TY - JOUR
T1 - The link between small business governance and performance
T2 - The case of the Ghanaian SME Sector
AU - Kyereboah-Coleman, Anthony
AU - Amidu, Mohammed
PY - 2008
Y1 - 2008
N2 - The present study set out to examine corporate governance practices of SMEs in Ghana and whether there is any linkage between these governance practices and financial performance. We employed two levels of interaction to achieve our objectives: The first is an interview for a general understanding of governance issues in the SME sector and the subsequent design of a questionnaire for an exploration of the linkages between governance issues and firm financial performance by employing a linear model. The study reveals that governance structures in SMEs are jointly influenced by credit providers and business ethical considerations. The regression results show that board size, size of audit committees, corporate ethics and the proportion of outsiders on the audit committees have negative impact on financial performance while independence of the board and the presence of audit committees enhance firms' financial performance. The findings have some policy implications in that it shows that exporting SMEs are relatively profitable. It is recommended that in an attempt to promote exports, the legal and regulatory environment should be conducive for these firms.
AB - The present study set out to examine corporate governance practices of SMEs in Ghana and whether there is any linkage between these governance practices and financial performance. We employed two levels of interaction to achieve our objectives: The first is an interview for a general understanding of governance issues in the SME sector and the subsequent design of a questionnaire for an exploration of the linkages between governance issues and firm financial performance by employing a linear model. The study reveals that governance structures in SMEs are jointly influenced by credit providers and business ethical considerations. The regression results show that board size, size of audit committees, corporate ethics and the proportion of outsiders on the audit committees have negative impact on financial performance while independence of the board and the presence of audit committees enhance firms' financial performance. The findings have some policy implications in that it shows that exporting SMEs are relatively profitable. It is recommended that in an attempt to promote exports, the legal and regulatory environment should be conducive for these firms.
KW - Export sector
KW - Financial performance
UR - http://www.scopus.com/inward/record.url?scp=67649094676&partnerID=8YFLogxK
U2 - 10.1080/15228910802052880
DO - 10.1080/15228910802052880
M3 - Article
AN - SCOPUS:67649094676
SN - 1522-8916
VL - 9
SP - 121
EP - 143
JO - Journal of African Business
JF - Journal of African Business
IS - 1
ER -