ABSTRACTThis study sought to provide empirical evidence on the determinants of capital structure of SMEs in Ghana. Specifically, the study sought to: assess the effects of owner-manager characteristics on capital structure; analyse the effects of firms’ characteristics on capital structure; examine the effects of management performance on capital structure; find …
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ABSTRACTThis study sought to provide empirical evidence on the determinants of capital structure of SMEs in Ghana. Specifically, the study sought to: assess the effects of owner-manager characteristics on capital structure; analyse the effects of firms’ characteristics on capital structure; examine the effects of management performance on capital structure; find the effects of external factors on capital structure; and find the determinants of capital structure of SMEs. Quantitative research design was adopted in which quota sampling techniques was employed to select 223 SME operators. The results of the study among other things showed that firm characteristics, owner-manager characteristics, management performance, and external factor are the determinant of capital structure of SMEs in Sunyani. However, owner-manager characteristics such as managerial qualities (MQ), managerial attitudes (MA), human capital (HC), relationships with banks and networks (RBN), proprietor’s preference, perception and attitude (PPPA), targets and objectives (TO), age, ethnicity, and culture significantly affected capital SMEs capital structure. The characteristics of the firm such as age and size as well influenced capital structure. Management performance in the area of profitability, assets structure, and business planning predict significantly influenced capital structure of SMEs. In terms of external factors, tax conditions, technological abilities and institutional and legal environment were the external factors of capital structure significantly affected capital structure of SMEs in Sunyani. The study recommends among other that: Firms should consult business consultants before undertaking business ventures.
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