Debt Financing, Information Sharing, and Profitability: Evidence from Listed Firms from an Emerging Economy
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Date
2023
Journal Title
Journal ISSN
Volume Title
Publisher
Journal of African Business
Abstract
This study investigates how credit information sharing conditions
debt financing to boost the profitability of 20 listed enterprises on
the Ghana Stock Exchange between 2003 and 2013. We employ
robust least squares and simultaneous bootstrapping models in
a panel setting. Our findings show that the impact of debt financing
profitability increases when it is subject to information sharing
and takes the shape of short, long, and total debts. In the worst-case
situation, contingent debt financing reduces the negative impact of
debt financing on profitability. Therefore, authorities must adopt
laws and legislation that deepen, widen, and strengthen credit
information sharing to offset the negative impact of information
asymmetry on loan financing and business profitability.
Description
Research Article
Keywords
Credit information sharing, debt financing, Ghana