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Corporate Governance And Financing Choices Of Firms: A Panel Data Analysis

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  • Anthony Kyereboah‐coleman
  • Nicholas Biekpe

Abstract

We examine how corporate governance indicators such as board size, board composition and CEO duality impact on financing decisions of firms. Panel data covering the five year period 1999‐2003 from forty‐seven (47) listed firms on the Nairobi Stock Exchange (NSE) was used. Analysis was done within the Random‐effects GLS regression framework. Findings of the study indicate that firms with larger board sizes employ more debt irrespective of the maturity period and also the independence of a board negatively and significantly correlates with short‐term debts. Again, when a CEO doubles as board chairperson, less debt is employed. Thus, the study reaffirms the notion that the governance structure of a firm affects its financing choices.

Suggested Citation

  • Anthony Kyereboah‐coleman & Nicholas Biekpe, 2006. "Corporate Governance And Financing Choices Of Firms: A Panel Data Analysis," South African Journal of Economics, Economic Society of South Africa, vol. 74(4), pages 670-681, December.
    • Handle: RePEc:bla:sajeco:v:74:y:2006:i:4:p:670-681
    DOI: 10.1111/j.1813-6982.2006.00097.x
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    Cited by:

    1. Collins G. Ntim, 2013. "Corporate Governance, Affirmative Action and Firm Value in Post-apartheid South Africa: A Simultaneous Equation Approach," African Development Review, African Development Bank, vol. 25(2), pages 148-172, June.
    2. Pillai, Rekha & Al-Malkawi, Husam-Aldin Nizar, 2018. "On the relationship between corporate governance and firm performance: Evidence from GCC countries," Research in International Business and Finance, Elsevier, vol. 44(C), pages 394-410.
    3. Godfred A. Bokpin & Anastacia C. Arko, 2009. "Ownership structure, corporate governance and capital structure decisions of firms," Studies in Economics and Finance, Emerald Group Publishing Limited, vol. 26(4), pages 246-256, October.
    4. Muhammad Iqbal & Faisal Javed, 2017. "The Moderating Role of Corporate Governance on the Relationship between Capital Structure and Financial Performance: Evidence from Manufacturing Sector of Pakistan," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 6(1), pages 89-105, January.
    5. Azhar Abdul Rahman, 2018. "Quality of Information and the Moderating Effect of Board Size on SME Financial Structure: Malaysian Evidence," The Journal of Social Sciences Research, Academic Research Publishing Group, pages 851-859:2.
    6. Ayman Hassan Bazhair, 2023. "Board Governance Mechanisms and Capital Structure of Saudi Non-Financial Listed Firms: A Dynamic Panel Analysis," SAGE Open, , vol. 13(2), pages 21582440231, May.
    7. Munisi, Gibson & Hermes, Niels & Randøy, Trond, 2014. "Corporate boards and ownership structure: Evidence from Sub-Saharan Africa," International Business Review, Elsevier, vol. 23(4), pages 785-796.

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