The Stock Market and the Financing of Corporate Growth in Africa: The Case of Ghana

Charles Amo Yartey

Emerging Markets Finance and Trade, 2009, vol. 45, issue 4, 53-68

Abstract: This paper examines corporate financing patterns in Ghana, in particular, whether listed Ghanaian corporations make considerable use of the stock market to finance their growth. The paper also examines econometrically the effect of stock market development on the importance of debt relative to external equity in the balance sheet of Ghanaian firms. The results show that the average listed Ghanaian firm finances its growth mainly from short-term debt. The stock market, however, is the most important source of longterm external finance. Stock market development tends to shift the financial structure of Ghanaian firms toward more equity and less debt. Overall, the evidence suggests that the stock market is a surprisingly important source of finance for funding corporate growth.

Keywords: corporate finance; corporate growth; Ghana; stock markets (search for similar items in EconPapers)
Date: 2009
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