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Firm-specific determinants of debt maturity structure of listed non-financial firms in Nigeria

The importance of debt financing to firms as a basis for decision-making cannot be over-emphasized. This implies that the maturity structure of debts becomes important for understanding the outcomes of firms’ decisions. There is a dearth of evidence from the Nigerian context in the current body of...

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Main Authors: Mohammed, Lawal, Musa Mubi, Aliyah
Format: Article
Language:English
Published: UUM Press 2020
Subjects:
HF5601 Accounting
Online Access:http://repo.uum.edu.my/28194/1/MMJ%2024%202020%2077%20102.pdf
http://repo.uum.edu.my/28194/
http://doi.org/10.32890/mmj.24.2020.9732
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spelling my.uum.repo.281942021-02-17T01:50:55Z http://repo.uum.edu.my/28194/ Firm-specific determinants of debt maturity structure of listed non-financial firms in Nigeria Mohammed, Lawal Musa Mubi, Aliyah HF5601 Accounting The importance of debt financing to firms as a basis for decision-making cannot be over-emphasized. This implies that the maturity structure of debts becomes important for understanding the outcomes of firms’ decisions. There is a dearth of evidence from the Nigerian context in the current body of literature on factors that determine debt maturity structure of listed firms. We observed a persistent and steady decline in the average ratio of length of maturity period among non-financial firms among listed non-financial firms in Nigeria. This study examined the extent to which non-debt tax-shield, liquidity, assets intensity, diversification, investors’ confidence, growth opportunity, firm size, profitability and dividend policy determines the debt maturity structure of non-financial firms in Nigeria. The secondary data collected from the annual reports of a sample of 92 listed non-financial firms were analysed using the Two-stage Generalised Method of Moments (GMM) regression model for the period between 2010 and 2015. The results indicate that the non-debt tax-shield, liquidity, assets intensity, diversification, growth opportunity, firm size and the dividend policy significantly determine the debt maturity structure among the listed non-financial firms in Nigeria. However, the evidence is not enough to conclude that profitability and investors’ confidence determine the debt maturity structure among the non-financial firms in Nigeria. Firm diversification and liquidity appeared to have the most profound negative effect on the debt maturity structure in line with predictions of special use of debt hypothesis and the pecking order theory.Overall, it is concluded that the firm-specific factors determine the choice of debt maturity structure among Nigerian listed non-financial firms. Although the findings of the study are robust, future studies in the areas can extend the literature by identifying and investigating institutional and macroeconomic factors that drive debt maturity structure in Nigeria. UUM Press 2020 Article PeerReviewed application/pdf en http://repo.uum.edu.my/28194/1/MMJ%2024%202020%2077%20102.pdf Mohammed, Lawal and Musa Mubi, Aliyah (2020) Firm-specific determinants of debt maturity structure of listed non-financial firms in Nigeria. Malaysian Management Journal, 24. pp. 77-102. ISSN 0128-6226 http://doi.org/10.32890/mmj.24.2020.9732 doi:10.32890/mmj.24.2020.9732
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Institutional Repository
url_provider http://repo.uum.edu.my/
language English
topic HF5601 Accounting
spellingShingle HF5601 Accounting
Mohammed, Lawal
Musa Mubi, Aliyah
Firm-specific determinants of debt maturity structure of listed non-financial firms in Nigeria
description The importance of debt financing to firms as a basis for decision-making cannot be over-emphasized. This implies that the maturity structure of debts becomes important for understanding the outcomes of firms’ decisions. There is a dearth of evidence from the Nigerian context in the current body of literature on factors that determine debt maturity structure of listed firms. We observed a persistent and steady decline in the average ratio of length of maturity period among non-financial firms among listed non-financial firms in Nigeria. This study examined the extent to which non-debt tax-shield, liquidity, assets intensity, diversification, investors’ confidence, growth opportunity, firm size, profitability and dividend policy determines the debt maturity structure of non-financial firms in Nigeria. The secondary data collected from the annual reports of a sample of 92 listed non-financial firms were analysed using the Two-stage Generalised Method of Moments (GMM) regression model for the period between 2010 and 2015. The results indicate that the non-debt tax-shield, liquidity, assets intensity, diversification, growth opportunity, firm size and the dividend policy significantly determine the debt maturity structure among the listed non-financial firms in Nigeria. However, the evidence is not enough to conclude that profitability and investors’ confidence determine the debt maturity structure among the non-financial firms in Nigeria. Firm diversification and liquidity appeared to have the most profound negative effect on the debt maturity structure in line with predictions of special use of debt hypothesis and the pecking order theory.Overall, it is concluded that the firm-specific factors determine the choice of debt maturity structure among Nigerian listed non-financial firms. Although the findings of the study are robust, future studies in the areas can extend the literature by identifying and investigating institutional and macroeconomic factors that drive debt maturity structure in Nigeria.
format Article
author Mohammed, Lawal
Musa Mubi, Aliyah
author_facet Mohammed, Lawal
Musa Mubi, Aliyah
author_sort Mohammed, Lawal
title Firm-specific determinants of debt maturity structure of listed non-financial firms in Nigeria
title_short Firm-specific determinants of debt maturity structure of listed non-financial firms in Nigeria
title_full Firm-specific determinants of debt maturity structure of listed non-financial firms in Nigeria
title_fullStr Firm-specific determinants of debt maturity structure of listed non-financial firms in Nigeria
title_full_unstemmed Firm-specific determinants of debt maturity structure of listed non-financial firms in Nigeria
title_sort firm-specific determinants of debt maturity structure of listed non-financial firms in nigeria
publisher UUM Press
publishDate 2020
url http://repo.uum.edu.my/28194/1/MMJ%2024%202020%2077%20102.pdf
http://repo.uum.edu.my/28194/
http://doi.org/10.32890/mmj.24.2020.9732
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score 13.211869

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