Original Research

Internationalisation and financing options of Ghanaian SMEs

Joshua Abor
Acta Commercii | Vol 4, No 1 | a53 | DOI: https://doi.org/10.4102/ac.v4i1.53 | © 2004 Joshua Abor | This work is licensed under CC Attribution 4.0
Submitted: 05 December 2004 | Published: 05 December 2004

About the author(s)

Joshua Abor, University of Ghana Business School, Ghana

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This article presents a study of internationalisation and the financing options of Ghanaian small and medium scale nontraditional exporters. The article also examines how the age and size of an organisation affect the choice of financing. The results show a positive association between debt financing and the age of an organisation. Over time, organisations become more acceptable investments to lenders, and consequently older organisations are more likely to obtain debt financing than their younger counterparts. With respect to size, the results again indicate that larger organisations are more likely to receive debt financing. The results also show a positive relationship between degree of internationalisation and debt financing. The results suggest that as organisations engage more in international activities, they employ more debt but use less of equity financing. This is explained by the fact that organisations involved in international business tend to be more diversified and, as such, are capable of accommodating more debt capital


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