Corporate liquidity management of listed firms in Ghana
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Date
2009-09
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Publisher
Asia-Pacific Journal of Business Administration
Abstract
Purpose The purpose of this paper is to examine corporate liquidity management of companies listed on the Ghana Stock Exchange (GSE) with the aim of ascertaining the determinants of corporate liquidity holdings. Design/methodology/approach The paper adopts a dynamic panel model where a lagged dependable variable is introduced as an explanatory variable. Annual data from the annual reports and financial statements of the firms together with the ITGSE Factbook/IT are used in the gathering of data spanning 1991-2007. The Arrellano-Bond estimator is used which incorporates the Sargan test for over identification. Findings Leverage is found to be not significant to Ghanaian-listed firms' liquidity demand perhaps due to the developmental stage of the financial market. However, liquidity is found to be statistically significantly influenced by a target liquidity level, size of the firm, return on assets and net working capital. Originality/value This is the first of its kind in the country despite the numerous studies carried out on the GSE. © 2009 Emerald Group Publishing Limited. All rights reserved.
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Keywords
Corporate strategy, Ghana, Liquidity, Stock exchanges
Citation
Zangina Isshaq, Godfred Alufar Bokpin, (2009) "Corporate liquidity management of listed firms in Ghana", Asia-Pacific Journal of Business Administration, Vol. 1 Issue: 2, pp.189-198, https://doi.org/10.1108/17574320910989122