Ownership structure, corporate governance and corporate liquidity policy Evidence from the Ghana Stock Exchange

Ownership structure, corporate governance and corporate liquidity policy Evidence from the Ghana... Purpose – The purpose of this paper is to examine the impact of ownership structure and corporate governance on corporate liquidity policy from a developing country perspective, Ghana Stock Exchange (GSE). Design/methodology/approach – The authors adopt multiple regression analysis in estimating the relationship between ownership structure, corporate governance and corporate liquidity policy as well as the impact of corporate governance on insider ownership. Findings – The authors find that foreign share ownership significantly predicts corporate cash holding on the GSE. The empirical result also portrays positive and statistically significant relationship between board size, financial leverage, firm size, profitability and corporate liquidity holding, and a negative and statistically significant relationship between board composition and corporate liquidity holding. The authors also document positive and statistically significant relationship between the various industry classifications namely manufacturing, distribution and the pharmaceutical industry and corporate cash holdings on the GSE but did not however find significant relationship between corporate governance and insider ownership on the GSE. The authors found positive relationship between Tobin's Q and inside ownership. Originality/value – The main value of this paper is to analyze the relationship between ownership structure, corporate governance and corporate liquid policy from a developing country perspective. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Financial Economic Policy Emerald Publishing

Ownership structure, corporate governance and corporate liquidity policy Evidence from the Ghana Stock Exchange

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Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
1757-6385
DOI
10.1108/17576381111152236
Publisher site
See Article on Publisher Site

Abstract

Purpose – The purpose of this paper is to examine the impact of ownership structure and corporate governance on corporate liquidity policy from a developing country perspective, Ghana Stock Exchange (GSE). Design/methodology/approach – The authors adopt multiple regression analysis in estimating the relationship between ownership structure, corporate governance and corporate liquidity policy as well as the impact of corporate governance on insider ownership. Findings – The authors find that foreign share ownership significantly predicts corporate cash holding on the GSE. The empirical result also portrays positive and statistically significant relationship between board size, financial leverage, firm size, profitability and corporate liquidity holding, and a negative and statistically significant relationship between board composition and corporate liquidity holding. The authors also document positive and statistically significant relationship between the various industry classifications namely manufacturing, distribution and the pharmaceutical industry and corporate cash holdings on the GSE but did not however find significant relationship between corporate governance and insider ownership on the GSE. The authors found positive relationship between Tobin's Q and inside ownership. Originality/value – The main value of this paper is to analyze the relationship between ownership structure, corporate governance and corporate liquid policy from a developing country perspective.

Journal

Journal of Financial Economic PolicyEmerald Publishing

Published: Aug 9, 2011

Keywords: Ownership structure; Corporate governance; Cash holdings; Ghana

References

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