Global Financial Crisis and Determinants of Capital Structure: Evidence from Ghanaian Non-Financial Listed Firms
Year: 2020
Type: article
Abstract: This study uses Generalized Method of Moments (GMM) to analyze the effects of macroeconomic and firmspecific factors on the capital structure of non-financial listed firms in Ghana, for both the normal period (2006-2016) and the global financial crisis period (2008-2009). Real GDP growth, firm size, profitability, tangibility, and growth opportunities have a significant effect on varying leverage ratios of sample firms in the normal period. Inflation and real GDP growth do not significantly influence the financing choice of sample firms during the global financial crisis period. However, profitability, firm size, tangibility, liquidity, and growth opportunities have significant effects on capital structure decisions of sample firms, which could differ in periods of the global financial crisis. Our findings illuminate the possible role of the trade-off, pecking order and agency cost theories in the capital structure of sample firms despite the crisis period. The study also offers policy implications on the need for the development of capital markets as well as the ability of managers to influence corporate capital structure to remain competitive regardless of a global financial crisis event
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3205526956