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Intra-Industry Information Transfers and Firm Value: Evidence From Ghana’s Banking Industry

Author

Listed:
  • Isaac Quaye
  • Alfred Sarbah
  • Joseph Boadi Nyamaah
  • Mavis Aidoo
  • Yinping Mu

Abstract

The purpose of this study is to estimate the economic value of intra-industry information transfers within Ghana’s banking industry due to the collapse of seven banks. This is a short-term study with an event window [−10, +10] and an estimation period of 200 trading days. The event study methodology is adopted to estimate the cumulative abnormal return (CAR) gained by other rival industry banks as well as to calculate the cumulative average abnormal return (CAAR) for the entire Ghana Stock Exchange (GSE). The results of the study show that the collapse of the seven banks does convey information that the market uses in revising stock prices. However, most of the rival banks experienced an insignificant share price reaction. This insignificant reaction can be attributed to the fact that GSE is not efficient. The study recommended among others, for the GSE to be reformed to improve the efficiency of the market and secure the flow of information to market participants.

Suggested Citation

  • Isaac Quaye & Alfred Sarbah & Joseph Boadi Nyamaah & Mavis Aidoo & Yinping Mu, 2020. "Intra-Industry Information Transfers and Firm Value: Evidence From Ghana’s Banking Industry," SAGE Open, , vol. 10(4), pages 21582440209, November.
    • Handle: RePEc:sae:sagope:v:10:y:2020:i:4:p:2158244020968087
    DOI: 10.1177/2158244020968087
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    Cited by:

    1. Benjamin Agyeman & Dorcas Quarshie & James T. Bonn, 2024. "Corporate Governance and Voluntary Disclosures in Annual Reports of Ghanaian Listed Banks," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(3s), pages 2416-2434, March.

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