Board Size, Intensity of Board Activity, and Financial Performance of SMEs: Examining the Mediating Roles of Access to Capital and Firm Reputation

Authors

  • Abraham Ansong

DOI:

https://doi.org/10.17687/jeb.v3i2.45

Keywords:

Board size; intensity of board activity; financial performance; SMEs; Ghana

Abstract

This paper provides investigation on the effects of board size and intensity of board activity on the financial performance of small and medium scale enterprises. It further examines the mediating effects of access to capital and firms? reputation on these relationships. This cross sectional study considered primary data from 423 small and medium sized enterprises (SMEs) within the Accra Metropolis of Ghana using structured questionnaires. Standard regression and Baron and Kenny?s (1986) pattern of mediation analysis were employed to analyze the data. The results of the study revealed that board size had a positive relationship with financial performance while intensity of board activity did not. In addition, access to capital and firm reputation mediated the nexus between board size and financial performance. Since the relationship between intensity of board activity and financial performance was insignificant, access to capital and firm reputation did not mediate this relationship. It is recommended that SMEs should expand their board sizes and reduce the number of board meetings. Finally, the Government should provide guarantees to facilitate SMEs? access to financing from traditional banks. This would lead to the creation of more jobs and overall national development.

Author Biography

Abraham Ansong

Department of Management of Studies
University of Cape Coast
Cape Coast-Ghana

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Published

2015-12-31

How to Cite

Ansong, A. (2015). Board Size, Intensity of Board Activity, and Financial Performance of SMEs: Examining the Mediating Roles of Access to Capital and Firm Reputation. Journal of Entrepreneurship and Business, 3(2), 26–41. https://doi.org/10.17687/jeb.v3i2.45