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Financial Policy and Corporate Performance: Evidence from Emerging Market Economies

Author

Listed:
  • Godfred A. Bokpin
  • Joshua Abor

    (University of Ghana Business School)

Abstract

This paper analyses the effects of financial policy on corporate performance of emerging market firms. Using capital structure and dividend payout as measures of financial policy, we employ fixed effects panel model in our estimation. The results indicate that capital structure has negative effects on return on assets and return on equity but is positively related with market-to-book value ratio. Dividend payout is also positively related with return on assets and return on equity. We also document that macro-level factors such as stock market development and GDP per capita are relevant in explaining corporate financial performance.

Suggested Citation

  • Godfred A. Bokpin & Joshua Abor, 2009. "Financial Policy and Corporate Performance: Evidence from Emerging Market Economies," The African Finance Journal, Africagrowth Institute, vol. 11(1), pages 24-36.
    • Handle: RePEc:afj:journl:v:11:y:2009:i:1:p:24-36
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    File URL: http://www.journals.co.za/ej/ejour_finj.html
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    Cited by:

    1. repec:aio:manmar:v:xvi:y:2019:i:1:p:19-38 is not listed on IDEAS
    2. Chijioke NWACHUKWU & Minh VU HIEU & Helena CHLÁDKOVÁ & Olatunji FADEYI, 2019. "Strategy Implementation Drivers In Correlation With Strategic Performance," Management and Marketing Journal, University of Craiova, Faculty of Economics and Business Administration, vol. 0(1), pages 19-38, May.

    More about this item

    Keywords

    Financial Policy; Corporate Performance; Emerging Markets;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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