Effect of Firms Characteristics on Capital Structure of Listed Oil and Gas Firms in Nigeria

Abstract

The study examined the impact of the firm characteristics and capital structure of the listed oil and gas companies in Nigeria on the capital structure of the listed oil and gas companies, namely the size of the business, growth, profitability, tangibility and liquidity. Secondary data from the annual reports of oil and gas companies listed on the Nigerian Stock Exchange between 2010 and 2019 were used in this examination. The paper used panel regression in relation to the use of the Hausman specification test to assess the use of the fixed or random effect model. Ex-post facto research design was adopted. The outcome of the random effect regression showed that this study found that all the company characteristics (size, liquidity, tangibility of assets, growth and profitability) used in this study had a major positive effect on the oil and gas company's capital structure in Nigeria. The analysis therefore shows and suggested more studies on the capital composition of the debt ratio to be carried out by the management of the listed oil and gas companies in order to optimize the valuation of the listed companies, and the share price is concerned with reducing the cost of capital.