Determinants of Shareholder Value Creation of Listed Banks in Ghana

Abstract

This work aims at determining the determinants of shareholder value creation of listed banks in Ghana. The analyses are performed using panel data derived from the financial statements of the listed banks on the Ghana Stock Exchange (GSE) from 2006 to 2010financial years inclusive. The results of the analysis show that leverage, dividend policy, and return on equity respectively are statistically significant positive determinants of shareholder value. This reveals that increase (or decrease) in leverage, dividend payout and profitability respectively enhances (or attenuates) the wealth of shareholders. The results also reveal that bank size is a significant determinant of shareholder value, but it is negatively related to the latter. Finally, although banknature has a positive coefficient, it is not significant in determining shareholder value.