MODERATING INFLUENCE OF MANAGERIAL OWNERSHIP ON DEBT FINANCING AND FINANCIAL PERFORMNCE OF LISTED MANUFACTURING FIRMS IN NIGERIA
Abdullahi D. Ibrahim, PhD, Ahmed Hassan Ahmed, Ramalan Murtala Muhammed, Zainab Abdulsalami and Aliyu Ahmed Tanko
Volume 8 Issue 1
Abstract
This study aimed at investigating the influence of managerial ownership on financial performance of listed manufacturing firms in relation to debt financing. It was anchored by agency cost theory, pecking order theory and trade-off theory. Panel data regression model was used to analyze data for a period of 2011-2020. The source of data was mainly secondary and collected from twelve (12) of the forty-three (43) listed manufacturing firms in Nigeria. Findings revealed positive effect of long term debt financing on financial performance of listed manufacturing firms in Nigeria and negative effect of total debt financing on financial performance. Managerial ownership has negative relationship with financial performance. The results further showed that the interaction of debt financing and managerial ownership does not significantly influence the effect of debt financing on financial performance of listed manufacturing firms in Nigeria. The study recommends that listed manufacturing firms should consider their retained earnings to finance their day to day business operations instead of relying on debt financing, and directors should only own minority shareholding right in their companies. Keywords: Managerial Ownership, Debt Financing, Financial Performance, Return on Equity, Moderating Effect
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