Empirical evidence on capital structure determinants in NIGERIA

The purpose of this paper is to investigate empirical evidence on capital structure determinants in Nigeria. This research has been performed using a sample of 50 companies listed on the Nigeria Stock Exchange from 2001 to 2010. The relationship between the short-term and long-term debt and four explanatory variables were observed. The results of the cross-sectional OLS regression revealed that the static trade-off theory and agency cost theory are relevant to Nigerian companies whereas there was a little evidence in support of pecking order theory. The findings of this study confirm that profitability, growth, firm size and tangibility are explanatory variables of capital structure. Key words: Capital structure, static trade-off theory, pecking order theory, agency cost theory.