Title: When does board share ownership matter? Evidence from across firm life cycle in Sub-Saharan Africa

Authors: Ebenezer Agyemang Badu

Addresses: Department of Agricultural Economics and Extension Education, Akenten Appiah-Menka University of Skills Training and Entrepreneurial Development, Asante – Mampong, Ghana

Abstract: The purpose of this paper is to investigate the relationship between board share ownership and firm value, as well as to determine when in the firm's life cycle board share ownership is value relevant in Sub-Saharan Africa (SSA). The paper uses dividend pay-out and the ratio of retained earnings to total assets to distinguish between mature and immature firms and to estimate board share ownership and firm value for each set of firms, using system-generalised methods of moments. The findings suggest that board share ownership is value-relevant for non-financial firms in SSA. The paper further finds that board share ownership matters for immature firms, not mature firms. The findings imply that differences in requirements for financing and investment result in differences in board share ownership and firm value between mature and immature firms. The findings suggest that board share ownership is not valued at all stages of a firm's life cycle.

Keywords: board ownership; value relevance; mature firms; immature firms; firm's life cycle; Sub-Saharan Africa; SSA; share value; generalised method of moment; non-financial firms.

DOI: 10.1504/AAJFA.2025.143503

Afro-Asian Journal of Finance and Accounting, 2025 Vol.15 No.1, pp.98 - 116

Received: 29 Apr 2022
Received in revised form: 21 Jan 2023
Accepted: 27 Jan 2023
Published online: 30 Dec 2024 *

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