Authors :
Maduka, Ifeoma Kate Nonyelum; Agbi, Samuel Eniola; Lateef Olumide Mustapha
Volume/Issue :
Volume 8 - 2023, Issue 5 - May
Google Scholar :
https://bit.ly/3TmGbDi
Scribd :
https://tinyurl.com/7vds8s7m
DOI :
https://doi.org/10.5281/zenodo.8055363
Abstract :
The Research objective of the discourse
examined Capital Structure Substitution effect on the
financial performance of various listed manufacturing
firms in Nigeria.The period of study covered the
timeframe of 2007 to 2021 with sample of twenty firms
out of the population of fifty-nine listed manufacturing
firms. This paper used earnings per share of the selected
manufacturing firms to measure the financial
performance .The research equally used capital
structure substitution to measure the moderating effect
of capital structure on financial performance. The study
utilized secondary data retrieved from NSE fact book
and Nigerian Exchange Group as well as yearly financial
statements of the listed manufacturing firms. The
research design used for the study was ex-post facto
approach and the data wasanalyzed using multiple
regression, descriptive statistics and co-integration test.
Results revealed from the study showed that Long Term
Debt to Total Equity proved a negative and significant
influence on manufacturing industries financial
performance. Results also showed that Long Term Debt
to Market Value indicated positive as well as significant
influence on industry performance, and Capital
Structure Substitution has positive moderating
intervening effect on financial performance. The findings
of the study were statistically robust and significant. The
study revealed that the independent variables proxied by
Long Term Leverage Debt to Equity (LTDTE), Long
Term Debt to Market Value (LTDMV) and Long Term
Debt to Total Assets (LTDTA) and that Capital
Structure Substitution (CSS) contributes to enhanced
financial performance and capitals structure substitution
has a significant (CSS) contribution to enhanced
financial performance. Other findings proved that the
capital structure variables affect earnings per share but
on selected proxies. As a result of this, the study
concluded that capital structure substitution has a
significant moderating effect on financial performance of
listed manufacturing firms in Nigeria. Therefore, the
paper recommended that since the best optimal
structure is achieved when earnings per share is
maximized, firms should incorporate capital structure
substitution in their business decisions. This could be
achieved by encouraging listed manufacturing firms to
repurchase shares, and issue debt to the level where
earnings per share (EPS) will be maximized.
Keywords :
Capital Structure, Financial Performance, Capital Structure Substitution, Earnings per share, Return on Equity.
The Research objective of the discourse
examined Capital Structure Substitution effect on the
financial performance of various listed manufacturing
firms in Nigeria.The period of study covered the
timeframe of 2007 to 2021 with sample of twenty firms
out of the population of fifty-nine listed manufacturing
firms. This paper used earnings per share of the selected
manufacturing firms to measure the financial
performance .The research equally used capital
structure substitution to measure the moderating effect
of capital structure on financial performance. The study
utilized secondary data retrieved from NSE fact book
and Nigerian Exchange Group as well as yearly financial
statements of the listed manufacturing firms. The
research design used for the study was ex-post facto
approach and the data wasanalyzed using multiple
regression, descriptive statistics and co-integration test.
Results revealed from the study showed that Long Term
Debt to Total Equity proved a negative and significant
influence on manufacturing industries financial
performance. Results also showed that Long Term Debt
to Market Value indicated positive as well as significant
influence on industry performance, and Capital
Structure Substitution has positive moderating
intervening effect on financial performance. The findings
of the study were statistically robust and significant. The
study revealed that the independent variables proxied by
Long Term Leverage Debt to Equity (LTDTE), Long
Term Debt to Market Value (LTDMV) and Long Term
Debt to Total Assets (LTDTA) and that Capital
Structure Substitution (CSS) contributes to enhanced
financial performance and capitals structure substitution
has a significant (CSS) contribution to enhanced
financial performance. Other findings proved that the
capital structure variables affect earnings per share but
on selected proxies. As a result of this, the study
concluded that capital structure substitution has a
significant moderating effect on financial performance of
listed manufacturing firms in Nigeria. Therefore, the
paper recommended that since the best optimal
structure is achieved when earnings per share is
maximized, firms should incorporate capital structure
substitution in their business decisions. This could be
achieved by encouraging listed manufacturing firms to
repurchase shares, and issue debt to the level where
earnings per share (EPS) will be maximized.
Keywords :
Capital Structure, Financial Performance, Capital Structure Substitution, Earnings per share, Return on Equity.
