Corporate Governance Attributes and Capital Structure of Listed Firms in the Nigerian Food and Beverages Industry

Abstract

This paper assesses the impact of corporate governance attributes on capital structure of listed firms in the Nigerian food and beverages industry from 2003 to 2012. The study uses leverage (LEV) as dependent variable while board size (BSZ), board composition (BCO), managerial shareholding (MSH), tangibility of assets (TAN) and growth (GRW) are the explanatory variables. Nine firms that had been quoted before the year of the study (2003) are considered in this paper. The sample size of the study is derived using sample selection formula, from the calculation six out of nine firms emerged as the sample size after giving all the firms the equal chance of being picked through random sampling technique. The data generated from annual reports of the sample firms are analyzed using Pearson correlation coefficient and multivariate regression analysis. The results reveal that tangibility of assets and growth have positive relationship with leverage while board size, board composition and managerial shareholding have negative relationship with leverage. Similarly, the researcher recommends that firms should embrace a well established corporate governance structures that will assist them to gain easier access to credit at lower cost.