Factors Influencing Capital Structure Choices in Ghanaian Manufacturing Small and Medium Enterprises (Smes): A Regional Perspective from Greater Accra

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Stephen Oteng, Ashwinkumar A. Patel

Abstract

The paper investigates the factors influencing the financial leverage composition of small and medium-sized enterprises in the Greater Accra Region. Given the sector's significant contribution to Ghana's GDP, understanding its capital structure is crucial for the country's economic growth. A sample of 50 manufacturing SMEs was randomly selected, and data was collected through a structured questionnaire. Stata was used to analyse the data. The findings indicate that asset structure negatively impacts capital structure, whereas firm size, profitability, and interest rates have positive effects. Conversely, a negative correlation is found between firm age and financial leverage composition. The research outcomes suggest that policymakers encourage firms to optimize their asset structure, promote firms’ growth and development, and foster a conducive business environment. Regulatory bodies should review and revise regulatory frameworks, provide incentives for firm growth, and monitor and regulate interest rates.

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How to Cite
Stephen Oteng, Ashwinkumar A. Patel. (2025). Factors Influencing Capital Structure Choices in Ghanaian Manufacturing Small and Medium Enterprises (Smes): A Regional Perspective from Greater Accra. European Economic Letters (EEL), 15(1), 827–834. Retrieved from https://eelet.org.uk/index.php/journal/article/view/2457
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