Corporate Governance and Debt Financing of Listed Manufacturing Firms in Nigeria

Abstract

The study assessed the relationship between corporate governance and capital structure of listed manufacturing firms in Nigeria. The study employed secondary data covering a period of 10 years (2012 – 2021) with sample of 28 listed manufacturing firms. The study obtained annual reports of listed firms from their respective websites and Nigerian Stock Exchange (NSE) Factbook. The data were analysed using pool ordinary least squared and fixed effect model estimation. The findings revealed a significant relationship between the corporate governance and debt financing of the listed manufacturing firms in Nigeria. Specifically, results show that corporate governance variables such as the board size ((t = 2.120 p < 0.05), the board composition (t= 9.288, p < 0.05) and CEO duality (t =2.306, p< 0.005) had positive and significant effect on use of debt funding of listed manufacturing firms in Nigeria. The study concluded that the practice of corporate governance contributes and play significant role in finance decision and enhanced financial performance in Nigeria. Therefore, policy maker should ensure a combination of some mandatory minimum rules and flexibility above the minimum level that will ensure effective financing decision by manufacturing firms in Nigeria.