Corporate governance determinants of capital structure, evidence from listed manufacturing firms on the ghana stock exchange (gse)

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The study seeks to evaluate the effect the corporate governance determinants on the capital structure of manufacturing firms listed on the Ghana stock exchange. The Ghanaian-listed manufacturing firms are chosen as the demographic for this research. Purposive sampling is used in this study to sample 15 manufacturing firms in Ghana. Secondary data is gathered through annual reports submitted by companies for the period (2005-2021). A GMM method of estimation is adopted to estimate the parameters involved in the study objectives. The total debt ratio and the long-term debt ratio have a positive correlation with board size. The relationship between managerial and institutional ownership and a company's capital structure is substantial. There is a statistically significant and positive relationship between ownership concentration on both the short and long-term debt ratios. Based on the findings of this study, it is evident that block holders, as opposed to widely dispersed shareholders, can exert pressure on management to incur additional debt to minimize managerial opportunism. There will be fewer agency disputes between management and shareholders if shareholders own a greater percentage of the company. In terms of managing a company's finances, the research offers several recommendations and real-world implications. The results will help policymakers build corporate governance rules and practices and make value-relevant capital structure decisions in line with the implications of the corporate governance mechanism. The research also provides empirical support for the idea that businesses might benefit from reduced agency costs and lower cost of capital if they implement governance procedures—specifically if they disclose key information voluntarily.
A thesis submitted to the department of accounting and finance, kwame nkrumah university of science and technology, kumasi in partial fulfillment of the requirement for the award of a master of science degree in accounting and finance