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Capital Structure and Financial Performance in Nigeria

Julius B. Adesina (), Barine M. Nwidobie and Oluwatosin O. Adesina
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Julius B. Adesina: Caleb University, Imota, Lagos Nigeria, Corresponding Author;
Barine M. Nwidobie: Caleb University, Imota, Lagos, Nigeria.
Oluwatosin O. Adesina: Obafemi Awolowo University, Ile Ife, Nigeria.

International Journal of Business and Social Research, 2015, vol. 5, issue 2, 21-31

Abstract: Capital structure has been found to have impact on firm performance. Bank consolidation in Nigeria has increased bank equity capital against debt. This study aims to determine the impact of post-consolidation capital structure on the financial performance of Nigeria quoted banks. The study used profit before tax as a dependent variable and two capital structure variables (equity and debt) as independent variables. The sample for the study consists of ten (10) Nigerian banks quoted on the Nigerian Stock exchange (NSE) and period of eight (8) years from 2005 to 2012. The required data and information for the study were gathered from published annual reports. Ordinary least square regression analysis of secondary data shows that capital structure has a significant positive relationship with the financial performance of Nigeria quoted banks. This suggests that the management of quoted banks in Nigeria consistently use debt and equity capital in financing to improve earnings.

Keywords: Capital structure; debt and equity; financial performance. (search for similar items in EconPapers)
JEL-codes: G3 M2 (search for similar items in EconPapers)
Date: 2015
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