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Please use this identifier to cite or link to this item: http://hdl.handle.net/123456789/6103

Title: Capital Structure and Performance of Listed Banks in Ghana
Authors: Awunyo-Vitor, Dadson
Badu, Jamil
Keywords: Capital structure
Listed Banks
Panel regression
Tobin’s q
Ghana Stock Exchange
Issue Date: Mar-2012
Publisher: Global Journal of Human Social Science
Citation: Global Journal of Human Social Science Volume 12; Issue 5, Version 1.0, March 2012
Abstract: In this paper, we empirically investigate the relationship between capital structure or leverage and performance of listed bank in Ghana from 2000 to 2010. Data was collected from Ghana stock exchange and annual report of the listed banks. Panel regression methodology was used to analyse the data. The result revealed that the banks listed on the Ghana Stock Exchange are highly geared and this is negatively related to the banks performance. The study shows that there is high level gearing among listed banks. This can be attributed to their over dependency on short term debt as a result relatively high Bank of Ghana Lending rate and low level of bond market activities.The regression result also revealed that capital Structure is inversely related to performance of the listed bank in terms of return on Equity and Tobin’s q. It is therefore, recommended that listed banks should intensify their efforts to rely on internally generated funds as their source of finance. In addition, the Government of Ghana should liaise with the stakeholders in the financial sector in order to develop bond market to enables the banks to raise long-term debt so as to avoid over-reliance of short-term debt which is associated with high cost. Furthermore, increased tax relief for the listed banks is likely to enable them to increase their retain earning and reduce reliance on debt consequently improve internal investment and performance.
Description: An article published by Global Journal of Human Social Science, Volume 12 Issue 5 Version 1.0, March 2012
URI: http://hdl.handle.net/123456789/6103
Appears in Collections:College of Agric and Natural Resources

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