GHANA'S FINANCIAL DEVELOPMENT FACTORS AND THE MEDIATING AND MODERATING IMPACTS THEY HAVE ON ECONOMIC GROWTH.
GHANA'S FINANCIAL DEVELOPMENT FACTORS AND THE MEDIATING AND MODERATING IMPACTS THEY HAVE ON ECONOMIC GROWTH.
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Date
2022
Authors
Owusu Amamkwah, Desmond
(7201540008)
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Abstract
The purpose of the study was to establish the determinants of financial development in Ghana. The study specifically focused on the effects of: Trade openness, Investment rate, Inflation rate and Foreign Direct Investment on financial development of financial institutions. The study also assessed the moderating effect government policies on the relationship between financial development and its determinants in Ghana. The study employed descriptive research design for the study. Stratified sampling was adopted which was appropriate for getting a sample from the heterogeneous population given that the financial sector had different institutions offering different financial services. Primary data was collected through self-administered questionnaires send to the managers of the various financial institutions. Also secondary data was collected from Ghana statistical website; Data analysis was done using statistical package for social science (SSPS). Descriptive statistic was used to present the findings of the study supported by Analysis of Variance (ANOVA), Multiple Regression and Correlation Analyses being undertaken to provide inference. The variables namely trade openness, market capitalization, investment rate; interest rate and Covid-19 were found to determine the financial development in Ghana. However, trade openness was not statistically significant. Further, the effects of the determinants on financial development were seen to be heavily moderated by government policies. The study suggested that institutions be strengthened (in terms of credit risk management, financial structure, and corporate governance/management efficiency), that the government pursue expansionary policies to spur economic growth, that foreign investment in financial institutions be attracted, and that the volume of exports be increased by further opening up the Ghanaian economy.