Strategising Financial Structure/Architecture on Firm Performance in Nigeria
Journal: International Journal of Scientific Engineering and Science (Vol.6, No. 11)Publication Date: 2022-11-15
Authors : Ugwu Ikechukwu Virginus; Okoye Nwamaka Jane Frances; Ikueze Evelyn N.; Eboatu Ikenna; Edwin Chukwu Okoro Ph.D;
Page : 10-19
Keywords : ;
Abstract
Our study is anchored on strategising financial architecture on firm financial performance in Nigeria using listed service industries from Nigeria. We strategised the independent variable with: short term debts STD; long term debts LTD and Equity EQT; while dependent variable apply return on investment ROI. The annual reports of sampled (9) service firms from 2012 to 2020 were extracted and analyzed using descriptive statistics, Pearson correlation and Ordinary lest square regression (OLS). Results show R-squared value as (48.5%): indicating that the independent variables explained about 48.5% of the systematic variation in the pooled firms; while 51.5% is explained by other factors, the unspecified variables captured by the error term. In the same vein, the R-squared adjusted value is (46%) of the predictive power in the dependent variable; was jointly explained by the independent variables of the study: STD, LTD and EQT. Other analyses evidences show that strategizing STD and LTD are both negative and significant on ROI; while EQT is positive and significant on return on investment ROI of the pooled firms in Nigeria. Matching our findings with financial structure theories: EQT being positive and significant agrees with Miller & Modigliani, (1954; 1963) and Signaling, (1977) theories who earlier supported positive relationship; while STD and LTD being negative and significant, agrees with Agency (1976); Trade-off and Pecking order (1984), whose earlier theories supported negative relationship with ROI. From our findings, we recommend that firms should reduce STD, LTD and keep increasing equity to enhance ROI. The study contributes with the rich empirical literature, the modernized model applied in the study.
Other Latest Articles
- Spatial and Temporal Rainfall Trend Analysis: at Abrehamo woreda in Assosa Zone, Benishangul Gumez Region, Ethiopia
- The Influence of Brand Awareness, Trust, and Digital Marketing on Operational Decisions on Laser Vision Correction (LVC) SMILE (Small Incision Lenticule Extraction) Method
- Assessment of Procurement Methods for Road Construction Projects in Akwa Ibom State of Nigeria
- Palynological and Paleoclimatic Study of Late Miocene Epoch Sediments of Well-‘W’, Offshore Niger Delta, Nigeria
- Harmonic Effects of an OWPP Connection to Northwestern Part of Turkey-A Case Study
Last modified: 2022-12-17 19:46:22