Information in the Tax Benefit Curves of Selected Nigerian Quoted Firms

Paseda, Oluseun A.

doi:10.2139/ssrn.2908904

Cited by 1 publication

(1 citation statement)

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“…This paper is similar to [81][82], and [83] that consider tax effects on capital structure, tax benefit curves and debt conservatism respectively. This paper's key results are: First, the factors that exert positive influences on borrowing include prior borrowing or prior leverage, non-debt tax shields, assets' riskiness represented by R &D and other intangible assets, firm age and debt market access represented by rating.…”

Section: Introductionmentioning

confidence: 94%

Firm Size, Asset Tangibility, Growth, Volatility, Dividends and the Capital Structure of Nigerian Quoted Firms

Paseda¹

2021

JFA

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Empirical work on capital structure in emerging markets like Nigeria has been sparse and met with low explanatory power. This study investigates the determinants of capital structure in Nigeria. The population of study comprises all non-financial corporations quoted on the Nigerian Stock Exchange (NSE) for the period 1999-2014 out of which 50 companies that met the minimum data criteria were utilized. Using panel data least squares regression, modified to weighted (cross section-and period-) models, the research documents the following findings. First, the factors that exert positive influence on corporate borrowing include firm age, intangible assets and expected inflation while those factors that exert negative influence on capital structure include tangible assets, growth, size, volatility of earnings, profitability, liquidity, dividend-paying status and uniqueness of industry. The results were, at best, mixed with respect to the portability of pecking order, target adjustment, trade-off, agency and market conditions models. The pecking order beats the trade-off model based on the signs of coefficients of firm-level attributes. In order words, asymmetric information explains why smaller, less profitable, less liquid firms with more risky intangible assets and which are low dividend-payers end up relying primarily on debt financing and vice versa. The study recommends the use of leases for financially-and collateral-constrained firms as well as instruments that facilitate information symmetry in financial markets.

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Section: Introductionmentioning

confidence: 94%

Firm Size, Asset Tangibility, Growth, Volatility, Dividends and the Capital Structure of Nigerian Quoted Firms

Paseda¹

2021

JFA

View full text Add to dashboard Cite

show abstract

Information in the Tax Benefit Curves of Selected Nigerian Quoted Firms

Cited by 1 publication

References 112 publications

Firm Size, Asset Tangibility, Growth, Volatility, Dividends and the Capital Structure of Nigerian Quoted Firms

Firm Size, Asset Tangibility, Growth, Volatility, Dividends and the Capital Structure of Nigerian Quoted Firms

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