What Drives Corporate Governance Quality in Emerging African Economies? Evidence from Ghana - Conference Paper

This paper investigates the determinants of good corporate governance in Ghanaian listed firms for the study period 2000 to 2009. We develop a corporate governance index and its six sub-indices to measure firm-level governance quality. Annual reports of the Ghanaian listed firms are scored according to their governance disclosure during the whole period, 2000-2009 and pre 2003 and post 2003 introduction of the Ghanaian Code. A panel data analytical framework was used to find the determinants of strong corporate governance in Ghanaian listed firms. The empirical results over the whole period, 2000-2009 show statistically significant and positive relationship between external financing needs, firm size, institutional shareholdings and governance quality measured by the Ghanaian corporate governance index. While we find no relationship between external financing needs, director shareholding, firm performance measures and governance quality pre 2003, the result is positive and statistically significant for post 2003. The most consistent relationship we find concerns firm size and institutional shareholdings. However, growth opportunities appear to have no association with strong governance in Ghanaian firms.