Capital Structure and Corporate Performance of Listed Industrial Goods Companies in Nigeria. The Moderating Effect of Firm Size

Abstract

The purpose of the study was to look into how company size affected the relationship between listed industrial goods companies in Nigeria's financial performance and capital structure. The Pecking Order Theory served as the study's foundation, and both cross-sectional and longitudinal research designs were used. The population under investigation consists of all industrial goods companies that are listed on the Nigeria Exchange Group. In order to account for heterogeneity in the data analysis process, the Generalised Method of Moments (GMM) panel estimator was chosen. The study's findings demonstrated that while equity financing had a non-significantly negative impact on return on assets, debt financing had a positive and significant impact. The study concluded that corporate capital structure affects the financial performance of listed industrial goods firms in Nigeria and that firm size improves the association between capital structure and financial performance of listed industrial goods companies in Nigeria. The study recommended, among other things, that since debt financing has been demonstrated to improve financial performance, the industrial goods sector should employ more of it.

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