Abstract:
Growth in the manufacturing sector of Ghana has been sluggish due to the
recent hikes in input prices. However, manufacturing firms‘ growth, mainly,
depends on their ability to maximize and sustain profit. Hence, many of these
manufacturing firms may attempt to achieve this objective through the
management of their cost structure and the adaptation of better pricing
methods. Therefore, this study determined the effect of cost control on the
growth of manufacturing firms in Ghana being moderated by pricing strategy.
In achieving this, Levene‘s test and two-step system dynamic General Method
of Moments (GMM) model were used to analyse the panel data for a period of
10 years from 2012 to 2021. The study revealed no statistically significant
difference in the level of cost control of listed manufacturing firms in Ghana.
Additionally, the findings from the regression analysis indicated that cost
control dimensions have statistically significant relationship with firm growth.
Even though the competitive-based pricing strategy and customer-value based
pricing strategy were weak in influencing cost control dimensions to affect
firm growth, cost-based pricing strategy had statistically strong interaction
effect on cost control (dimensions) and firm growth. The study concluded that
pricing strategy significantly moderate cost control and firm growth (proxied
as changes in total sales) and not return on equity as a proxy for firm growth.
It was therefore recommended that management of manufacturing firms‘
policies should be channelled to controlling cost and eliminating wastage in all
dimensions. The study also recommended that manufacturing firms‘
management must focus on cost-based pricing strategy to enable cost control
to highly influence firm growth in the Ghanaian manufacturing industry.
