Corporate governance and financing choices of firms: A panel data analysis
Date
2006
Authors
Kyereboah-Coleman A.
Biekpe N.
Journal Title
Journal ISSN
Volume Title
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Abstract
We examine how corporate governance indicators such as board size, board composition and CEO duality impact on financing decisions of firms. Panel data covering the five year period 1999-2003 from forty-seven (47) listed firms on the Nairobi Stock Exchange (NSE) was used. Analysis was done within the Random-effects GLS regression framework. Findings of the study indicate that firms with larger board sizes employ more debt irrespective of the maturity period and also the independence of a board negatively and significantly correlates with short-term debts. Again, when a CEO doubles as board chairperson, less debt is employed. Thus, the study reaffirms the notion that the governance structure of a firm affects its financing choices. © 2006 The Authors. Journal compilation © 2006 Economic Society of South Africa.
Description
Keywords
corporate strategy, debt, financial system, firm size, panel data, stock market, Africa, South Africa, Southern Africa, Sub-Saharan Africa
Citation
South African Journal of Economics
74
4
74
4