Capital Structure and Performance of Firms in Nigeria: A way out of Economic Recession

Publication Date: 19/05/2020

Author(s): Olaniyan Samson Olajide (Ph.D), Lawal S. Adewale.

Volume/Issue: Volume 3 , Issue 2 (2020)


The study examined the relationship between capital structure and the performance of firms in Nigeria. Using returns on assets (ROA), returns on equity (ROE) and Tobin Q as measurements for firm performance, debt ratio was used as a proxy for capital structure. The data were collected from quoted firms on Nigerian Stock Exchange from 1988 to 2017. The panel data analysis revealed a positive significant relationship between capital structure and performance of firms in Nigeria. The study concluded that strengthen capital structure will improve the performance of real sectors in Nigeria, and this will improve the nation’s economic growth and development, and provide a way out of economic recession.

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