• Capital movements

Capital movements

This study compares the capital structures of publicly quoted firms, large unquoted firms, and small and medium enterprises (SMEs) in Ghana. It finds that:

• quoted and large unquoted firms exhibit higher debt ratios than SMEs
• there is no significant difference between the capital structures of publicly quoted firms and large unquoted firms
• for all firms, short-term debt constitutes a high proportion of total debt
  

The study also finds that Ghananian firms' capital structure is determined by their:

• age
• size
• asset structure
• profitability
• risk
• managerial ownership
  

For SMEs, other factors are also important:

• the gender of the entrepreneur
• the firms' export status
• the industry it belongs to
• location
• the firms' form of business

Given the findings, policy should:

• improve the information environment
• place greater emphasis on the facilitation of equity capital
• encourage unquoted firms to access public equity capital by, for example, reducing listing requirements
• financially assist SMEs in specific industries
• financially assist SMEs owned by women
• financially assist SMEs located outside the capital
  

Firms should:

• maintain proper records
• think about entering the international markets
• consider more organised forms of business (if they are sole-proprietors)

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