Authors : Alex Ambore Bruce

Volume/Issue : Volume 11 - 2026, Issue 4 - April

---

Google Scholar : https://tinyurl.com/3mcy57cf

Scribd : https://tinyurl.com/2dj5ha6c

DOI : https://doi.org/10.38124/ijisrt/26apr1477

Note : A published paper may take 4-5 working days from the publication date to appear in PlumX Metrics, Semantic Scholar, and ResearchGate.

---

Abstract : The findings however, suggest that capital structure decisions in Nigeria may not have the similar strategic impact observed in more developed economies because of the erosion of tax shield due to volatile inflation rates, high interest rates and inconsistent tax policies. The study supports the Pecking Order Theory, highlighting a preference for internal financing in an inconsistent economy with high characteristics of imperfection, although in seldom occasions, cautions against over-reliance on any single method. Practical recommendations are made for corporate managers and policymakers on optimal financing strategies under uncertainty and in an imperfect economy.

Keywords : Capital Structure, Leverage, Internal Financing, Nigeria, Firm Performance.

References :

1. Abubakar, M. A. (2023). Capital structure decisions and firm performance in Nigeria: A sectoral analysis. Journal of African Business, 24(1), 1–19.
2. Acaravci, S. K. (2015). The determinants of capital structure: Evidence from the Turkish manufacturing sector. International Journal of Economics and Financial Issues, 5(1), 158–171.
3. Adegbite, T. (2023). Corporate debt and firm resilience in emerging markets: Evidence from Nigeria. International Journal of Finance and Economics, 28(2), 1–14.
4. Baker, M., & Wurgler, J. (2002). Market timing and capital structure. Journal of Finance, 57(1), 1–32. https://doi.org/10.1111/1540-6261.00414
5. Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs, and ownership structure. Journal of Financial Economics, 3(4), 305–360.
6. Kraus, A., & Litzenberger, R. H. (1973). A state-preference model of optimal financial leverage. Journal of Finance, 28(4), 911–922.
7. Modigliani, F., & Miller, M. H. (1958). The cost of capital, corporation finance and the theory of investment. American Economic Review, 48(3), 261–297.
8. Modigliani, F., & Miller, M. H. (1963). Corporate income taxes and the cost of capital: A correction. American Economic Review, 53(3), 433–443.
9. Myers, S. C., & Majluf, N. S. (1984). Corporate financing and investment decisions when firms have information that investors do not have. Journal of Financial Economics, 13(2), 187–221.
10. Olaniyi, T. A., & Macaulay, K. A. (2022). Pecking order behavior of listed non-financial firms in Nigeria. Accounting and Finance Research, 11(1), 45–60.
11. Okonkwo, O., & Dada, R. O. (2023). Macroeconomic uncertainty and financing behavior in Nigerian firms. International Journal of Emerging Markets, 18(3), 502–518.