Abstract:
ABSTRACT
This study examined the influence of country level governance indicators on
the performance of the Ghana Stock Exchange (GSE) by controlling the effect
of inflation and trading volume. The study used an explanatory research
design and a quantitative research approach. Relying on Institutional Theory
(IT) and the Efficient Market Hypothesis (EMH), using Econometric Views
(E-views) and descriptive statistics (mean, standard deviation, skewness, and
kurtosis) as well as an ordinary least square regression. The primary findings
were that economic stability, state - level performance, legal system, and
corrupt practices control all had a significant impact on stock market returns.
The conclusion was that politically stable atmosphere and the freedom of the
media and citizens to have a say in governance and holding leaders’
accountable yields positive results on stock market returns. The propensity of
the government of Ghana to control corruption and ensure sound
implementation of rules of governance feeds positively into the performance
of the stock market of Ghana. It is therefore recommended based on the
findings of the study that; the government of Ghana should intensify the fight
against corruption in all aspect of society by strengthening rules that give
autonomy to anti-corruption bodies to appropriately discharge their functions
without fear, favour or political interference as the study recommends.
