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Dr Frank Obenpong Kwabi

Job: Associate Professor in Accounting and Finance

Faculty: Business and Law

School/department: Leicester Castle Business School

Address: Hugh Aston Building

T: 0116 201 3862

E: frank.kwabi@dmu.ac.uk

W: http://dmu.ac.uk

 

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Personal profile

Frank is Associate Professor in Accounting and Finance at De Montfort University. He is the Institute Head of Research Students for Finance and Banking Research Center (FiBRE). He was previously the Postgraduate Research Coordinator for the Department of Accounting and Finance. Frank is a Co-Editor of a special issue (SI) in the Sustainability Journal. Prior to joining De Montfort Frank worked at the University of Strathclyde as a part-time Lecturer in Finance whilst pursuing his PhD. Frank joined De Montfort University in 2016 as a VC2020 Lecturer in Accounting and Finance and was promoted to Senior Lecturer (2018) and Associate Professor (2019). Frank received PhD in Finance from the University of Strathclyde, MSc in Finance from Heriot Watt University and BA (Hons) in Accounting and Finance from Edinburgh Napier University, Scotland. Frank is a Senior Fellow of the Higher Education Academy (SFHEA), Certified Management & Business Educator (CMBE).

Frank’s research interests are concentrated in the area of international finance, cost of capital, insider trading laws, investor protection standards, stock market development, high frequency trading, and corporate social responsibility. He has a growing research in internally quality journals. His research has been published in a variety of journals including International Review of Financial Analysis (ABS ranking 3*), Review of Quantitative Finance and Accounting (ABS ranking 3*), Economics Letters (ABS ranking 3*), International Journal of Finance and Economics (ABS ranking 3*), Journal of Multinational Financial Management (ABS ranking 2*). Frank has served as a reviewer internationally quality journals such Review of Quantitative Finance and Accounting, International Review of Financial Analysis, International Journal of Finance and Economics, Emerging Markets Review, Journal of Multinational Financial Management,Technological Forecasting and Social Change.

Frank has supervised six PhD students to successful completion and has examined three PhD viva. Frank is currently supervising six PhD students in the above-mentioned research areas. Frank was the winner of the Faculty of Business and Law Award for Postgraduate Research Supervisor of the year (2020), He was also the winner of Research OSCARS for Outstanding Contribution to Research Supervision (2020). Frank was shortlisted for the following Faculty of Business and Law Awards; Contribution to Research (2020), Research Mentor (2020).

Frank has supervervised over 35 MSc dissertations and he has taught several modules both at postgraduate and undergraduate levels. These modules include International Financial Markets and Institutions (Postgraduate), Entrepreneurial Finance and Financial Management (Postgraduate), Corporate Finance (3rd year), Business Finance (3rd year), Financial Derivatives (3rd year), Introduction to Accounting and Finance (1st year), Professional Communication (1st year). 

Publications and outputs 

  • The effect of insider trading laws and enforcement on stock market transaction cost
    The effect of insider trading laws and enforcement on stock market transaction cost Kwabi, Frank Obenpong; Boateng, Agyenim Theoretical arguments suggest that as countries enact insider trading laws and complement them with enforcement, stock market information risk reduces and investor participation increases, and this will therefore have a negative effect on liquidity trading cost. Consistent with this expectation, based on panel data comprised of 32 countries for the period 2001-2015, we find that stringent insider trading laws and enforcement reduce stock market transaction cost. However, in countries where investor protection is poor, our results show that stringent insider trading laws have no effect on liquidity trading cost. We further find that stringent insider trading laws interact with institutional quality to reduce liquidity trading cost. Our findings are robust to difference-in-differences based on the 2008 global financial crises. The overall evidence implies that market participants will experience lower liquidity trading cost if insider trading laws are enforced. The file attached to this record is the author's final peer reviewed version. The Publisher's final version can be found by following the DOI link.
  • Foreign equity portfolio flow and corruption: A cross-country evidence
    Foreign equity portfolio flow and corruption: A cross-country evidence Kwabi, Frank Obenpong; Boateng, Agyenim; Fosu, Samuel; Zhu, Tingting; Chijoke-Mgbame, Marian This study examines the impact of foreign equity portfolio investment on corruption. Employing a large dataset of 44 countries from 2001 to 2015 and three different measures of corruption, our results show that foreign investors from well-governed countries tend to foster public accountability, reduce asymmetry information and corruption. We find empirical evidence that foreign equity portfolio investment interacts with stock market development and central bank transparency to reduce corruption. Our results suggest that stock market development and central bank transparency are regarded as complementary by international portfolio investors. Further analysis indicates that corruption appears more prevalent in countries where domestic investors dominate the stock market. Our results are robust to endogeneity using dynamic generalized methods of moments (GMM). The findings suggest that attracting foreign equity investors reduces corruption, implying significant benefits for portfolio diversification. open access article
  • Impact of central bank independence, transparency and institutional quality on foreign equity portfolio allocation: a cross-country analysis
    Impact of central bank independence, transparency and institutional quality on foreign equity portfolio allocation: a cross-country analysis Kwabi, Frank Obenpong; Boateng, Agyenim; Du, Anna In this study, we analyse the effects of central bank independence (CBI) and central bank transparency (CBT) and their interactions with institutional quality on foreign equity portfolio inflows. Employing a dataset from 42 countries over the period from 2001-2014, we find strong evidence that independent and transparent central bank has a positive and significant influence on foreign equity investment inflows. Further analysis shows that institutional quality interacts with central bank independence and transparency in attracting foreign equity portfolio. Our results are robust to alternative specifications, endogeneity concerns and that economic policy uncertainty increases asymmetric information and deters foreign equity portfolio investment inflows. The file attached to this record is the author's final peer reviewed version. The Publisher's final version can be found by following the DOI link.
  • High frequency trading, price discovery and market efficiency in the FTSE100
    High frequency trading, price discovery and market efficiency in the FTSE100 Leone, Vitor; Kwabi, Frank This study examines the role of high frequency trading in price discovery and efficiency in the FTSE100 index tick changes. Using a unique data set, we find that there is no random walk when investors extract information at a millisecond to a second. Further analysis provides evidence that the information cannot be extracted by investors at frequencies starting from 10 minutes. This is consistent with the view that the market already experiences a random walk, which contributes to the weak form of market efficiency. The file attached to this record is the author's final peer reviewed version.
  • Sub-optimal international equity portfolio diversification and stock market development
    Sub-optimal international equity portfolio diversification and stock market development Kwabi, Frank; Thapa, Chandra; Paudyal, Krishna; Neupane, S. This paper examines whether the widely reported phenomena of home and foreign biases (i.e. suboptimal international equity portfolio diversification) hold any ramifications for the development of stock markets. The results, analysed using macro- and micro-level data, support the view that stock markets that are characterised by a higher degree of home bias are associated with lower levels of development. On the other hand, markets where foreign investors show a higher degree of allocation preference, relative to the prescribed benchmark (foreign bias), are found to be more developed. The results, which are robust to the use of shock based identification strategy, indicate that policy measures that promote optimal international equity portfolio diversification could be crucial in developing the depth and breadth of domestic stock markets.
  • International equity portfolio investment and enforcement of insider trading laws: a cross-country analysis
    International equity portfolio investment and enforcement of insider trading laws: a cross-country analysis Kwabi, Frank; Boateng, Agyenim; Adegbite, Emmanuel In this study, we examine the effects of stringent insider trading laws’ enforcement, institutions and stock market development on international equity portfolio allocation using data from 44 countries over the period 2001-2015. Our results suggest that stringent insider trading laws and their enforcement exert a positive and significant impact on international portfolio investment allocation. Further analysis indicates that the interaction between a country’s institutional quality, stock market development and enforcement of insider trading laws have a positive and significant effect on international equity portfolio allocation. The findings of this study have implications for the design of portfolio investment trading strategies and contribute to the literature on foreign equity investment decisions. The file attached to this record is the author's final peer reviewed version. The Publisher's final version can be found by following the DOI link.
  • The impact of stringent insider trading laws and institutional quality on the cost of capital
    The impact of stringent insider trading laws and institutional quality on the cost of capital Kwabi, Frank; Boateng, Agyenim; Adegbite, Emmanuel This paper examines the effects of interaction between stringent insider trading laws, institutional quality and equity portfolio allocation on the cost of capital. Using a dataset drawn from 44 countries over the period from 2001-2015, we find that stringent insider trading laws interact with institutional quality and foreign equity portfolio allocation to reduce the country-level cost of capital. Further analysis from a quasi-natural experiment based on the 2008-2009 global financial crisis suggests that the findings are robust to endogeneity. Our results imply that the enactment of stringent insider trading laws and their interplay with the quality of institutions are not only important to portfolio investment allocation decisions but reduce the country-level cost of capital. The file attached to this record is the author's final peer reviewed version. The Publisher's final version can be found by following the DOI link.
  • Shareholder protection, stock markets and cross-border mergers
    Shareholder protection, stock markets and cross-border mergers Ahiabor, Frederick; James, G. A.; Kwabi, Frank; Siems, Mathias This paper is the first one that uses a panel data of different types of shareholder protection in order to examine (i) the effect of such laws on stock market development and (ii) the convergence of shareholder protection laws through cross-border mergers and acquisitions. We find significant results for enabling laws but less so for paternalistic ones. The file attached to this record is the author's final peer reviewed version. The Publisher's final version can be found by following the DOI link.
  • Financial and corporate social performance in UK listed firms: The relevance of non-linearity and lag effects
    Financial and corporate social performance in UK listed firms: The relevance of non-linearity and lag effects Adegbite, E.; Guney, Y.; Kwabi, Frank; Tahir, S. Using environmental, social and governance (ESG) scores compiled by Reuters Datastream for each company’s corporate social performance (CSP), we examine the relationship between CSP and corporate financial performance (CFP) of 314 UK listed companies over the period 2002 to 2015. We further evaluate the relationship between prior and subsequent CFP and prior and subsequent CSP. Based on the system-GMM estimation method, we provide direct evidence that suggests that while CFP and CSP can be linked linearly; however, when we examine the impact of CSP on CFP, the association is more non-linear (cubic) than linear. Our results suggest that firms periodically adjust their level of commitment to society, in order to meet their target CSP. The primary contributions of this paper are testing i) the non-monotonous relationship between CSP and CFP, ii) the lagged relationship between the two and the optimality of CSP levels, and iii) the presence of a virtuous circle. Our results further suggest that CSP contributes to CFP better during post-crisis years. Our findings are robust to year-on-year changes in CFP and CSP, financial versus non-financial firms, and the intensity of corporate social responsibility (CSR) engagement across industries. The file attached to this record is the author's final peer reviewed version.
  • Biases in International Portfolio Allocation and Investor Protection Standards
    Biases in International Portfolio Allocation and Investor Protection Standards Kwabi, Frank; Thapa, Chandra; Paudyal, Krishna; Adegbite, E. Economic reasoning suggests that financial globalization that encourages optimal international portfolio investments should improve investor protection standards (IPS) of a country. In practice, however, investors manifest varying degrees of suboptimal international portfolio allocations. Using a panel dataset covering 44 countries spanning over 15 years we examine whether suboptimal equity portfolio allocation in part is associated with the cross-country variations in IPS. Consistent with economic reasoning we find robust indications that international portfolio allocation may play an important role in the development of IPS. More specifically, the quality of IPS improves with higher degrees of optimal international equity portfolio allocation of domestic and foreign investors. The file attached to this record is the author's final peer reviewed version. The Publisher's final version can be found by following the DOI link.

Research interests/expertise

  • Corporate Finance
  • International portfolio diversification
  • Cost of capital
  • Stock market development
  • Investor protection standards
  • Insider trading
  • Equity home and foreign bias

Areas of teaching

  • Corporate Finance
  • Portfolio Management
  • Introduction to Finance and Accounting
  • Derivatives

Qualifications

PhD University of Strathclyde

MSc Heriot Watt University

PG Cert University of Strathclyde

BA (Hons) First Class Edinburgh Napier University

Courses taught

Current teaching:

  • Performance Measurement in Organisations (Year 2)
  • Professional Communication (Year 1)
  • International Financial Markets and Institutions (Postgraduate)

Previous taught:

  • ACFI 3203 Business Finance (Year 3)
  • ACFI 1203 Financial Decision Making (Year 1)
  • CORP 2165 Contemporary Management (Year 2)
  • LCBS5000 Entrepreneurial Finance and Financial Management (Postgraduate – Module Leader)

Previous admin role:

  • Doctoral Research Coordinator - Department of Accounting and Finance

Current admin roles:

  • Institute Head of Research Students
  • Module Leader: Performance Measurement in Organisations
  • Module Leader: International Financial Markets and Institutions

Honours and awards

1. Winner: Faculty of Business and Law Awards for Postgraduate Research Supervisor of the year (2020),

2. Winner: Research OSCARS for Outstanding Contribution to Research Supervision (2020).

3. Nominated: Faculty of Business and Law Awards for Contribution to Research (2020),

4. Nominated: Faculty of Business Awards for Research Mentor (2020).

Membership of external committees

European Finance Association

Royal Economic Society

American Finance Association

Senior Fellow of Higher Education Academy (SFHEA)

Conference attendance

Kwabi, F.O., Neupane, S., Paudyal, K., and Thapa, C., (2014) International portfolio investment and stock market development: British Accounting and Finance Association, London School of Economics, London. 

Kwabi, F.O., Neupane, S., Paudyal, K., and Thapa, C., (2014) Foreign portfolio investor’s influence and investor protection standards: Scottish DTC Business and Management Pathway PhD Colloquium at Stirling Management Centre. University of Stirling.

Kwabi, F.O., Faff, R., Marshall., and Thapa, C., (2013) Sub-optimal portfolio allocation and cost of capital: 7th International Accounting and Finance Doctoral Symposium. Bologna, Italy.

Key research outputs

Kwabi, F.O., Boateng, A., (2020). The effects of insider trading laws and enforcement on stock market transaction cost. Review of Quantitative Finance and Accounting (forthcoming). ABS 3*

Kwabi, F.O., Boateng, A., Fosu, S., Zhu, T., Chijoke-Mgbame, M., (2020). Foreign equity portfolio and corruption: A cross-country evidence. International Journal of Finance and Economics (forthcoming). ABS 3*

Kwabi, F.O., Boateng, A., Du, A., (2020). Impact of central bank independence, transparency and institutional quality on foreign equity portfolio flow: a cross-country analysis. International Review of Financial Analysis (forthcoming). ABS 3*

Kwabi, F.O., Thapa, C., Paudyal, K., Neupane, S., (2020). Sub-optimal international equity portfolio diversification and stock market development. Review of Quantitative Finance and Accounting, 54(1) pp.389-412. (ABS 3*)

Leone, V., Kwabi, F.O., (2019). High frequency trading, price discovery and market efficiency in FTSE100. Economics Letters, Vol 181, pp.174. (ABS 3*)

Adegbite, E., Guney, Y., Kwabi, F.O., Tahir, S., (2019). Finance and corporate social performance in the UK listed firms: The relevance of non-linearity and lag effects. Review of Quantitative Finance and Accounting, 52(1), pp. 105-158. (ABS 3*).

Kwabi, F.O., Boateng, A., Adegbite, E., (2019). International portfolio investment and enforcement of insider trading laws: A cross-country analysis. Review of Quantitative Finance and Accounting, 53(2) pp. 327-349. (ABS 3*)

Ahiabor, F. S., James, G., Kwabi, F.O., Siems, M.M., (2018). Shareholder protection, stock markets and cross-border mergers. Economic Letters, Vol 171, 54-57. (ABS 3*)

Kwabi, F.O., Boateng, A., Adegbite, E., (2018). The impact of stringent insider trading laws on cost of capital. International Review of Financial Analysis Vol 60, pp.127-137. (ABS 3*)

Kwabi, F.O., Thapa, C., Paudyal, K., Adegbite, E., (2017). Biases in international portfolio allocation and investor protection standards. International Review of Financial Analysis Vol 53, pp. 66-79. (ABS 3*)

Kwabi, F.O., Faff, R., Marshall., and Thapa, C., (2016). Sub-optimal portfolio allocation and cost of capital. Journal of Multinational Financial Management Vol 35, (6), pp. 41-58.

 

Current research students


  • Chizzy Wonu
  • Mathew Udenge
  • Abdullah Mamoon
  • Samuel Fulgence
  • Samuel Owusu-Manu
  • Manoj Koppula

Completed PhDs

1. Dr Wardah Abdulrahman Bindabel (2018): “The impact of Shariah (Islamic Principles) corporate governance on cross-border merger and acquisitions involving Islamic companies in the Gulf Countries”.

2. Dr Babatunde Adejumo (2019). "The internal audit function as a corporate governance mechanism in a developing economy: An empirical study of Nigerian Financial Sector". 

3. Dr Dalia Sharaf (2019).

4. Dr Nuha Alofi (2020): “The effect of corporate social responsibility disclosure on firms’ stock performance of the top 100 Tadawul Listed Companies”.

5. Dr Rawinder Kaur (2020): “Relationship between corporate social responsibility and bankruptcy: Evidence from U.K”.

6. Dr Samuel Fulgence (2020): "The effects of board and ownership structure on corporate governance disclosure: Evidence from East African Countries".

FRANK-KWABI