Assessing the impact of Information Technology (IT) investment on business profitability (Case study of selected commercial banks in Ghana)

Thumbnail Image
JUNE, 2016.
Journal Title
Journal ISSN
Volume Title
This study was to provide empirical evidence on how investment in Information technology impact on business profitability using GLS regression model. (Clark, J.A. 1986; Ko, M., & Bryson, K. M., 2002). It was done by testing the significance of the choice variables (loans, deposit, expenditure on information technology and Bank of Ghana prime rate) on business profit. The rationale behind this work was to contribute and possibly put an end to the on-going debate on the exact impact of IT investment on firms’ profitability. The methodology focused on using financial ratios such as return on assets, return on equity, profit margin to assess business performance (Dehning & Richardson, 2002; Li & Johnson; 2002) The study uses panel dataset from the five commercial banks over a period of nine years from 2006 to 2014. The study found out that expenditure on information technology has no direct significant influence on profitability of the commercial banks. The study therefore recommends that commercial banks in Ghana should take a second look at continuous investment in information technology, as it may not necessarily give them the profit they are through thick and thin looking for directly.
A thesis submitted to the Department of Economics of the College of Social Sciences and Humanities, Kwame Nkrumah University of Science and Technology, in partial fulfillment of the requirement for the award of a Master of Science degree in Economics,