University Links: Home Page | Site Map
Covenant University Repository

An Empirical Examination of the Relationship between Capital Structure and the Financial Performance of Firms in Nigeria

Uwuigbe, U. and Uadiale, O.M. (2012) An Empirical Examination of the Relationship between Capital Structure and the Financial Performance of Firms in Nigeria. E u r o E c o n o m i c a. pp. 57-65. ISSN 1582-8859

[img] PDF
Download (130Kb)

Abstract

This paper basically investigates the relationship between capital structure and the financial performance of listed firms in Nigeria. The study considered a total sample of 31 listed firms on the floor of the Nigerian stock exchange. The annual reports for the period 2005-2009 were analyzed using the Ordinary Least Squares (OLS) technique of model estimation to test the research propositions stated in this study. The study observed that two of the explanatory variables in this study (i.e. short-term debt and shareholders’ funds) have a significant positive impact on the financial performance of listed firms in Nigeria. In addition, the study observed that long-term debt has a significant negative impact on the financial performance of firms. To this end the study concludes that employing high proportion of long-term debt in firms’ capital structure will invariably result in a low financial performance of a firm.

Item Type: Article
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
Divisions: Faculty of Law, Arts and Social Sciences > School of Social Sciences
Depositing User: Mr Solomon Bayoko
Date Deposited: 04 Oct 2013 15:05
Last Modified: 04 Oct 2013 15:05
URI: http://eprints.covenantuniversity.edu.ng/id/eprint/1573

Actions (login required)

View Item View Item