Empirical evidence on capital structure determinants in NIGERIA

Abstract

The purpose of this paper is to investigate empirical evidence on capital structure determinants in Nigeria. This research has been performed using a sample of 50 companies listed on the Nigeria Stock Exchange from 2001 to 2010. The relationship between the short-term and long-term debt and four explanatory variables were observed. The results of the cross-sectional OLS regression revealed that the static trade-off theory and agency cost theory are relevant to Nigerian companies whereas there was a little evidence in support of pecking order theory. The findings of this study confirm that profitability, growth, firm size and tangibility are explanatory variables of capital structure.