Capital Structure and Firm’s Performance in Ghana. Do Macroeconomic Factors Matter?

  • George Owusu-Antwi Department of Accounting and Finance Central State University USA
  • James Antwi College of Business and Economics University of Delaware USA
  • Nana Twum Owusu-Peprah EcoBank Ghana Limited Accra, Ghana
  • Emmanuel Akoto Barnoh UT Bank, Accra Ghana.
Keywords: Capital Structure, Equity, Debt, Inflation, Ghana Stock Exchange.


The paper seeks to investigate how macroeconomic factors affect the relationship between capital structure and bank performance from 2004 to 2014. In this context we try to condition the postulated relations between capital structure and firm performance on the dynamics of the macroeconomic environment of Ghana. We considered the impact of some macroeconomic variables such as inflation and GDP growth. Panel data methodology is adopted in this study. This combines simultaneous cross-section and time series data. The paper employs samples of banks in Ghana. Using fixed effect regression estimation model, a relationship was established between performance (proxied by return on asset and return on equity) and the firms capital structure over a period of ten years. Hausman chi-square test was conducted in each equation.The macroeconomic variables, GDP growth were registered to be significant in both models. This signifies that macroeconomics matter in the bank’s capital structure and performance. Inflation however were found to be insignificant. We therefore recommend that macroeconomic policies should provide a conducive environment for banks operations, in addition the government should develop the bond market.


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How to Cite
Owusu-Antwi, G., Antwi, J., Owusu-Peprah, N. T., & Barnoh, E. (2016). Capital Structure and Firm’s Performance in Ghana. Do Macroeconomic Factors Matter?. Journal of Research in Business, Economics and Management, 6(2), 874-887. Retrieved from