Annotated Bibliography on Finance and Capital Structure

This annotated bibliography presents concise summaries of several research articles focused on various aspects of finance, particularly within the context of developing economies. The articles explore topics such as capital structure determinants in Ghanaian firms, the impact of SME financing on economic growth in Malawi, the role of central banks in financing global development, the effects of traditional micro-finance mechanisms ('susu') on MSEs in Ghana, the relationship between working capital efficiency and firm profitability in Nigeria and Kenya, the influence of capital structure on firm performance in Nigeria, entrepreneurial development deficiencies, the relationship between SME financing and bank profitability in Ghana, and the financing choices of SMEs in Ghana. The summaries highlight the methodologies employed, key findings, and limitations of each study, providing a comprehensive overview of the research landscape in these areas. The bibliography includes studies using quantitative and qualitative data analysis, regression models, and survey methods. The studies cover a range of countries including Ghana, Malawi, Nigeria and Kenya. The studies also look at the impact of finance on SMEs and the banking sector.

Running head: ANNOTATED BIBLIOGRAPHY
ANNOTATED BIBLIOGRAPHY
Name of the Student
Name of the University
Author Note

1ANNOTATED BIBLIOGRAPHY
Abor, J. (2008). Determinants of the capital structure of Ghanaian firms.
In this article the author focuses into the comparison of the structures of the capital
and the capital structures decisions determinants of quoted, unquoted and SMEs of Ghana.
Panel Regression method has been used by the author as the research method. Few of the
concepts discussed in the literature section of the paper are structure of optimal capital,
explanation of capital structure based on tax benefits and similar concepts further. The
determinants of the capital structure that has been found out by the regression method as
described by the author in the research methodology section of the paper are firm age, size of
the firm, structure of the asset, profitability, growth of the firm, firm risk, taxation,
managerial ownership and few other miscellaneous factors. The conclusion derived from the
research said that debt ratios are significantly higher of the quoted and unquoted firms as
compared to that of the SMEs and short-term debts adds up to form higher debt for all
samples.
The paper comprises of quantitative data analysis that is always useful for a
successful research. Precise regression method adds up the list of advantages of the paper.
Addition of tables with the data used proves the paper to be an authenticated one. Though the
paper is all over advantageous but the paper fails to show significant differences in the
structures of the capital for the quoted and unquoted groups.
Zidana, R. (2015). Small and Medium Enterprises (SMEs) financing and economic growth in
Malawi: Measuring the impact between 1981 and 2014. Journal of Statistics Research
and Reviews, 1(1), 1-6.
This article aims to determine the corresponding growth in economic condition in
Malawi by financing the MSMEs that is, through the process of commercial banking system.
In addition to it, the secondary focus of the paper relied on the levels of the rate of interest

2ANNOTATED BIBLIOGRAPHY
that had been a primary issue for the MSMEs to have the access for the finance and its effect
on the economic condition of Malawi for the same period. The author has applied the method
of OLS that is, Ordinary Least Squares for the quantitative data analysis for the research. In
the introduction section of the paper, few statistics were mentioned by the author in respect to
the employment provided by the SMEs and the overall global business aspects. The brief
literature review section of the paper accounts that 99% of the firms in developing countries
fall under the category of SME and also the constraints of the growth of the SME are also
discussed along with focussing into the relationship of rate of interest and the growth in
economy. After the tests and its results the paper ends with a conclusion that the rising
interest rates affected the MSMEs negatively and the financing broadening may result
negative for the MSMEs.
Depending on the topic, the paper is too brief to realise the results and its
implications. The conclusions may be right for the sample of the paper but on a wide basis
the result may vary and the paper may contradict the actual result.
Dafe, F., & Volz, U. (2015). Financing global development: The role of central
banks. German Development Institute/Deutsches Institut für Entwicklungspolitik
(DIE) Briefing Paper, 8.
The authors of this article solely focussed on the roles of the Central Banks in the
financial development and growth at a global rate. Among which extra attention has been
provided to the regions which are under developmental stage. One of the mentioned countries
in the article is Nigeria. The article primarily discussed about how the central banks has come
out of the orthodoxy of financing the established companies or organisations and since 1980
central banks has taken the initiative of funding the SMEs as they play an important role in
the development and growth of the economic condition of any country. In the article the

3ANNOTATED BIBLIOGRAPHY
authors mentioned about how the central bank of Nigeria has provided the SMEs with capital
in order to develop them. The central banks has also introduced credit guarantee schemes
there. The later part of the article dealt with the kinds of challenges that arised due to
widening of policies and the maintenance of the balance and stability in development.
The article is being presented in a generalised manner which could be counted as its
demerit. The article dealt with qualitative data and no such firm records or statistics has been
presented in the report. Rather putting emphasis on some particular under-developed region
could have been better for the article.
Alabi, J., Alabi, G., & Ahiawodzi, A. (2007). Effects of susu-a traditional micro-finance
mechanism on organized and unorganized micro and small enterprises (MSEs) in
Ghana. African Journal of Business Management, 1(8).
The authors of this article puts their focus onto one of the ancient and traditional
forms of banking in Africa known as “susu” and its impact over both organised and
unorganised MSEs in Ghana. It also executes an analysis of comparative nature over the
impact on the organised and unorganised MSEs. The methodology followed by the authors is
a survey of cross-sectional nature and hence a quantitative analysis has been done over the
collection of data regarding three components. Authors did provide with a precise
understanding of the “susu” system and the later part of the paper various contexts of “susu”
and in how it has been implemented in Ghana has been discussed in detail. The authors
reached to the conclusion where it has been found that “susu” proved to be effective for only
unorganised MSEs and not organised ones. The author ended the report with a
recommendation where it is said that other economic factors have to be considered in order to
prove it to be effective for both organised and unorganised MSEs.

4ANNOTATED BIBLIOGRAPHY
A bulk of references prove it to be a through researched paper and the detailed
description of the unknown terms will make the readers engaged to the paper. All of the
assumptions and methodology are presented accurately, however, the data samples are not
provided in the paper which will make the readers doubtful about the results.
Pitt, L. J. (2014). Working Capital Efficiency and Firm Profitability–Nigeria and
Kenya. World Academy of Science, Engineering and Technology, International
Journal of Social, Behavioral, Educational, Economic, Business and Industrial
Engineering, 8(6), 1670-1675.
This article is primarily focussed on the understanding of the relationship between the
efficiency of the working capital management, management decisions of working capital,
finance decisions of working capital and firm profitability on the context Kenya and Nigeria.
Quantitative data analysis has been done by the authors from a database of statements related
to finance of all of the firms of the respective countries. The ratios that has been used in the
study are Profitability, Accounts Receivable Days, Accounts Payable Days, Cash Conversion
Cycle, Current Ratio3, Working Capital Investment, Working Capital Finance and Company
size. Other measures used in the paper are Skewness and Kurtosis Statistics of Variables,
Tests for Normality and Spearman Rank Correlation Coefficient. The final part of the paper
comes with the conclusion that there is a convincing difference in the relationship of
profitability of the firm and working capital variables for the selected countries. This
significant difference in the parameters signifies that there will be various challenges that will
occur for the management dealing with working capital.
The paper is a researched one, signified by its reference list. All of the measures that
has been applied are presented accurately in tables which will make the readers attached to

5ANNOTATED BIBLIOGRAPHY
the project to its end. Discussing about its demerits, the paper lacks primary data and is
totally based on secondary data analysis.
Ganiyu, Y. O., Adelopo, I., Rodionova, Y., & Samuel, O. L. (2019). Capital structure and
firm performance in Nigeria. African Journal of Economic Review, 7(1), 31-56.
In this article the primary focus of the authors fall upon the effect of the structure of
the capital on the performance of the firm. The external attention is also put on the possible
monotonic relationship between the two parameters that is based entirely upon the capital
structure’s agency cost theory prediction in the case where the firms use debt financing.
Various early works has been stated some of which states of having no relationship between
the performance of the firm and capital structure, stakeholders and debt holders conflict and
various others where the impact of the capital structure on firm performance has been stated.
The data that has been considered for the research is the data available in the stock exchange
of Nigeria where data of 115 companies for the period of 1998 to 2015 has been accounted.
Calculating the variables and statistical measures the authors concluded where they stated
that due to excessive use of debt financing, a non-monotonic relationship gets established
between the considered parameters.
A bulk of references authenticates the report about its assumption, calculation and
results. Tabular chart representing the calculations makes it easier for the readers to
understand the calculations that the authors had performed for the paper. Though there are
more statistics that could be represented in tabular format for much better understanding.
Consideration of secondary data is where the report gains a demerit.
Oko, A. E., & Ndubuisi, W. (2015). Entrepreneurial Development Deficiencies in
Developing Economies-Nigeria in Focus. International Journal of Academic
Research in Business and Social Sciences, 5(6), 349-364.

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This article deals with the lack of entrepreneurial relationship with other existing
institutions and how the financing of the projects impacts the considered situation. The
completion of the research article is being done based on a set of questionnaires, interviews
and the generated observations from the data set that are analysed using ‘z’ statistics. With
the concept of entrepreneurship and the calculation of certain statistical measure this research
report comes to the conclusion where the growth of the entrepreneurship behaviours and
financing such institutions will develop such situations.
For such behavioural analysis the references taken by the author could be more in
number and the article will be authenticated at its best. The analysis over the primary data is
something that can be considered as the biggest strength of the paper. The presentation of the
calculation is also done in a better manner.
Boadi, I., Dana, L. P., Mertens, G., & Mensah, L. (2017). SMEs’ financing and banks’
profitability: a “good date” for banks in Ghana?. Journal of African Business, 18(2),
257-277.
This paper primarily focusses into the relationship between the financing of the SME
by the banks and the profitability of the banks in Ghana. The data has been analysed by the
regression tool known as fixed effect model. The data that has been collected for the study is
the financial statement of the banks of Ghana for a period of 18 years that is from 1997 to
2014. The variables of the study along with the summary statistics is being presented by the
authors in a tabular format. The article ends with the conclusion stating that both the
financing of the SMEs with loans and profitability of the bank is inter-related to each other
and in a positive manner. Besides the growth in GDP enhances the growth in profit of the
bank.

7ANNOTATED BIBLIOGRAPHY
The paper proves itself to be an authenticated and thoroughly researched for its
volume of reference in the list. The data that has been considered is secondary in nature but
the data that has been collected over a long period of time hence the accountability is
justified. Besides firm calculations are shown with great accuracy which will make the
readers remain engaged to the paper.
Abor, J., & Biekpe, N. (2006). How are SMEs financed? Evidence from the Ghanaian
nontraditional export sector. Environment and Planning C: Government and Policy,
24(1), 71-81.
This article primarily focusses into the exporters’ choice of type of finance that is
non-traditional in nature and chosen by the SMEs in Ghana. The data that has been
considered for the completion of the project is the collection of a sample of 150 firms of
Ghana from the Ghana Export Promotion Council and the statistical analysis is done using
correlation analysis and Ordinary Least Square (OLS) method. The paper consists of
calculations for the analysis of the data and all are represented accordingly. A brief literature
review has been provided as a support for the research. The conclusion of this paper states
that the calculations revealed a negative relationship between the age and formal finance and
also the relationship of the growth of the firm and the type of finance selected by the
organisations.
This paper is brief, precise and supported with good amount of calculations and thus
makes the reader understand the assumptions behind this research. In addition to it, better
understanding for the readers will help the readers to critically analyse the quality of the
paper. Secondary and quantitative analysis of data with statistical measures makes the paper a
calculative one thus validating the results authors reached to. In total this paper has negligible
demerits as compared to the merits it possesses.

8ANNOTATED BIBLIOGRAPHY
Shamsudeen, K., Keat, O., & Hassan, H. (2016). Access to Finance as Potential Moderator on
the Relationship between Entrepreneurial Self-Efficacy and SMEs Performance in
Nigeria: A Proposed Framework. IOSR Journal of Business and Management (IOSR-
JBM), 18(3), 131-136.
The authors of this article put their prime focus on the presentation of a framework of
theoretical nature, over the effect of moderate kind of the finance access on the relationship
among self-efficacy related to entrepreneur and performance of SMEs in Nigeria. The later
part of the paper is followed by literature review that comprises of three parts such as
performance of SME, self-efficacy and performance related to entrepreneur and access to
finance as potential moderator. The paper concluded with the concept of need of moderating
role of access to finance on the relationship between self-efficacy related entrepreneurship
and SME performance.
The article having a few out-dated references as compared to that of the article hence
the accuracy of the data collected for4 the article can be doubted on the perspective of its
accuracy. As this paper is a kind of research proposal hence no such hard facts can be
established from the discussion of the paper. The literature review of the paper is the precise
part of the paper where the past works on the topic has been discussed.
Ollor, W. G., & Dagogo, D. W. (2009). The effect of venture capital financing on the
economic value added profile of Nigerian SMEs. African Journal of Accounting,
Economics, Finance and Banking Research, 5(5).
The prime focus of this article is over the financing of the SME in Nigeria through
venture capital financing. The above mentioned subject is being discussed by comparing the
Economic Value Added for the SMEs which have venture capital backing to that of the
SMEs that do not have the backing of the venture capital. A quantitative analysis of data has

9ANNOTATED BIBLIOGRAPHY
been conducted over a sample of 120 SMEs out of which 60 are VC backed and 60 are non-
backed by venture capital. Paired t-tests and Multiple Regression Analysis has been used to
analyse the collected sample of data. The whole discussion is being concluded by the authors
by stating that VC (venture capital) backed SMEs performed much better than the non VC-
backed SMEs. The performance of the VC-backed SMEs are also enhanced due to the
management supported by the venture capitalists.
This article does have a firm standpoint as they have taken a fair size of sample to
conduct their survey on. Quantitative data analysis supports the calculation the authors have
done for the paper. Though the number of references for the paper is less as compared to the
study. The collection of primary data in place of the secondary one would have been better
for the research.
Akingunola, R. O. (2011). Small and medium scale enterprises and economic growth in
Nigeria: An assessment of financing options. Pakistan Journal of Business and
Economic Review, 2(1).
In this article, the primary intention of the authors is determination of various kinds of
financing option that is available for the SMEs in Nigeria and the contribution towards the
growth in economy through investment levels. The study has been conducted on a collection
of secondary data collected by the author from the Central Bank of Nigeria. Spearman’s Rho
correlation has been used for the analysis of the data. The conclusion given by the authors
based on their research is the finding of positive relationship between the SME financing and
the growth in economy through investment levels in Nigeria. It has also been recommended
by the author about providing the SMEs with fiancés at low interest rates.
Though the paper consists of the calculation parts along with the theoretical
presentation of the data and its analysis, the selection of secondary data restricts the paper to

10ANNOTATED BIBLIOGRAPHY
be validated towards worldwide readers. The paper has no references, which does not provide
any fixed source from where the authors researched. The conclusion is therefore may get
denied by readers or other authors who did work on similar subjects.
RASAK, B. (2012). Small and medium scale enterprises (smes): a panacea for economic
growth in Nigeria. Journal of Management and Corporate Governance, 4(6), 86-98.
This paper aims to study the financing of SME in Amuwo Odofin Local Government
Area in Lagos state in Nigeria and to analyse how government financed the SMEs in the
selected area. Both qualitative and quantitative method is used for the analysis of the data
collected by the authors and the total analysis has been guided by network theory. Both
secondary and primary data collection through questionnaires in a face-to-face interview has
been done in the two stages of data collection respectively. The conclusion of the paper stated
that the government has not done enough for the financing of the SMEs. More interest from
the side of the government has to be done in order to improve the situation of the SMEs in
Nigeria.
This paper does includes all the necessary stages for complete understanding of the
project, a monotone has been generated throughout the paper as more textual and less factual
or data related informations are present in the paper. This may make the readers less
accustomed to the paper. Less reference could be a demerit of it, though for the research both
kinds of data that is primary and secondary has been collected.
Ekpenyong, D. B., & Nyong, M. O. (1992). Small and medium-scale enterprises in Nigeria:
their characteristics, problems and sources of finance.
One of the objectives of this paper is to find the types of sources of finance for the
SMEs in Nigeria and to analyse the interrelationship between the bases of the capital,

11ANNOTATED BIBLIOGRAPHY
employee number, sources of finances and the business types. The data for the research has
been collected using surveys over a sample size of 150 SMEs. The conclusion that the
authors reached is the financing of the SMEs are done by the personal savings of the owners
or the operators of the firms itself and few from the formal financial institutions. The
additional financing is done by the informal institutions, which is maximum in number.
The paper is well written and descriptive in nature. The entire paper covers all of the
parameters that have been taken under consideration in detailed manner. References,
additional notes are some of the instances in the paper which makes the paper more
significant than the existing ones. A detailed survey report and the process of execution has
been provided in the paper. Simple statistical measures are used for the data analysis and all
of the calculations are kept simple.
Ebiringa, O. T. (2011). Syenthesis of Literature on Small & Medium Entreprise (SME) Start-
Up Financing. International Journal of Economic Research, 2(1), 85-95.
This paper aims to focus on the start-up financing of the SMEs in Nigeria. The
primary focus is on the identification of the determinants that are critical for the capital
structure of the start-up SMEs. As this is a paper based on literature reviews hence the entire
data that has been collected for the paper is secondary in nature and qualitative data analysis
has been done for the findings in the end. A firm, descriptive and detailed literature review
presents all the facts about the past works that had been done on similar projects. After the
analysis the author reached to the conclusion that outsider financers are not being favoured by
the SME operators, rather they prefer self-control over the financing of the firms at the initial
stage. It is also being analysed that SMEs with higher leverage produces more profit and as a
consequence, growth in their earnings is also noticed.