FIRM CHARACTERISTICS AND FINANCIAL LEVERAGE OF QUOTED FINANCIAL FIRMS IN NIGERIA

ABSTRACT This study examines the firm characteristics and financial leverage of quoted financial firms in Nigeria. The population comprises of all the quoted 49 financial firms in Nigeria while a filtering sampling technique was used to arrive at forty-one (41) sampled firms covering the periods of 2012 to 2022. The data were analysed using Shapiro-Wilk Normality, Pearson correlation, Variance Information Factor (VIF), Heteroskedasticity Breusch-Pagan Test, Hausman specification test and while hypotheses were tested using robust random effect regression model. The results showed that both earning volatility and firm liquidity have significant effects on financial leverage of quoted financial firms in Nigeria for the period under review. However, the results showed that non-debt tax shield has an insignificant effect on financial leverage of quoted financial firms in Nigeria for the period under review. The study recommends that the financial firms with high earning volatility should use low leverage level in Nigeria to gauge their capital structure and boost their performance. Also, the financial firms with high liquidity should use low leverage level in Nigeria. The liquidity need of firms should be put into consideration to guide the firms against the level of their leverage level.

0 19 May, 2026

pg: 11

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