Moderating Effect of Corporate Governance Attribute on the Relationship Between Capital Structure and Financial Performance of Listed Multinational Companies in Nigeria

Abstract

The main objective of the study is to examine the moderating effect of corporate governance attributes on the relationship between capital structure and the financial performance of listed multinational companies in Nigeria. The study adopts an ex-post facto research design. The study uses panel data extracted from the published annual reports and accounts of 11 listed multinational companies on the Nigerian Exchange Group as at December 2023 based on census sampling techniques in consideration of the multinational companies. Panel data is meant to account for and measure effects that cannot be simply observed by pure cross-section or pure time series data over the period 2019-2023. Regression analysis techniques was used with the aid of STATA 13 Version Software. The finding reveals the lack of a significant effect of TDTE on financial performance suggesting that this ratio may not be a strong predictor of performance in this context. The significant effect of TDTA on financial performance indicates that how much total debt a company uses relative to its assets is a meaningful factor. The significant moderating effect of board size on the relationship between TDTE and financial performance suggests that larger boards may better manage or monitor debt levels. The significant moderating effect of board size on the relationship between TDTA and financial performance indicates that board size plays a crucial role in managing the effects of debt ratios. The recommends among others that since TDTE was not found to significantly impact financial performance, companies should ensure their debt policies are aligned with broader strategic goals rather than focusing solely on the debt-to-equity ratio.

Keywords: Corporate Governance, Capital Structure, Financial Performance, Financial Performance