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Determinants of Bank Deposits in Ghana: A Cointegration Approcah

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  • Otu Larbi-Siaw
  • Peter Angmor Lawer

Abstract

The study investigates the influence of selected macroeconomic and financial level variables on bank deposits in Ghana. It specifically examines the dynamic effect of deposit interest rate, inflation, monetary policy rate, growth of money supply and stock prices (All Share Index) on the level of bank deposits. The dataset for the study consisted of quarterly data spanning the years of 2000 to 2013 gathered from the Bank of Ghana (BoG) monetary time series database and the World development Indicator (WDI) database. Employing a Co-integration analysis and Fully Modified Ordinary Least Square (FMOLS), both short and long run elasticity’s of the model are estimated. The preliminary test for unit root indicated that all the variables are integrated of order one (an I (1) process) and the co-integration revealed the presence of one co-integrating equation. Empirical findings form the study indicates a significantly negative short-term impact of both inflation and growth of money supply of bank deposits in Ghana. The long-run effects of the various independent variables on bank deposit are also discussed. Some of the variables conformed to priori expectations, albeit insignificant. Appropriate measures are also recommended based on the findings thereof.

Suggested Citation

  • Otu Larbi-Siaw & Peter Angmor Lawer, 2015. "Determinants of Bank Deposits in Ghana: A Cointegration Approcah," Asian Journal of Economics and Empirical Research, Asian Online Journal Publishing Group, vol. 2(1), pages 1-7.
    • Handle: RePEc:aoj:ajeaer:v:2:y:2015:i:1:p:1-7:id:194
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    Cited by:

    1. Mai Ahmed Abdelzaher, 2023. "Determining Factors Affecting the Mobilization of Deposits in Egyptian Listed Banks," International Journal of Economics and Financial Issues, Econjournals, vol. 13(3), pages 11-17, May.
    2. Nesru Kasim Banke & Mekonnen Kumlachew Yitayaw, 2022. "Deposit mobilization and its determinants: evidence from commercial banks in Ethiopia," Future Business Journal, Springer, vol. 8(1), pages 1-10, December.
    3. Kabir, Anis & Abdul Rehman Shah, Syed Muhammad & Hassan, M. Kabir & Akmal, Muhammad, 2022. "The Transmission Mechanism of Monetary Policy via Bank’ Balance Sheet: An Empirical Study of Dual Banking System in Pakistan," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 56(2), pages 129-140.
    4. Ahadifar , Alireza & Karimi Takanlo , Zahra & ranjpour , Reza & Haghighat , Jafar, 2021. "Investigation of Factors Affecting Banking Leverage in Selected Iranian Banks (Random-Coefficients Approach)," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 16(1), pages 21-42, March.
    5. Hartwell, Christopher A. & Korovkin, Vladimir, 2021. "Contracting in a void: The role of the banking sector in developing property rights in Russia," The Quarterly Review of Economics and Finance, Elsevier, vol. 82(C), pages 113-127.
    6. Amjad Qwader & Ateyah Alawneh, 2017. "Measuring the Impact of Economic Stability and Remittances of Overseas Workers on Bank Deposits: the Case of Jordan," Accounting and Finance Research, Sciedu Press, vol. 6(2), pages 1-45, May.
    7. Nguyen, Thi Anh Nhu, 2022. "The role of institutional quality in bank deposit growth In European transition economies," Finance Research Letters, Elsevier, vol. 47(PA).

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