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Impact of Capital Structure on Performance of Commercial Banks in Nigeria

Author

Listed:
  • E. Chuke Nwude

    (Department of Banking and Finance, Faculty of Business Administration, University of Nigeria, Nsukka, Enugu Campus. Nigeria)

  • Kenneth Chikezie Anyalechi

    (Department of Banking and Finance, Faculty of Business Administration, University of Nigeria, Nsukka, Enugu Campus, Enugu State, Nigeria.)

Abstract

The study evaluated the influence of financing mix on the performance of commercial banks, and the causal link between debt-equity ratio. Data collated were analyzed using correlation analysis, pooled OLS regression analysis, fixed effect panel analysis, random effect panel analysis, granger causality analysis, as well as post estimation test such as restricted f-test of heterogeneity and Hausman test. The findings show that while debt finance exert negative and significant impact on return on asset, the debt-equity ratio has positive and significant influence on return on equity. There was neither unidirectional nor bidirectional relationship between capital structure and performance of commercial banks in Nigeria.

Suggested Citation

  • E. Chuke Nwude & Kenneth Chikezie Anyalechi, 2018. "Impact of Capital Structure on Performance of Commercial Banks in Nigeria," International Journal of Economics and Financial Issues, Econjournals, vol. 8(2), pages 298-303.
    • Handle: RePEc:eco:journ1:2018-02-35
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    References listed on IDEAS

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    Cited by:

    1. Ngatno & Apriatni, Endang P, 2020. "Moderation Effects of Organisational Environment on the Relationship between Capital Structure and Financial Performance of Central Java Rural Banks, Indonesia," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 10(1), pages 78-93, January.
    2. Maryam Isyaku Muhammad & Mohammed Abubakar & Mohammed Mahmud Kakanda & Muhammad Abdul Abubakar, 2020. "The dynamics of capital structure and firm value of listed industrial goods in Nigeria," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 10(7), pages 184-193, July.

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    More about this item

    Keywords

    capital structure; commercial banks; Nigeria;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G3 - Financial Economics - - Corporate Finance and Governance
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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