Corporate governance and capital structure of banks in Ghana
No Thumbnail Available
Date
2021
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
KNUST
Abstract
Banks play an essential financial function within the economy. The economic growth is a function of an efficient and stable banking system while governance in industries have been explain as how organizations are control. Corporate governance has a link with organization capital structure. When corporate governance is poor, it affects firm’s performance and financing decision. The recent financial crises in the banking sector have made it necessary to examine the role of governance and financing pattern in banking industry. The study employs a secondary data from 208 years of observation consisting of 21 banks from 2008 to 2017 using cross sectional fixed effect analysis to establish the association between corporate governance and capital structure. The finding suggests a significant positive association ownership, return on equity and firm size to capital structure. These indicate that banks in Ghana purse debt using these as a mechanism while board size and return on asset also record significant but negative. Though they are negative, it affirms the pecking order theory that state that firms should first finance its project with internal funds before sourcing for alternative. The finding also suggests that board diversity significant and negatively related to capital structure which support the pecking order theory that states that firm should rather use internal funds before they seek for alternative funds.
Description
A Thesis submitted to the College of humanities and Social Sciences Department of Accounting and Finance in Partial Fulfillment of the Requirements for the Degree of master of science in finance