Board Composition, Board Size and Market Value of Listed Industrial Goods Companies in Nigeria

Abstract

This study examines the impact of board composition and board size on the market value of listed industrial goods companies in Nigeria. Ex-post factor research design was used and data was collected from annual reports and account of the sampled companies for the period from 2010 to 2019. The ordinary least square, fixed and random effects regression techniques were applied on the panel data collated to estimate the models. The paper documents significant positive effect of board size on the market value of the companies and insignificant but negative effect of board composition on the market value of the companies. In effect, the result suggests that board size plays important role in determining the market value of the firms. These findings are consistent with the agency theory of corporate governance which suggests higher number of members on board. It is recommended that the size of the board of firms in the sector should not be less than 9 members so as to enhance value.

Capital Structure–Firm Performance Nexus: The Moderating Effect of Board Independence

“…Following the addition of board independence, our results displayed a significant positive correlation between leverage and firm performance as shown in the estimation results of Model 2. This corroborates with the previous empirical works by Abdulkarim and Bahamman (2021) and Ramli et al (2019), suggesting that higher gearing will enhance firms' profitability. The positive association is probable to the tendency of Malaysian firms to use external financing instead of internal financing to enhance their financial performance.…”

“…Results showed a significant negative moderating effect of board independence in the capital structure and firm performance relationship. It was observed that adding independent directors to the board has negatively changed the association between debt and firm performance, which is consistent with the empirical work of Abdulkarim and Bahamman (2021). In contrast to Mubaraq, Rahayu, Saifi, and Darmawan (2021), this study implies that increasing the control exercised by independent directors to reduce agency conflicts has an adverse impact on the relationship between debt and performance.…”

“…On one hand, several studies demonstrate that leverage is positively correlated with profitability and value. For instance, Abdulkarim and Bahamman (2021) revealed that capital structure has a significant positive impact on profitability, implying that higher leverage will enhance firm performance. Gill, Biger, and Mathur (2011) reported a positive relationship between debt and firm profitability, suggesting a greater tendency for profitable firms to rely more on debt mainly due to interest tax shield benefits.…”

“…Performance: Despite the ongoing debate, no conclusion has yet been drawn on the direct association between capital structure and firm performance. While empirical evidence to date remains inconclusive, several studies (see for example Jermias, 2008, Pham andNguyen, 2020a;Abdulkarim and Bahamman, 2021) argued that a moderating factor should be considered to validate such a relationship.…”

قياس أثر خصائص مجلس الإدارة على القيمة السوقية لأسهم الشركات المدرجة بالسوق المالية السعودية : دراسة حدث

“…‫اإلعالن‬ ‫أثر‬ ‫المالية‬ ‫السوق‬ ‫يستوعب‬ ‫بحيث‬ ‫مناسبة‬ ‫ة‬ ‫فتر‬ ‫تعد‬ ‫ة‬ ‫الفتر‬ ‫هذه‬ ‫أن‬ ‫الباحث‬ ‫ويرى‬ ‫الشركات.‬ ‫حوكمة‬ ‫آليات‬ ‫خصائص‬ ‫عن‬ ‫معلومات‬ ‫من‬ ‫يحتويه‬ ‫وما‬ ‫ة‬ ‫اإلدار‬ ‫مجلس‬ ‫ير‬ ‫تقر‬ ‫عن‬ Corrado, 2011;Lehmann & Schwerdtfeger, 2016;Rahman et al, 2021;Roca, 2013;Syed & Bajwa, 2018 Abdulkarim et al, 2020;Ahulu & MacCarthy, 2019;Al Farooque et al, 2020;Al Harbi, 2018;Assidi, 2020;Bansal & Sharma, 2016;Devi & Suardana, 2021;Dunstan et al, 2011;Fariha et al, 2021;Khalifa, 2018;Khanh et al, 2020;Syafitri, Ahulu & MacCarthy, 2019;Al Farooque et al, 2020;Assidi, 2020;Bhat et al, 2018;Chua & Ab Razak, 2018;Devi & Suardana, 2021;Dunstan et al, 2011;Gurusamy, 2017;Khalifa, 2018;Khan et al, 2017;Khanh et al, 2020 Ananzeh, I. N. (2021). investigating the efficiency of financial markets: empirical evidence from mena countries.…”