Impact of large bulk shareholders on debt financing of listed non-financial firms in Nigeria

Abstract

The impact of large bulk shareholders on debt financing is far from been conclusive both from developing and developed countries. While some authors reported a negative impact others reported a positive impact, yet others have documented a nonlinear relationship. Most of the studies conducted in the context of Nigeria have largely ignored the role of large shareholders in modelling debt financing. This study adopted a system GMM to examine the role of large shareholders on debt financing of listed non-financial firms in Nigeria. This study established that large bulk shareholders did not have any significant impact on short term debt, while a positive and significant impact was recorded for the long term debt. Hence, it is the submission of this paper that institutional ownership should be encouraged in order to strengthen monitoring of firms through debt financing in Nigeria.