DETERMINANTS OF CAPITAL STRUCTURE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA
1 Department of Accounting Kaduna State University, Kaduna
2 Department of Accounting, Ahmadu Bello University, Zaria- Nigeria
3 Department of Accounting, Kaduna State University (KASU)-Nigeria
* Corresponding author: nasabuwa@gmail.com
2 Department of Accounting, Ahmadu Bello University, Zaria- Nigeria
3 Department of Accounting, Kaduna State University (KASU)-Nigeria
* Corresponding author: nasabuwa@gmail.com
Abstract
ract
Capital structure can be said to a pivot upon which all banking activity
revolve, and if well determine will support the bank in it operation by
providing a buffer to absorb unanticipated loses from it activity. The
paper investigated the determinant of capital structure in Nigeria
deposit money banks from 2004 to 2013. The population of the study
comprises seventeen (17) DMBs listed on the Nigerian Stock Exchange
(NSE) as at December, 2013. Out of which ten (10) banks constitute the
sample size of the study. The study adopted both correlation and ex-post
facto research design. The data for the study was purely from secondary
source obtained from the annual reports of the sampled banks. Data was
analyzed using several options of multiple panel data regression. But the
most reliable of all is robust ordinary lease square regression as
suggested by‘Breusch and Pagan Lagrangian Multiplier Test for
Random Effect' The results revealed that firm size, firm growth, age,
tangibility, interest rate and return on investment have significant
impact on leverage, the result approve the prediction of trade –off
theory in case of firm size ,firm growth and interest rate, while
tangibility and return on investment support pecking order theory, The
study recommends that major players such as bank managers, financial
analysts, policy makers And all stake holders in the banking sector
should use the five variables of capital structure determinant as
yardstick in determining their capital structure enable the banks operate
at optimal level.
Capital structure can be said to a pivot upon which all banking activity
revolve, and if well determine will support the bank in it operation by
providing a buffer to absorb unanticipated loses from it activity. The
paper investigated the determinant of capital structure in Nigeria
deposit money banks from 2004 to 2013. The population of the study
comprises seventeen (17) DMBs listed on the Nigerian Stock Exchange
(NSE) as at December, 2013. Out of which ten (10) banks constitute the
sample size of the study. The study adopted both correlation and ex-post
facto research design. The data for the study was purely from secondary
source obtained from the annual reports of the sampled banks. Data was
analyzed using several options of multiple panel data regression. But the
most reliable of all is robust ordinary lease square regression as
suggested by‘Breusch and Pagan Lagrangian Multiplier Test for
Random Effect' The results revealed that firm size, firm growth, age,
tangibility, interest rate and return on investment have significant
impact on leverage, the result approve the prediction of trade –off
theory in case of firm size ,firm growth and interest rate, while
tangibility and return on investment support pecking order theory, The
study recommends that major players such as bank managers, financial
analysts, policy makers And all stake holders in the banking sector
should use the five variables of capital structure determinant as
yardstick in determining their capital structure enable the banks operate
at optimal level.
Keywords
Capital structure
Leverage
Deposit Money Banks
How to Cite
Shuaibu, H., Audi, A. M., & Hassan, S. U. (2014). DETERMINANTS OF CAPITAL STRUCTURE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA. Nigerian Journal of Accounting Research, 10(1), 136-157.
H. Shuaibu, A. M. Audi, and S. U. Hassan, "DETERMINANTS OF CAPITAL STRUCTURE OF LISTED DEPOSIT MONEY BANKS IN NIGERIA," Nigerian Journal of Accounting Research, vol. 10, no. 1, pp. 136-157, June 2014.
