The Effect of Ownership Structure and Corporate Governance on Capital Structure of Ghanaian Listed Manufacturing Companies
The study explores the relationship between ownership structure and corporate governance on capital structure of some listed manufacturing companies in Ghana Stock Exchange. This study was motivated by the fact that although the concept of corporate governance has been researched on in literature, no clear evidence exist of its study in Ghana relating to ownership structure on leverage. The study covers the period 2007 to 2011 for which firm level data for eight (8) randomly selected manufacturing listed companies from Ghana Stock Exchange has been examined by using descriptive, correlation and multivariate regression analysis. Corporate governance variables employed are board size, board composition, and CEO/Chair duality. Impact of ownership has also been examined by using managerial and institutional shareholding. Similarly influence of controlled variables like firm size and profitability on firms’ financing mechanism is also investigated. Results reveal that Board Size, Board Composition, Institutional and Managerial shareholding is significantly correlated with leverage ratio positively, whereas it is negatively influenced by CEO/Chair duality. However, firm size and return on assets are found to have a positive and negative significant effect on capital structure respectively. Therefore results suggest that corporate governance and ownership structure play important role in firm’s capital mix determination.
Volume (Year): 4 (2014)
Issue (Month): 1 (January)
|Contact details of provider:|| Web page: http://hrmars.com/index.php/pages/detail/Accounting-Finance-Journal|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Anderson, Ronald C. & Mansi, Sattar A. & Reeb, David M., 2004. "Board characteristics, accounting report integrity, and the cost of debt," Journal of Accounting and Economics, Elsevier, vol. 37(3), pages 315-342, September.
- Chittenden, Francis & Hall, Graham & Hutchinson, Patrick, 1996. "Small Firm Growth, Access to Capital Markets and Financial Structure: Review of Issues and an Empirical Investigation," Small Business Economics, Springer, vol. 8(1), pages 59-67, February.
- William Lang & Julapa Jagtiani, 2010.
"The Mortgage and Financial Crises: The Role of Credit Risk Management and Corporate Governance,"
Atlantic Economic Journal,
Springer;International Atlantic Economic Society, vol. 38(2), pages 123-144, June.
- William Lang & Julapa Jagtiani, 2010. "The Mortgage and Financial Crises: The Role of Credit Risk Management and Corporate Governance," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 38(3), pages 295-316, September.
- Graham, John R. & Harvey, Campbell R., 2001. "The theory and practice of corporate finance: evidence from the field," Journal of Financial Economics, Elsevier, vol. 60(2-3), pages 187-243, May.
- Myers, Stewart C, 1984. " The Capital Structure Puzzle," Journal of Finance, American Finance Association, vol. 39(3), pages 575-92, July.
- Timothy J. Brailsford & Barry R. Oliver & Sandra L. H. Pua, 2002. "On the relation between ownership structure and capital structure," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 42(1), pages 1-26.
- Berger, Allen N. & Bonaccorsi di Patti, Emilia, 2006.
"Capital structure and firm performance: A new approach to testing agency theory and an application to the banking industry,"
Journal of Banking & Finance,
Elsevier, vol. 30(4), pages 1065-1102, April.
- Allen N. Berger & Emilia Bonaccorsi di Patti, 2002. "Capital structure and firm performance: a new approach to testing agency theory and an application to the banking industry," Finance and Economics Discussion Series 2002-54, Board of Governors of the Federal Reserve System (U.S.).
- Myers, Stewart C., 1984. "Capital structure puzzle," Working papers 1548-84., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
- Shleifer, Andrei & Vishny, Robert W, 1986.
"Large Shareholders and Corporate Control,"
Journal of Political Economy,
University of Chicago Press, vol. 94(3), pages 461-88, June.
- Ted Lindblom & Gert Sandahl & Stefan Sjogren, 2011. "Capital structure choices," International Journal of Banking, Accounting and Finance, Inderscience Enterprises Ltd, vol. 3(1), pages 4-30.
- Zwiebel, Jeffrey, 1996. "Dynamic Capital Structure under Managerial Entrenchment," American Economic Review, American Economic Association, vol. 86(5), pages 1197-1215, December.
- Stewart C. Myers, 1984. "Capital Structure Puzzle," NBER Working Papers 1393, National Bureau of Economic Research, Inc.
- Victor Murinde & Juda Agung & Andy Mullineux, 2004. "Patterns of Corporate Financing and Financial System Convergence in Europe," Review of International Economics, Wiley Blackwell, vol. 12(4), pages 693-705, 09.
- Margaritis, Dimitris & Psillaki, Maria, 2010. "Capital structure, equity ownership and firm performance," Journal of Banking & Finance, Elsevier, vol. 34(3), pages 621-632, March.
- Myers, Stewart C. & Majluf, Nicolás S., 1945-, 1984. "Corporate financing and investment decisions when firms have information that investors do not have," Working papers 1523-84., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Yu Wen & Kami Rwegasira & Jan Bilderbeek, 2002. "Corporate Governance and Capital Structure Decisions of the Chinese Listed Firms," Corporate Governance: An International Review, Wiley Blackwell, vol. 10(2), pages 75-83, 04.
- Helen Short & Kevin Keasey & Darren Duxbury, 2002. "Capital Structure, Management Ownership and Large External Shareholders: A UK Analysis," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 9(3), pages 375-399.
When requesting a correction, please mention this item's handle: RePEc:hur:ijaraf:v:4:y:2014:i:1:p:109-118. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Hassan Danial Aslam)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.