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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 Deputy Director for Finance and Banking Research Center (FiBRe) and also Institute Head of Research Students. He was previously the Postgraduate Research Coordinator for the Department of Accounting and Finance. He 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. He 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. He is a Senior Fellow of the Higher Education Academy (SFHEA).

His 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 Bristish Journal of Management (ABS ranking 4*), 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*), Empirical Finance (ABS ranking 2*), 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.

He has supervised seven PhD students to successful completion and has examined four PhD viva. He is currently supervising eight PhD students in the above-mentioned research areas. He 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).

He 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

  • Economic Policy Uncertainty and Cost of Capital: The Mediating Effects of Foreign Equity Portfolio Flow
    Economic Policy Uncertainty and Cost of Capital: The Mediating Effects of Foreign Equity Portfolio Flow Kwabi, Frank; Owusu-Manu, Samuel; Boateng, Agyenim; Ezeani, Ernest; Du, Min We investigate whether economic policy uncertainty and the interaction of foreign equity portfolio flow and economic policy uncertainty impact the cost of capital. Using panel data of 20 countries from 2001 to 2018, we find economic policy uncertainty to exert a positive effect on the cost of capital. However, the interaction between foreign equity portfolio flow and economic policy uncertainty has a negative effect on the cost of capital, demonstrating that, the combined effect of foreign equity portfolio flow and economic policy uncertainty has the opposite effect (i.e., reduces the cost of capital). Our results are robust to alternative specifications and endogeneity. 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.
  • Corporate board and dynamics of capital structure: Evidence from UK, France and Germany
    Corporate board and dynamics of capital structure: Evidence from UK, France and Germany Ezeani, Ernest; Kwabi, Frank; Salem, Rami; Usman, Muhammad; Mohammad, Rateb Theoretical arguments suggest that capital structure will adjust to the dynamics of the corporate governance environment. In line with this prediction, we examine the impact of board characteristics on capital structure dynamics and the speed of adjustment. Using 2690 firm-year observations for 2009-2018, we find that firms in a stakeholder-oriented corporate governance environment adjust their leverage faster than those in a shareholder-oriented environment. We also find that corporate board characteristics influence firms’ capital structure and speed of adjustment towards target leverage. Our findings are robust to alternative measures of leverage and endogeneity. The overall evidence supports the relevance of the corporate board's composition in both shareholder-oriented and stakeholder-oriented CG environments. We conclude that board composition mitigates agency conflict. open access article
  • Board Monitoring and Capital Structure Dynamics: Evidence from Bank-Based Economies
    Board Monitoring and Capital Structure Dynamics: Evidence from Bank-Based Economies Ezeani, Ernest; Salem, Rami; Kwabi, Frank Obenpong; Boutaine, Khalid; Komal, Bushra We examine the impact of board characteristics on the speed of adjustment and the capital structure dynamics of firms in bank-based economies. Using 3927 firm-year observations over a 10-year (2009-2019), we find that board characteristic influences firms' speed of adjustment in a bank-based (stakeholder-oriented) system. We also find some evidence that board characteristics have varying impacts on the capital structure of Japanese, French and German firms. We conclude that firms' capital structure reflects the corporate governance environment they operate. Our results are robust to accounting for endogeneity and alternative leverage measure. open access article
  • Ownership type, home country government-directed investment policies, and firm value in strategic sectors: evidence from Chinese acquiring firms
    Ownership type, home country government-directed investment policies, and firm value in strategic sectors: evidence from Chinese acquiring firms Boateng, Agyenim; Du, Min; Bi, Xiaogang; Kwabi, Frank; Glaister, Keith W. Using data of Chinese acquirers in strategic sectors, we assess the role of home government, and the effects of the interaction between ownership type and government-directed investment policies on acquiring firm value in cross-border acquisitions (CBA). We find that CBA activities in strategic sectors encouraged by the home country government through its investment policies experience significant increase in value. We also find that firms investing in government-designated strategic sectors generate wealth for acquirers, but, contrary to efficiency logic rooted in agency theory, state-owned enterprises (SOEs) appear to outperform private-owned enterprises (POEs). Further analysis indicates that three financial incentives associated with government-directed policies – namely, interest-rate reduction, tax incentives and direct subsidies – constitute sources of firm value. Our results raise several policy implications including the need for transparent and rule-based policies and governance systems to be developed and implemented by governments in the home and host countries to regulate state-supported firms investing in sensitive strategic sectors. open access article
  • The Impact of CEO Compensation and Excess Reserves on Bank Risk-taking: The Moderating Role of Monetary Policy
    The Impact of CEO Compensation and Excess Reserves on Bank Risk-taking: The Moderating Role of Monetary Policy Boateng, Agyenim; Nguyen, Vu Hong Thai; Du, Min; Kwabi, Frank, O. We examine the effects of CEO compensation, excess reserves, and role of monetary policy on bank risk-taking behaviour based on a sample of 88 Chinese commercial banks over the period of 2003-2014. We find evidence that suggests that incentives present in CEO compensation contracts and excess reserves exert a positive and significant impact on risk-taking and credit risk. However, we find that the positive effects of CEO compensation and excess reserves on risk-taking are cancelled out by the interaction of CEO compensation and excess reserves. Further analysis suggests that the central bank’s monetary policy serves to restrain the effects of an interaction between CEO compensation and excess reserves on bank risk-taking and credit risk. This study extends the theoretical model, which indicates that excess reserves are a major source of credit risk and notes that the effects of incentives inherent in CEO compensation contracts and excess reserves on bank risk policies are contingent on the monetary policy pursued by the central bank in China’s emerging economy 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 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.

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 articles information

1. Kwabi, F. O., Owusu-Manu, S., Boateng, A., Ezeani, E., Du, A. (2022). Economic Policy Uncertainty and Cost of Capital. Review of Quantitative Finance and Accounting (forthcoming).

2. Ezeani, A., Kwabi, F. O., Salem, R. (2022). Corporate Board and Dynamics of Capital Structure: Evidence from UK, France, and Germany. International Journal of Finance and Economics (forthcoming).

3. Owusu, A., Kwabi, F. O., Owusu, R., Ezeani, E. (2022). Determinant of Cost of Debt: Do CEO Tenure and Board Characteristics Matter? Review of Quantitative Finance and Accounting (forthcoming).

4. Boateng, A., Du, M., Bi, X., Kwabi, F.O., Glaister, K.W. (2021). Ownership type, home country government-directed investment policies, and firm value in strategic sectors: Evidence from Chinese acquiring firms. British Journal of Management (forthcoming).

5. Ezeani, E., Salem, R., Kwabi, F.O., Boutaine, K., Komal, B. (2021). Board monitoring and capital structure dynamics: Evidence from bank-based economics. Review of Quantitative Finance and Accounting (forthcoming). 

6. Boateng, A., Thai, N., Du, M., Kwabi, F.O. (2021). The impact of CEO compensation and excess reserves on bank risk-taking: The moderating role of monetary policy. Empirical Finance (forthcoming). 

7. Kwabi, F.O., Boateng, A., (2021). The effects of insider trading laws and enforcement on stock market transaction cost. Review of Quantitative Finance and Accounting, 56 (3), 939-964.

8. Du, M., Kwabi, F.O., Yang, T.L. (2021). State ownership, prior experience and performance: A comparative analysis of Chinese domestic and cross-border acquisitions. International Journal of Accounting and Information Management (forthcoming).

9. 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).

10. 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).

11. 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.

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

13. 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.

14. 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.

15. 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.

16. 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.

17. 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.

18. 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
  • Samuel Owusu-Manu
  • Nadina North
  • Manoj Koppula
  • Grace Nicholas
  • Alexia Niang

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".

7. Dr Katarzyna Jaskowiec (2021): "Does CEO compensation encourage risk-taking? Empirical evidence from FTSE350".

8. Dr Mathew Udenge (2022): "Consumer insurance fraud prevention initiatives in the UK insurance sector: A stakeholder perspective from Motor and Household insurance".

9. Dr Abdullah Mamoon (2022): "The Impact of Central Bank Independence and Transparency on the Cost of Capital, Equity Home Bias and Foreign Bias, Debt Home and Foreign Bias".

FRANK-KWABI