The Effect of Capital Structure on Organizational Performance of Listed Ghana Club 100 Companies.

The paper examines the effect of capital structure on the organizational performance of listed Ghana Club 100 companies on the Ghana Stock Exchange during a 10-year period from 2007 to 2016. The study focuses on Ghana Club 100 companies because these companies are touted as the role model for their peers. The Ghana Club 100 companies are the top 100 companies in Ghana that are ranked annually in order of excellent performance by the Ghana Investment Promotion Center. The three key ranking criteria used by the GIPC are size, profitability and growth. The study employs a Fixed Effect Panel Regression Model to test these variables in the light of capital structure adequacy and performance. The results showed a negative relationship between capital structure and organizational performance. Specifically, the different measures of debt to total capital reduce firms' performance. The study is robust to the use of different measures of capital structure. The study proposes that the high gearing levels among GC 100 firms are not profit enhancing. [ABSTRACT FROM AUTHOR]