Effect of Firm Characteristics on Capital Structure of Listed Cement Firms in Nigeria
Abstract:The study investigated the effect of firm characteristics on the capital structures of listed cement firms on the Nigerian stock exchange within the period of 2015-2020. The predictor variables are non-debt tax shield, business risk, profitability, and liquidity, while the explained variable was measured using leverage. The study used the census approach for the population, while random effect panel regression was used to estimate the connection linking firm characteristics and capital structure. A secondary source of data was used, which was extracted from the annual report of three (3) listed cement firms in Nigeria. Panel regression (fixed effect and random effect) and correlation were used in analyzing the data. Based on findings, the study concluded that specific identified firm characteristics such as non-debt tax shield, liquidity, profitability, and business risk influence the capital structure of selected listed cement firms in Nigeria. The study, therefore, recommends that the management of cement firms should ensure, taking into deliberation, non-debt tax shields, and liquidity when making decisions pertaining to capital structure, to enable cement firms to have a more perfect capital structure.
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