Capital Structure and Financial Performance of Quoted Insurance Companies in Nigeria

Olaleye, J O(phd) and GenevieveKhadijat Ayobami Adeagbo
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Olaleye, J O(phd): Department of Management and Accounting, Faculty of Management and Social Sciences, Lead City University, Ibadan, Nigeria
GenevieveKhadijat Ayobami Adeagbo: Department of Management and Accounting, Faculty of Management and Social Sciences, Lead City University, Ibadan, Nigeria

International Journal of Research and Innovation in Social Science, 2023, vol. 7, issue 1, 939-949

Abstract: The epileptic state of performance of companies in Nigeria has become a great concern. Due to this, different scholars have tried to find a way out by discovering what actually influences performance. Therefore, this study tends to add to the body of knowledge by examining the impact of capital structure on the performance of quoted insurance companies in Nigeria because of the importance of such firms in modern economy. Secondary source of data collection was employed and the data were gathered from annual reports of the (23) quoted insurance companies in Nigeria for the periods of eleven years from 2011 to 2021. Data were analysed through the use of descriptive and inferential statistics. The study model expressed the effect of total debt-ratio, leverage, growth, liquidity ratio, assets tangibility and business risk on return on asset using OLS Panel Regression. The results based on the fixed effect model showed that all the explanatory variables except tangibility and growth have a positive influence on profitability. Based on the above findings, the study concluded that for most of the companies operating as risks mitigating mechanisms in Nigeria, the influence of optimal capital mix on their performance is positive and significant.

Date: 2023
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