Corporate governance and financing decisions of Ghanaian listed firms

Abstract

Purpose -This paper seeks to examine the relationship between corporate governance and the capital structure decisions of listed firms in Ghana.Design/methodology/approach -Multiple regression analysis is used in the study in estimating the relationship between the corporate governance characteristics and capital structure.Findings -The empirical results show statistically significant and positive associations between capital structure and board size, board composition, and CEO duality. The results generally indicate that Ghanaian listed firms pursue high debt policy with larger board size, higher percentage of non-executive directors, and CEO duality. The results also show a negative (though statistically insignificant) relationship between the tenure of the CEO and capital structure, suggesting that, entrenched CEOs employ lower debt in order to reduce the performance pressures associated with high debt capital.Originality/value -The main value of this paper is the analysis of the effect of corporate governance on financing decisions from the Ghanaian perspective.

Corporate governance and capital structure in the periods of financial distress. Evidence from Greece

“…Pfeffer and Salancick (1978) were the first who showed that there is a significant relationship between capital structure and board size. However, Abor (2007) proved that this significant relationship is positive. In contrast, Berger et al (1997) found that corporations which have many members on their board, in general, have low gearing levels.…”

“…On the other hand, Pfeffer and Salancick (1978) found that a high proportion of outside directors is associated with high leverage supporting the idea that independent directors help firms to raise more debt through the reduction of information asymmetry, the enhancement of a firm's status and the recognition and exploitation of all available resources. Jensen (1986), Berger et al (1997) and Abor (2007) also found a positive relationship between debt levels and outside directors.…”

The king reports, independent non-executive directors and firm valuation on the Johannesburg stock exchange

“…With respect to the African setting, a number of studies have analysed the impact of CG structures on a number of issues, such as financing decisions of firms (KyereboahColeman and Biekpe, 2006a;Abor, 2007;Abor and Biekpe, 2007), incidences of listing suspensions (Mangena and Chamisa, 2008) and dividend performance (Bokpin, 2011). A limited number of studies have also investigated the effects of different CG mechanisms, such as the frequency of board meetings (El Mehdi, 2007;Ntim and Osei, 2011), ownership structure (Mangena and Tauringana, 2008;Sand et al, 2010), board size (Ho and Williams, 2003;Kyereboah-Coleman et al, 2006) and board composition (Kyereboah-Coleman and Biekpe, 2006b;Sunday, 2008) on corporate performance with equally inconclusive results.…”

Sermaye Yapısını Etkileyen Faktörler: BIST Ulaştırma Endeksinde Bir Uygulama

“…From corporate governance perspective, as depicted in Tabled 7, solely Board Size has a weak positive significance on leverage consistent with Lu et al (2012), Abor (2007) and Sheikh and Wang (2012). The findings above hold when the dependent variable is taken as long-term leverage.…”