The determinants of the financing decisions of listed and non-listed firms in Ghana

Abstract

The study examined the financing decisions of 19 listed companies in comparison with 16 non-listed companies in Ghana. The study tested hypotheses related to capital structure determinants and debt policy decisions. The study found support for the pecking order hypothesis across all firms. The free cash flow hypothesis held for long-term debt decisions across firms but not the capital structure decisions. All forms of debt policy decisions were consistent with the matching principle except non-listed firms’ long-term debt. The study did not find any significant difference between listed and non-listed firms in the application of debt. Policy recommendations were provided.

Keywords: Capital Structure, Financial leverage, Debt instruments and Investments.