n African Finance Journal - What determines the capital structure of listed firms in Ghana?
|Article Title||What determines the capital structure of listed firms in Ghana?|
|© Publisher:||AfricaGrowth Institute|
|Journal||African Finance Journal|
|Author||Joshua Abor and Nicholas Biekpe|
|Publication Date||Jan 2005|
|Pages||37 - 48|
|Keyword(s)||Capital structure, Debt ratio, G3, G32, Ghana and Leverage|
This paper seeks to empirically identify the determinants of the capital structure of listed firms on the Ghana Stock Exchange during the most recent six-year period. Ordinary Least Square model is used to estimate the regression equation. The results indicate that, total debt constitutes more than half of the capital of listed firms in Ghana. The results also show positive associations between debt ratio (capital structure) and firm size and growth, while asset tangibility, risk, corporate tax and profitability are negatively related to debt ratio. The results generally support the pecking order theory proposed by the theoretical model.
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