners should be encouraged to register their businesses to enable them formalize their businesses activities in order to attract investors. Various forms of data reliability and validity test such as homoscedasticity, heteroscedasticity, multicollinearity and autocorrelation, were performed on the data gathered, in order to conform to the best linear unbiased estimator.
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    The impact of domestic debt on private investment in Ghana.
    (KNUST, 2016-09) Gyasi, Genevieve
    Ghana’s domestic debt was at a high of GH 34,620.90 billion as of December 2014 since the beginning of HIPIC in 2000. This study was aimed at examining the impact of domestic debt on private investment levels in Ghana from the period 1993 to 2014. An investment function with five independent variables, which are public investment, domestic debt, GDP, interest rate and foreign direct investment were estimated by analysing the unit root test and cointegration test. The unit root test revealed that all the five of the variables in study were integrated of the order one, private investment was at levels and ARDL was used for the cointegration test in the long-run for the equation. The results showed that the high levels of domestic borrowing had a positive and significant impact on private investment in the long run and was positive but insignificant in the short run. The results showed that public investment impact on private investment was statistically positive and significant in the longrun but positive and insignificant in the short-run. Interest rates had a positive and significant impact on private investment in the long-run but was not statistically significant in the short run. GDP was positive and statistically significant in the long-run on private investment and statistically positive and significant in the short-run. FDI was positive and statistically significant in the long-run but positive and insignificant in the short-run. This study finds that the appropriate policy implementation can deal with the increasing domestic debt and the sale of domestic debt to all donors. The results from the study have shown that they have a strong implication on the management of fiscal status of the country as this will help the economy. This research seeks to assist in longitudinal studies by other researcher in the field of academia and be of strong value to all. Keywords: Ghana, GDP, domestic debt, private investment
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    Functional diversity and team innovation: evidence from public agricultural-based research institutions in the Ashanti Region.
    (KNUST, 2016-10) Abiew, Gladys Esinu
    This study was conducted in an attempt to fill the vacuum and contribute to the debate on the relationship between functional diversity and team innovation as well as the effect of collaboration and culture in such a relationship, using Public Agricultural-based Research Institutions in the Ashanti region to investigate their relationship. Consequently, the study focused on assessing the nature of functional diversity within the research institutions, the relationship between functional diversity and team innovation, the mediating role of collaboration in such a relationship and the moderating role of culture (power distance, uncertainty avoidance and masculinity-femininity in such a relationship). Concurrently, the study reviewed literature on the concepts of functional diversity, team innovation, culture, team collaboration and the theories underpinning functional diversity. A mixed research method was employed in the study where structured questionnaire and semistructured interview were used to elicit information from the respondents. Also, questionnaire was designed and self- administered to 251 researchers in three selected case study institutions. Quota and purposive sampling techniques were employed concurrently in the selection of respondents for the study. A total of 12 respondents from the three institutions were interviewed. Both quantitative and qualitative data were analyzed using a variety of methods including: simple regression, hierarchical regression and thematic analysis. The study yielded some interesting results and provided deeper insight into functional diversity and team innovation. The study revealed that functional diversity was positively related to team innovation. It was also found that, collaboration partially mediated the relationship between functional diversity and team innovation. Again, the study revealed that functionally diverse groups are more innovative when they exhibit: low uncertainty avoidance, femininity and low power distance. These findings were further confirmed by the interviews conducted. The study thus recommends that, management of the teams should encourage: internal team communication, honesty, respect, and trust. This would foster team unity and commitment which would enable members to share diverse expertise towards the creation and execution of new ideas towards the improvement of agricultural productivity in the country.