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Article
Publication date: 2 October 2009

Godfred A. Bokpin and Anastacia C. Arko

The purpose of this paper is to examine the effect of ownership structure and corporate governance on capital structure decisions of firms on the Ghana Stock Exchange (GSE).

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Abstract

Purpose

The purpose of this paper is to examine the effect of ownership structure and corporate governance on capital structure decisions of firms on the Ghana Stock Exchange (GSE).

Design/methodology/approach

To analyze the impact of ownership structure and corporate governance on firms' financing decisions, unbalanced panel data covering a period from 2002 to 2007 is employed using the seemingly unrelated regression approach to mitigate the effects of multicollinearity among the regressors.

Findings

The regression results reveal that managerial shareholding significantly positively influences the choice of long‐term debt over equity. Among the corporate governance variables, board size is found to be positively and statistically significantly related to capital structure choices. Firm level factors such as volatility in earnings, asset tangibility, dividend payout ratio and profitability are significant determinants of corporate capital structure decisions on the GSE. The findings are largely consistent with theories of capital structure decisions observed in the literature.

Originality/value

The main value of this paper is to provide a comprehensive understanding of the impact of forms of ownership and other governance practices on capital structure decisions of firms from an emerging market perspective.

Details

Studies in Economics and Finance, vol. 26 no. 4
Type: Research Article
ISSN: 1086-7376

Keywords

Article
Publication date: 25 February 2014

Anastacia C. Arko, Joshua Abor, Charles K.D. Adjasi and Mohammed Amidu

– The purpose of this paper is to examine the determinants of the dividend decisions of firms in Sub-Saharan Africa (SSA).

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Abstract

Purpose

The purpose of this paper is to examine the determinants of the dividend decisions of firms in Sub-Saharan Africa (SSA).

Design/methodology/approach

The paper applies a two-step estimation procedure using firm-level panel data for firms in selected SSA countries during the period from 1997 to 2007. In the first step the paper employs a probit model to estimate the parameters of the determinants of the decision to pay or not to pay dividends. In the second step the paper estimates the parameters of the dividend payout and dividend per share models by applying the generalised least squares techniques.

Findings

The results provide consistent evidence that dividend decision and its payments are influenced by firm profitability level, investment opportunity sets, taxation, leverage, institutional shareholding and risk. The results affirm the signalling, agency cost and free-cash flow theories of dividend policy.

Originality/value

The main value of this paper is identification of factors that influence dividend decisions of firms in SSA.

Details

Journal of Accounting in Emerging Economies, vol. 4 no. 1
Type: Research Article
ISSN: 2042-1168

Keywords

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