Firms Debt Structure and Shareholder Value: The Moderating Effects of Foreign Director: A Study of Quoted Multinational Companies in Nigeria.

Isiaka Olalekan Lasisi(1), Tijani Bashir Musa(2), James George Apochi(3),

(1) Department of Accounting, Business School, Ahmadu Bello University, Zaria, Nigeria
(2) Department of Business Administration, Ahmadu Bello University, Zaria, Nigeria
(3) Bursary Department, Air Force Institute of Technology, Kaduna, Nigeria


This study uses two-stage least squares model and examines the impact of foreign directors as moderating variable on the relationship between firm debt structure and shareholders’ value of quoted multinational firms in Nigeria. Secondary data were extracted from the annual reports of 6 most active quoted multinationals firms on the Nigerian Stock Exchange for the period 2006 to 2016. The study documents that firm debt structure and foreign directors has significant impact on shareholder values of the firms, specifically, debt to equity ratio is negative and significantly impacted on shareholder value, while debt to turnover is positively and significantly related with shareholder value, but there is no such impact of foreign directors. Furthermore, debt to equity and foreign directors are positively and significantly impacted on shareholder value; while debt to turnover ratio and foreign directors reveals positive and no significant impact on shareholders’ value. In line with the findings, the study recommended that board of directors of the study firms should ensure that listed multinationals firms in Nigeria should appoint foreigner in their board composition so that the interest of various shareholder’s would be fully protected by avoiding unnecessary debt and proper management of this debt.


debt structure, multinational firms, Nigeria, shareholder value






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