Showing papers by "Joshua Abor published in 2008"

Determinants of the Capital Structure of Ghanaian Firms

Abstract: This study compares the capital structures of publicly quoted firms, large unquoted firms, and small and medium enterprises (SMEs) in Ghana. Using a panel regression model, the paper also examines the determinants of capital structure decisions among the three sample groups. The results show that quoted and large unquoted firms exhibit significantly higher debt ratios than do SMEs. The results did not show significant difference between the capital structures of publicly quoted firms and large unquoted firms. The results reveal that short-term debt constitutes a relatively high proportion of total debt of all the sample groups. The regression results indicate that age of the firm,size of the firm, asset structure, profitability, risk and managerial ownership are important in influencing the capital structure decisions of Ghanaian firms. For the SME sample, it was found that factors such as the gender of the entrepreneur, export status, industry,location of the firm and form of business are also important in explaining the capitalstructure choice. The study provides useful recommendations for policy direction and management of these firms.

An examination of hospital governance in Ghana

Abstract: – The purpose of this paper is to examine the nature of governance structures in Ghanaian hospitals by comparing the governance systems in public and private hospitals., – This study employs a comparative case methodology. It compares the governance structures in private hospitals to that of public hospitals in Ghana to ascertain whether they exhibit different or similar governance systems. The results obtained are analyzed and discussed to ascertain the extent to which the governance structures in these hospitals conform to Taylor's principles of good governance., – The results of the study revealed numerous differences in the governance structures in private and public hospitals in Ghana. From the review of Taylor's principles of good governance and the comparative case analysis, it was observed that some of the principles are not present in the current hospital governance systems., – The findings of this paper have important implications for proper governance and management of the Ghanaian health institutions.

Agency theoretic determinants of debt levels: evidence from Ghana

Abstract: Purpose – The purpose of this study is to examine the relationship between agency factors and the debt level of Ghanaian small and medium enterprises (SMEs). Design/methodology/approach – Generalized least squares model is used to estimate the regression equation. Findings – The results indicate that managerial ownership is negatively related to debt level. This suggests that SMEs with insider shareholders may prefer lower leverage to reduce the risk of insolvency. The results also show that SMEs with many shareholders are less likely to employ debt finance. Firms with many shareholders are not likely to entertain the fear of loss of control since the firm is seen as group‐owned. Originality/value – The findings of this study generally suggest that managerial ownership is important in explaining the capital structure of Ghanaian SMEs. This study extends our understanding of the agency theory and the capital structure of SMEs from the Ghanaian context.

How Does Foreign Direct Investment affect the Export Decisions of Firms in Ghana

Abstract: Foreign direct investment (FDI) has been identified to promote exports of host countries by augmenting domestic capital for exports, helping to transfer technology and new products for exports, facilitating access to new and large foreign markets, providing training for the local workforce, and upgrading technical and management skills. However, little is known on the role of FDI in the export behaviour of firms in developing countries. The main questions raised in this study are: how does FDI affect the export decisions of firms? How does FDI affect export performance of firms? This study examined the export-decision and export performance within the Ghanaian manufacturing sector on a panel of plants from 1991 to 2002. Using a probit model, the results show that FDI has a positive effect on firms' decision to export. The random effect results also reveal a positive relationship between FDI and export performance. Clearly, the results of this study indicate that FDI is very relevant in influencing the export decisions and export performance of Ghanaian firms. The findings have significant implications for policy in terms of promoting initiatives to encourage more FDI inflows in the country.

Foreign direct investment and employment: host country experience

Abstract: This study investigates the effect of foreign direct investment (FDI) on employment creation and wages in Ghana. A simultaneous panel regression model is used in estimating the effect FDI has on employment and wages. The results of this study indicate that FDI has a statistically significant and positive effect on employment levels in Ghana, but has an insignificant effect on wages. FDI can greatly augment domestic efforts by creating more jobs in the economy. The results clearly demonstrate that FDI flows affect employment quantitatively, but not necessarily qualitatively. The study identifies other factors including, productivity, wages, sub-sector, and location as important in influencing employment levels. Also, productivity, labour union, firm size, sub-sector, and location are noted as significant in affecting wages in Ghana. The main value of this paper is in respect of the fact that it provides insight into the effects of FDI flow on employment from a host country perspective. The study recommends...

Trends in cross border mergers and acquisitions in Africa

Abstract: Cross border MA Greenfield investments and cross border mergers and acquisitions (M&As). With Greenfield investments, a foreign investor establishes a new venture in the host country. Cross border M&As occur when a foreign investor purchases or acquires an existing enterprise in the host country. Acquisitions are dominant forming about 97% of cross border M&A activity. Cross-border M&As are a part of economic life in a liberalizing and globalizing world (UNCTAD, 2000). They are an important means through which MNCs create a global presence. Most of the growth in international production in recent times has taken place through cross border M&A activity.