IDEAS home Printed from https://ideas.repec.org/a/bcp/journl/v6y2022i12p188-195.html
   My bibliography  Save this article

Firm Size, Financial Leverage and Firm Performance: Evidence from Firms Listed in the Non-Financial Sectors of the Nigeria Stock Exchange

Author

Listed:
  • James Sunday Kehinde

    (Department of Accounting, Lagos State University, Ojo, Lagos State, Nigeria)

  • Sehilat Abike Bolarinwa

    (Department of Accounting, Lagos State University, Ojo, Lagos State, Nigeria)

  • Olukayode Ezekiel Ibironke

    (Department of Accounting, Lagos State University, Ojo, Lagos State, Nigeria)

Abstract

This study examined the moderating effects of firm size on the financial leverage – performance relationship of non-financial firms in Nigeria. The study used the ex-post facto research design and secondary data was adopted from annual reports of 50 non-financial firms listed on the Nigeria Stock Exchange as at 31 December 2019. The data used was for the period of 2010 – 2019 and multiple regression tool was used to analysed the data collected. The findings of this study shows that debt ratio (β= -0.459; p

Suggested Citation

  • James Sunday Kehinde & Sehilat Abike Bolarinwa & Olukayode Ezekiel Ibironke, 2022. "Firm Size, Financial Leverage and Firm Performance: Evidence from Firms Listed in the Non-Financial Sectors of the Nigeria Stock Exchange," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 6(12), pages 188-195, December.
  • Handle: RePEc:bcp:journl:v:6:y:2022:i:12:p:188-195
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijriss/Digital-Library/volume-6-issue-12/188-195.pdf
    Download Restriction: no

    File URL: https://www.rsisinternational.org/virtual-library/papers/firm-size-financial-leverage-and-firm-performance-evidence-from-firms-listed-in-the-non-financial-sectors-of-the-nigeria-stock-exchange/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jermias, Johnny, 2008. "The relative influence of competitive intensity and business strategy on the relationship between financial leverage and performance," The British Accounting Review, Elsevier, vol. 40(1), pages 71-86.
    2. Moses Ochieng Gweyi & John Karanja, 2014. "Effect of Financial Leverage on Financial Performance of Deposit Taking Savings and Credit Co-operative in Kenya," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 4(2), pages 176-184, April.
    3. Ibhagui, Oyakhilome W. & Olokoyo, Felicia O., 2018. "Leverage and firm performance: New evidence on the role of firm size," The North American Journal of Economics and Finance, Elsevier, vol. 45(C), pages 57-82.
    4. G Tomas M Hult & David J Ketchen & David A Griffith & Brian R Chabowski & Mary K Hamman & Bernadine Johnson Dykes & Wesley A Pollitte & S Tamer Cavusgil, 2008. "An assessment of the measurement of performance in international business research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 39(6), pages 1064-1080, September.
    5. F. Voulgaris & D. Asteriou & G. Agiomirgianakis, 2004. "Size and Determinants of Capital Structure in the Greek Manufacturing Sector," International Review of Applied Economics, Taylor & Francis Journals, vol. 18(2), pages 247-262.
    6. Kraus, Alan & Litzenberger, Robert H, 1973. "A State-Preference Model of Optimal Financial Leverage," Journal of Finance, American Finance Association, vol. 28(4), pages 911-922, September.
    7. Abel Ebel Ezeoha, 2008. "Firm size and corporate financial-leverage choice in a developing economy: Evidence from Nigeria," Journal of Risk Finance, Emerald Group Publishing, vol. 9(4), pages 351-364, August.
    8. Abel Ebel Ezeoha, 2008. "Firm size and corporate financial‐leverage choice in a developing economy," Journal of Risk Finance, Emerald Group Publishing Limited, vol. 9(4), pages 351-364, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Khémiri, Wafa & Noubbigh, Hédi, 2020. "Size-threshold effect in debt-firm performance nexus in the sub-Saharan region: A Panel Smooth Transition Regression approach," The Quarterly Review of Economics and Finance, Elsevier, vol. 76(C), pages 335-344.
    2. Rana El Bahsh & Ali Alattar & Aziz N. Yusuf, 2018. "Firm, Industry and Country Level Determinants of Capital Structure: Evidence from Jordan," International Journal of Economics and Financial Issues, Econjournals, vol. 8(2), pages 175-190.
    3. Joaquim J.S. Ramalho & Jacinto Vidigal da Silva, 2009. "A two-part fractional regression model for the financial leverage decisions of micro, small, medium and large firms," Quantitative Finance, Taylor & Francis Journals, vol. 9(5), pages 621-636.
    4. Sunday Nosa UGBOGBO (Ph.D) & Sunday Nosa UGBOGBO (Ph.D), 2023. "Capital Structure and Corporate Financial Distress of Quoted Non-Financial Firms in Nigeria," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(6), pages 1302-1314, June.
    5. Georgeta Vintilă & Ştefan Cristian Gherghina & Diana Alexandra Toader, 2019. "Exploring the Determinants of Financial Structure in the Technology Industry: Panel Data Evidence from the New York Stock Exchange Listed Companies," JRFM, MDPI, vol. 12(4), pages 1-16, October.
    6. Mari Avarmaa & Aaro Hazak & Kadri Männasoo, 2011. "Capital structure formation in multinational and local companies in the Baltic States," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 11(1), pages 125-146, July.
    7. Satish Kumar & Riya Sureka & Sisira Colombage, 2020. "Capital structure of SMEs: a systematic literature review and bibliometric analysis," Management Review Quarterly, Springer, vol. 70(4), pages 535-565, November.
    8. Hariem Abdullah & Turgut Tursoy, 2021. "Capital structure and firm performance: evidence of Germany under IFRS adoption," Review of Managerial Science, Springer, vol. 15(2), pages 379-398, February.
    9. Marco Botta & Luca Colombo, 2016. "Macroeconomic and Institutional Determinants of Capital Structure Decisions," DISCE - Working Papers del Dipartimento di Economia e Finanza def038, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    10. Kim, Sang-Joon & Bae, John & Oh, Hannah, 2019. "Financing strategically: The moderation effect of marketing activities on the bifurcated relationship between debt level and firm valuation of small and medium enterprises," The North American Journal of Economics and Finance, Elsevier, vol. 48(C), pages 663-681.
    11. Merugu Venugopal & Bhanu Prakash Sharma G. & Ravindar Reddy M., 2018. "Impact of Capital Structure on Shareholder Value in Indian Pharmaceutical Industry: An Empirical Approach Through Created Shareholder Value," Global Business Review, International Management Institute, vol. 19(5), pages 1290-1302, October.
    12. Bülent Köksal & Cüneyt Orman, 2015. "Determinants of capital structure: evidence from a major developing economy," Small Business Economics, Springer, vol. 44(2), pages 255-282, February.
    13. Bae, John & Kim, Sang-Joon & Oh, Hannah, 2017. "Taming polysemous signals: The role of marketing intensity on the relationship between financial leverage and firm performance," Review of Financial Economics, Elsevier, vol. 33(C), pages 29-40.
    14. Anoshkina, Ekaterina S. (Аношкина, Екатерина) & Markovskaya, Elizaveta I. (Марковская, Елизавета), 2018. "Empirical Analysis of Capital Structure Determinants of Russian Oil and Gas Companies [Анализ Структуры Капитала Российских Компаний Нефтегазового Сектора]," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 5, pages 80-109, October.
    15. William Gornall & Ilya A. Strebulaev, 2013. "Financing as a Supply Chain: The Capital Structure of Banks and Borrowers," NBER Working Papers 19633, National Bureau of Economic Research, Inc.
    16. Surenderrao Komera & P. J. Jijo Lukose, 2016. "Heterogeneity and Asymmetry in Speed of Leverage Adjustment: The Indian Experience," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 19(03), pages 1-26, September.
    17. Christoph Börner & Dietmar Grichnik & Frank Reize, 2010. "Finanzierungsentscheidungen mittelständischer Unternehmer — Einflussfaktoren der Fremdfinanzierung deutscher KMU," Schmalenbach Journal of Business Research, Springer, vol. 62(2), pages 227-275, March.
    18. Hung, Dang Ngoc, 2022. "Impact of Debt Structure, State Ownership on Business Performance in Energy Enterprises: A Case Study in Vietnam," OSF Preprints nhp8v, Center for Open Science.
    19. Alam, Ashraful & Uddin, Moshfique & Yazdifar, Hassan & Shafique, Sujana & Lartey, Theophilus, 2020. "R&D investment, firm performance and moderating role of system and safeguard: Evidence from emerging markets," Journal of Business Research, Elsevier, vol. 106(C), pages 94-105.
    20. Kroes, James R. & Manikas, Andrew S. & Gattiker, Thomas F., 2018. "Operational leanness and retail firm performance since 1980," International Journal of Production Economics, Elsevier, vol. 197(C), pages 262-274.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcp:journl:v:6:y:2022:i:12:p:188-195. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Pawan Verma (email available below). General contact details of provider: https://rsisinternational.org/journals/ijriss/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.