SIZE, AGE AND LEVERAGE OF NIGERIA QUOTED OIL AND GAS CORPORATIONS

Onipe Adabenege Yahaya,Bilyaminu Tijjani

doi:10.35631/aijbaf.36005

Onipe Adabenege Yahaya, Bilyaminu Tijjani

Open Access

https://doi.org/10.35631/aijbaf.36005

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Abstract

Firm size and age influence firm-level leverage. The extent of such influence on the oil and gas industry is not known in Nigeria. There are very few empirical studies that interrogate the effects of firm size and listing age on leverage in Nigeria. This study examines the impacts of firm size and listing age on firm-level financial leverage of listed oil and gas companies in Nigeria. It was non-experimental research and correlational in nature. Data were extracted from annuals and accounts of 8 firms over a period of 13 years (2007-2019) and subjected to descriptive statistics (number of observations, mean, standard deviations, mean, minimum and maximum means) and inferential statistics (multiple regression analysis). The findings show that firm size has a negative and significant impact on firm-level financial leverage. Firm age has a positive and significant effect on firm-level leverage. In this paper, we contribute to the literature by examining the presence and direction of firm size and listing age to financial leverage user data from listed oil and gas firms in Nigeria. Our study is the first to address the adverse implications of Modeling with firm size and listing age on firm-level financial leverage.

Highlights

Financial leverage (FL), otherwise known as debt, or gearing could be an important part of organizational capital structure
This study examines the impacts of firm size and listing age on firm-level financial leverage of listed oil and gas companies in Nigeria
The findings show that firm size has a negative and significant impact on firm-level financial leverage

Summary

Introduction

Financial leverage (FL), otherwise known as debt, or gearing could be an important part of organizational capital structure. FL is the ratio of a firm’s borrowed capital to total assets or equity. It is known as gearing and is often considered as an explanatory factor affecting financial performance or dividend policy or any factor and not as explained variable. Financial leverage is affected by several factors. We will consider only two factors: firm size and listing age. Whether big size firm or small size firms or old firms or young firms have financial leverage in their portfolios

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