The Decision to Go Public from an Emerging Market: The Ghanaian Case

Abstract

This paper examines the decision to go public on the Ghana Stock Exchange using data on both private and public firms. Analysis of the determinants of going public decision reveals that firms size, cost of debt, leverage and investment opportunities are the likely determinants of initial public offerings (IPO) in Ghana. In terms of post IPO performance, we find that the sample firms recorded a decrease in the level of investment opportunities, leverage as well as a reduction in cost of debt. This suggests that firms in Ghana go public to reduce their level of debt and not to fund investment opportunities.

Key words: IPO, stock market, the going public decision, Ghana.