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Capital Structure and Firm Performance in Nigerian-Listed Companies

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  • Matthew Adeolu Abata
  • Stephen Oseko Migiro

Abstract

a number of business failures have not been reported in Nigeria arising from inability to payback nor does service debts .This paper empirically investigate the relationship between capital structure and firm performance in the Nigerian listed firms. A sample of 30listed firms out of a population of 173 were examined from 2005 to 2014 using multiple regression tools. Two hypotheses were formulated and tested using descriptive statistics and an econometric panel data technique to analyze the gathered data. An insignificantly negative correlation was found between financial leverage and ROA on one hand and a significantly negative relationship between debt/equity mix and ROE on the other hand. It is therefore recommended that firms should use long term liabilities to finance firm’s activities and mix debt/equity appropriately by ensuring that debt financing ratio is lower to enhance corporate performance and survival.

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  • Matthew Adeolu Abata & Stephen Oseko Migiro, 2016. "Capital Structure and Firm Performance in Nigerian-Listed Companies," Journal of Economics and Behavioral Studies, AMH International, vol. 8(3), pages 54-74.
    • Handle: RePEc:rnd:arjebs:v:8:y:2016:i:3:p:54-74
    DOI: 10.22610/jebs.v8i3(J).1289
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    Cited by:

    1. Ibrahim Abidemi Odusanya & Olumuyiwa Ganiyu Yinusa & Bamidele M. Ilo, 2018. "Determinants of Firm Profitability in Nigeria: Evidence from Dynamic Panel Models," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 68(1), pages 43-58, January-M.
    2. Imad Nassim & Bouchra Benraïss, 2024. "Capital Structure and Financial Performance of Moroccan Agricultural Small- and Medium-Sized Enterprises: Moderating Effects of Government Subsidies," JRFM, MDPI, vol. 17(7), pages 1-22, June.
    3. Samal Kokeyeva & Petr Hajek & Ainagul Adambekova, 2022. "Small Firms’ Capital Structure and Performance," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 128-144.
    4. 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.
    5. Pavitra Dhamija, 2020. "Economic Development and South Africa: 25 Years Analysis (1994 to 2019)," South African Journal of Economics, Economic Society of South Africa, vol. 88(3), pages 298-322, September.
    6. Matthew Adeolu Abata & Stephen Oseko Migiro & Joseph Olorunfemi Akande & Raredzo Layton, 2017. "Does Capital Structure Impact on the Performance of South African Listed Firms?," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 13(6), pages 334-350, DECEMBER.

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