Effect of corporate governance on the outcome of corporate investment decisions in Ghana
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2017-04
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Abstract
This study examines the effects that Corporate Governance has on the outcome of
Corporate Investment Decisions of Ghanaian Companies.
This research is conducted on 19 Ghanaian companies sub-divided into Multinational and
local Companies. Multiple regression analysis is used in this study in estimating the
relationship between corporate governance characteristics and the outcome of investing
decisions. The independent variables used which are Firm Size, Board Size, Board
Independence, CEO Duality, Size of Audit Committee and the Independence of Audit
Committee; represent the measure of corporate governance for this study. The results of
this study show that for all 19 Ghanaian Firms, the Board Size, Board Independence and
Size of Audit Committee are variables relevant in making sound investing decisions
whose benefits companies can enjoy over a number of years. For multinationals, Board
Independence, the Size of Audit Committee and the Independence of Audit Committee
have positive relationships with investing decisions while for local companies the Board
Size, Board Independence and the Independence of the Audit Committee are the
variables having a positive relationship with the outcome of investment decisions.
This paper adds to the limited evidence on the governance-performance relationship that
exists in Ghana but approaches the topic by focusing mainly on the outcome of investing
decisions (capital budgeting decisions). This study can inform governance policy making
in Ghana.
Description
Thesis submitted to the Department of Business Administration, Ashesi University College, in partial fulfillment of Bachelor of Science degree in Business Administration, April 2017
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Keywords
Ghana, corporate governance, capital budeting decisions, investment