Corporate Governance Mechanisms And Capital Structure of Listed Foods And Beverages Firms In Nigeria.
ABSTRACT
The study examines corporate governance mechanisms on capital structure of listed food andbeverages in Nigeria. The sole objective is to explore the impact of corporate governancemechanisms on capital structure for a period of ten years, from 2004 to 2013.
The studyemployed secondary data from the annual reports and the Nigeria Stock Exchange (NSE) factbooks within the period of the study.
Generalized Least Square Regression Technique for dataanalysis was employed to investigate relationship that exists between capital structure andvarious independent variables in the model.
The study reveals that ownership concentration andboard composition of the explanatory variables are statistically and significantly influencing theexplained variable proxied by debt to total capital and debt total asset.
On the other hand,institutional ownership of our explanatory variables is not significantly influencing the capitalstructure.
Ownership concentration, board composition and firm size have significant impact ondebt to total capital at 1% level, while institutional ownership has insignificant impact on theleverage.
It is concluded that corporate governance mechanisms are good variables that impacton capital structure.
TABLE OF CONTENTS
Title page
Declaration- – – – – – – – – – i
Certification- – – – – – – – – – ii
Dedication – – – – – – – – – – iii
Acknowledgement- – – – – – – – – v
Abstract- – – – – – – – – – – vii
Table of Content – – – – – – – – – viii
CHAPTER ONE: INTRODUCTION
1.1 Background to the Study – – – – – – – 1
1.2 Statement of the Problem- – – — – – – 6
1.3 Objective of the Study – – – – – – – 8
1.4 Hypotheses of the Study – – – – – – – 9
1.5 Scope of the Study – – – – – – – – 9
1.6 Significant of the Study – – – – – – – 9
CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction – – – – – – – – – 11
2.2 Concept of Corporate Governance – – – – – 11
2.3 Concept of Capital Structure – – – – – – 15
2.4 Empirical Studies on Corporate Governance and Capital Structure – 23
2.5 Corporate Governance in Nigeria – – – – – – 39
2.6 Right of Shareholders of Food & Beverages firms in Nigeria – 43
2.7 Theoretical Framework – – – – – – – 48
CHAPTER THREE: RESEACH METHODOLOGY
3.1 Introduction – – – – – – – – 51
3.2 Research Design – – – – – – – – 51
3.3 Population of the Study – – – – – – – 51
3.4 Sample size and Sampling Technique – – – – – 52
3.5 Sources and Method of Data Collection – – – – 52
3.6 Technique of Data Analysis – – – – – – 53
3.7 Model Specification – – – – – – – 54
3.8 Variables Definition and Measurement – – – – 56
3.9 Summary – – – – – – – – – 56
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.1 Introduction – – – – – – – – 58
4.2 Descriptive Statistics – – – – – – – 58
4.3 Correlation Result – – – – – – – 62
4.4 Regression Results – – – – – – – 65
4.5 Hypothesis Testing for Model One – – – – – 67
4.6 Hypothesis Testing for Model One – – – – – 70
4.7 Discussion of Findings- – – – – – – – 73
4.8 Policy Implications of the Findings- – – – – – 74
CHAPTER FIVE: SUMMARY, CONCLUSIONS & RECOMMENDATIONS
5.1 Summary – – – – – – – – – 76
5.2 Conclusions- – – – – – – – – 77
5.3 Recommendations – – – – – – – – 78
5.4 Suggestion for further Research- – – – – – 79
References
INTRODUCTION
Background to the study
Sound corporate governance principles are the foundation upon which the trust of investors andlenders is built.
Basically, the fundamental perception and understanding of the field of corporategovernance originated from the fact that there are potential problems associated with separationof ownership and control.
This is inherent in the modern corporate form of organization with aset of institutional and market mechanisms that induce self-interested managers (controllers) tomaximize the value of the residual cash-flow of the firm on behalf of its shareholders (theowners).
This conflict within the firms leads to distortion in corporate policy choices and lowercorporate performance.
REFERENCES
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Abor, J., Biekpe & Nicholas. (2007).DoesCorporate Governance Affect the Capital StructureDecision of Ghanain SME? University of Stellenbosh Business School, SouthAfrica.
Ahmadpour, A. Jafari, A. & Golmohammadi, H. (2012). Corporate Governance and CapitalStructure: Evidence from Tehran Stock Exchange, Midle-East Journal of ScientificResearch 11 (4): 535, 2012.
Al – Najjar,B., & Hussainy, K. (2009).“Revisting the capital structure puzzle : UK Evidence“working paper” , Middlesex university , USK .
Al-Fayoumi, N., Abuzayed, B., & Alexander, D. (2010). Ownership Structure and Earnings:Journal of Accounting and Economics, 37, 315-342.
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