This study analyzed the trends and patterns of capital structure and performance of financial firms in the Nigerian banking sectorwith panel data of 14 commercial banks in Nigeria over the periods 2005-2012..Descriptive methods of analysis were employed to analyze the trends and performance. The result showed that the banks exhibit 75.2% short-term financing. It shows that Nigerian banks relied heavily on external finance which is short-term in nature. Also, the result revealed that towards the end of 2008 and early 2009, the collapse of the interbank markets brought about a critical reassessment of the banksby the Central Bank of Nigeria. The study suggests that policy makers should find the means of overhauling the banking sector before its impending doom and a policy measures capable of increasing the fixed asset base of Nigerian banks.
Published in | International Journal of Finance and Banking Research (Volume 2, Issue 3) |
DOI | 10.11648/j.ijfbr.20160203.13 |
Page(s) | 72-83 |
Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
Copyright |
Copyright © The Author(s), 2016. Published by Science Publishing Group |
Trends, Patterns, Capital Structure, Descriptive Statistics, Performance
[1] | Abor, J. (2005), “The effect of Capital Structure on Profitability: an empirical analysis of listed firms in Ghana”,Journal of Risk Finance, 6(5): 438-445. |
[2] | Abor, J. (2007), “Debt Policy and Performance of SMEs,”Journal of Risk Finance,8(4): 364–379. |
[3] | Adeyemi, S. B., and Oboh, C. S. (2011).“Perceived Relationship between Corporate Capital Structure and Firm Value in Nigeria”.International Journal of Business and Social Science, 2(1):19-32 |
[4] | Berian, andDanbolt, (2001), “Capital Structure and its Determinants in the United Kingdom: ADecompositionalAnalysis”, Applied Financial Economics, 2(1):32-42 |
[5] | Brounen, D., and Eichholtz, P.M.A. (2001), “Capital Structure Theory: Evidence from EuropeanProperty Companies Capital offerings”, Forthcoming in Real Estate Economics, 21(4): 201-305 |
[6] | Chen, J.J. (2003),“Determinants of Capital Structure of Chinese Listed Companies”, Journal of Business Research, 1(2):42-58. |
[7] | Chen, C.J.P., Cheng, C.S.A., He, J and Kim. J. (1997), “An Investigation of the Relationship between International Activities and Capital Structure”, Journal of International Business Studi, (Third Quarter), 2(1):563–577. |
[8] | Donald, G. (1961), “Corporate debt Capacity: A study of corporate debt Policy anddetermination of Corporate debt Capacity”, Boston: Division of Research, Havard School ofBusiness Administration, 5(6):206-225 |
[9] | Drouglas, W. D., Rajan, R.J. (2000), A theory of Bank capitalJournal of Finance, 55(6):20-56 |
[10] | Eisenchardt, K.M. (1989), Agency theory: An assessment and review. The academy of management Review, 14(2): 57-74. |
[11] | Fama, E. F. (1980), “Agency Problem and the Theory of the Firm”, Journal of Political Economy,88(2):288–307. |
[12] | Fama, E.F. (1981), “Stock Returns, Real Activity, Inflation and Money”, American EconomicReview, 71(2):545–565. |
[13] | Fama, E.F.and French, K.R. (2002), “Testing Trade-off and Pecking order Predictions aboutDividends Debts, Review of Financial Studies, 15(2): 133-139. |
[14] | Fama, E.F. and Jensen, M.C (1983), “Separation of Ownership and Control” Journal of Law and Economics, 26(1): 301-325. |
[15] | Frank, M.Z. andGoyal, V.K.(2003), “Trade-off and Pecking Order Theories of Debt”, Journal of Financial Economics, 8(1): 217-248. |
[16] | Green, C. J., Murinde, V. and Suppakitjarak, J. (2003), “Corporate Financial Structure in India”.South Asian Economic Journal, 4(2):245–274. |
[17] | Gropp, R.,Heider,F. (2008), “The determinants of capital structure. Some evidence from banks” Centre of European Economic Research, 2(1):305-375. |
[18] | Gropp, R., and Heider, F. (2010), “The determinants of Bank Capital Structure”, Review of Finance 14(1): 587:62. |
[19] | Howe, S.S. and Shilling, J.D. (1988), “Capital Structure Theory and REIT Security Offerings”. Journal of Finance, 43(2): 983–993. |
[20] | IorPev, L. and Kwanum, I.M. (2012), “Capital structure and Firm Performance: Evidence from manufacturing companies in Nigeria”, International Journal of Business and Management Tomorrow.2(5):205-221 |
[21] | Jensen, M. (1986), “Agency Costs of free cash flow, Corporate Finance and takeovers”. American Economic Review. 76(2):55-81. |
[22] | Jensen, M.C. and Meckling, W.H.(1976), “Theory of the Firm: Managerial Behaviour, Agency Costs and Ownership Structure”, Journal of Financial Economics, 3(2): 303-360. |
[23] | Jensen, M,; Solberg, D. andZorn, T. (1992), “Simultaneous Determinants of insider Ownership, Debt and Dividend Policies”, Journal of Financial and Quantitative Analysis,27(3): 247–261. |
[24] | Kester, V. (1986), “Capital and Ownership Structure: A Comparison of United States and Japanese Manufacturing Corporations” Financial Managements,2(1):5–16. |
[25] | Kraus A., and Litzenberge R.H., (1973), “A State Preference Model of Optimal FinancialLeverage”,Journal of Finance, 7(2): 911–922. |
[26] | Lee, Jong – Wha, Lee, Y.S and Lee, Byung - Sun (2000), s“The Determination of CorporateDebt in Korea”, Asian Economic Journal,14(4):5-17. |
[27] | Lewis, P., Stein, H. (1997), “Shifting Fortunes: The Policies Economy of FinancialLiberalization in Nigeria”, World Development, 25(2): 5-22. |
[28] | Margarits, D., Psillaki, M. (2007), “Capital Structure and firm efficiency”, Journal of Business Fiancé and Accounting,34(2): 1447–1469. |
[29] | Miller, M.H. (1977),“Debt and Taxes”, Journal of Finance, 32(2): 297-355. |
[30] | Modigliani, F.and Miller, M.H. (1958), “The cost of capital, Corporate Finance and the theory of investment”, American Economic review, 48(3):261-297. |
[31] | Myers, S. (1984), “The Capital structure puzzle”, Journal of Finance, 39(2):575-592. |
[32] | Myers, S.C. (2007), “Determinant of Corporate borrowing”, Journal of financial Economics, 2(1):147-175. |
[33] | Myers, S.C., Majluf, N. (1984), “Corporate Financing and Investment decisions when firms have information investors do not have”, Journal of financial Economics, 39(2): 575-592. |
[34] | Nengiju J., Robert P., Allen, M. P., and Weisbach, M.S. (2005), Journal of Financial and Quantitative Analysis, 2(2):485-521. |
[35] | Olowe, R.A. (2009), “Financial Management Cponcepts Analysis and Capital”, Lagos, Pp. 38-60. |
[36] | Vasa,O. A., and Ose, A. D. (2010), “Capital Structure and Corporate performance in Nigeria: An empirical Investigation”, AAU JMS,1(2): 10-38. |
[37] | Onaolapo, A. A. and Kajola, S. O. (2010), “Capital Structure and firm Performance: Evidence from Nigeria”, European Journal of Economics, Finance and Administrative Science,1(2):35-87. |
[38] | Oswald, B. (2006), “Guide to Financial Analysis. New York: Mcgraw Hill Publications”,2(2): 36- 37. |
[39] | Pandey, I.M. (2004), “Capital Structure, Profitability and Market Structure: Evidence from Malaysia”, Asia Pacific Journal of Economics and Business,8(1):12-15. |
[40] | Rongbing H. J., Ritter, J. R. (2009), “Testing Theories of Capital structure and Estimating the speed of Adjustment”, Journal of financial and Quantitative Analysis, 44(2):2-10. |
[41] | Salawu, R.O. (2007), “The determinants of the capital structure of Financial firms in Nigeria: The Financial Managers’ Perspectives”, The Global Journal of Business Research, 1(1): 60-68. |
[42] | Salawu, R.O., and Agboola, A.A. (2008), “The determinants of capital structure of large non-financial listed firms in Nigeria” The International Journal of Business and Finance Research, 2(2):75-84. |
[43] | Salman S. A. and Anjan V. T. (1987), “Optimal Capital Structure and Project Financing” Journal of Economic Theory, 42(2): 209-235. |
[44] | Shirai, S. (2002), “Have Ladias Financial Market Reforms change Firm’s Corporate Financing Pattern?” Research Paper Series, NO38, ADB Institute. |
[45] | Titman, S., and Wessels, R. (1988), “The Determinants of Capital Structure Choice”, Journal of Finance, 43(2): 1–19. |
[46] | Van Home, J. C. (2007), “Financial Management and Policy. 4th Ed. Englewood Cliffs: Prentice Hall”, 5(2): 672–688. |
[47] | Walter, J.E. (2009), “A Discriminant Function for earnings Price ratios of Large Industrial Corporations”,Review of economics and statistics, 41(2):44-52. |
APA Style
Philip Olawale Odewole, Rafiu Oyesola Salawu. (2016). The Trends and Patterns of the Capital Structure and Performance of the Nigerian Banks. International Journal of Finance and Banking Research, 2(3), 72-83. https://doi.org/10.11648/j.ijfbr.20160203.13
ACS Style
Philip Olawale Odewole; Rafiu Oyesola Salawu. The Trends and Patterns of the Capital Structure and Performance of the Nigerian Banks. Int. J. Finance Bank. Res. 2016, 2(3), 72-83. doi: 10.11648/j.ijfbr.20160203.13
AMA Style
Philip Olawale Odewole, Rafiu Oyesola Salawu. The Trends and Patterns of the Capital Structure and Performance of the Nigerian Banks. Int J Finance Bank Res. 2016;2(3):72-83. doi: 10.11648/j.ijfbr.20160203.13
@article{10.11648/j.ijfbr.20160203.13, author = {Philip Olawale Odewole and Rafiu Oyesola Salawu}, title = {The Trends and Patterns of the Capital Structure and Performance of the Nigerian Banks}, journal = {International Journal of Finance and Banking Research}, volume = {2}, number = {3}, pages = {72-83}, doi = {10.11648/j.ijfbr.20160203.13}, url = {https://doi.org/10.11648/j.ijfbr.20160203.13}, eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijfbr.20160203.13}, abstract = {This study analyzed the trends and patterns of capital structure and performance of financial firms in the Nigerian banking sectorwith panel data of 14 commercial banks in Nigeria over the periods 2005-2012..Descriptive methods of analysis were employed to analyze the trends and performance. The result showed that the banks exhibit 75.2% short-term financing. It shows that Nigerian banks relied heavily on external finance which is short-term in nature. Also, the result revealed that towards the end of 2008 and early 2009, the collapse of the interbank markets brought about a critical reassessment of the banksby the Central Bank of Nigeria. The study suggests that policy makers should find the means of overhauling the banking sector before its impending doom and a policy measures capable of increasing the fixed asset base of Nigerian banks.}, year = {2016} }
TY - JOUR T1 - The Trends and Patterns of the Capital Structure and Performance of the Nigerian Banks AU - Philip Olawale Odewole AU - Rafiu Oyesola Salawu Y1 - 2016/06/07 PY - 2016 N1 - https://doi.org/10.11648/j.ijfbr.20160203.13 DO - 10.11648/j.ijfbr.20160203.13 T2 - International Journal of Finance and Banking Research JF - International Journal of Finance and Banking Research JO - International Journal of Finance and Banking Research SP - 72 EP - 83 PB - Science Publishing Group SN - 2472-2278 UR - https://doi.org/10.11648/j.ijfbr.20160203.13 AB - This study analyzed the trends and patterns of capital structure and performance of financial firms in the Nigerian banking sectorwith panel data of 14 commercial banks in Nigeria over the periods 2005-2012..Descriptive methods of analysis were employed to analyze the trends and performance. The result showed that the banks exhibit 75.2% short-term financing. It shows that Nigerian banks relied heavily on external finance which is short-term in nature. Also, the result revealed that towards the end of 2008 and early 2009, the collapse of the interbank markets brought about a critical reassessment of the banksby the Central Bank of Nigeria. The study suggests that policy makers should find the means of overhauling the banking sector before its impending doom and a policy measures capable of increasing the fixed asset base of Nigerian banks. VL - 2 IS - 3 ER -