Capital Structure Decisions Nexus on Listed Non-Financial Institutions’ Performance in Ghana

Job Boahen
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Job Boahen: Ph.Dc, Valley View University, Accra-Ghana

International Journal of Research and Innovation in Social Science, 2022, vol. 06, issue 02, 82-88

Abstract: The study examined capital structure decisions nexus on listed non-financial institutions in Ghana using quantitative research approach and secondary data in the form of financial statements obtained from the Ghana Stock Exchange for the period 2014 to 2020. The study used a sample size of 22 from a population of 33 comprising total non-financial listed institutions on the Ghana Stock Exchange. Financial and insurance institutions totalling 9, were excluded to mitigate any impact of outliers since the financial market is highly regulated with varied set of rules and regulations. Capital structure was determined using return on capital employed computed from the financial statements of the sampled firms. The findings showed an indirect negative association with debt finance and significant direct association with equity finance with respect to return on capital employed. The study concluded that capital structure decisions positively affect equity source of finance and thus recommends that listed firms in Ghana should maximize equity funding due to the expensive nature of debt finance in developing countries. Equity finance also improves management by bringing in experts and experienced shareholders to facilitate the routine operations of the firms.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:bcp:journl:v:06:y:2022:i:02:p:82-88

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