CAPITAL STRUCTURE INSTABILITY: An Empirical Investigation Among Non-Financial Quoted Firms in Nigeria
- Oluseun A. Paseda
- Olusegun Felix Ayadi
- ( paper pages. 72-128 )
This study employs
the traditional leverage adjustment and the classic (S,s) frameworks to
describe the target adjustment behaviour of Nigerian firms in the presence of
financing frictions. The results reveal that capital structure variation
overwhelms stability. The leverage dimensions exhibit strong sensitivities to
firm-level variables, confirming trade-off, pecking order and market timing predictions.
The target leverage and lower refinancing thresholds are pro-cyclical while the
upper limit is counter-cyclical. The refinancing spread is driven directly by
market timing and firm age and inversely by dividend payout and marginal tax
rate. The study implications can be generalized to markets with similar characteristics.
Oluseun A. Paseda, Olusegun Felix Ayadi.
"CAPITAL STRUCTURE INSTABILITY: An Empirical Investigation Among Non-Financial Quoted Firms in Nigeria"
The Nigerian Journal of Economic and Social Studies,
65 (1): 72-128.
G30, G32, G33, G35