ASSESSING THE IMPACT OF ASSET TANGIBILITY ON CAPITAL STRUCTURE: CHOICE FOR LISTED FIRMS IN NIGERIA

Abstract

This paper seeks to examine determinates of corporate financing pattern for listed firms on the Nigeria stock exchange. Several studies have been conducted on financing patterns and capital structures in western countries with very little studies carried out on developing nation. The main objective of this paper is to investigate if observed trend of financing patterns in western countries is applicable within the Nigeria context. The theoretical contributions of trade-off, agency and pecking order theories were examined in assessing impact of asset tangibility on financing patterns for listed Nigerian firms. Results shows that Nigerian firms do not follow observed patterns observed in western countries. In analysing firm leverage, Nigeria firms were found to have a positive nonstatistical significant correlation between asset tangibility and leverage.