Impact of Country Macro Factors and Firm Specific Factors on Debt Capital Structure: Evidence from Non-Financial Firms in Nigeria

Abstract

This study looks into how non-financial enterprises in Nigeria make decisions about their debt structures based on firm-specific and country-macro factors. The study uses secondary data from Nigerian non-financial companies that were listed between 2010 and 2024. The study employed a Panel OLS to analyze the collected data. The panel regression's findings show how firm-specific factors (firm sales, profits, fixed assets, and tax) and macro factors (inflation, interest rates, currency rates, and gross domestic product growth) affect the debt capital structure of Nigeria's non-financial companies. The findings show that whereas interest rates, taxes, and exchange rates are negatively correlated with debt capital structure, GDP growth rates, inflation rates, firm size, and profit are positively correlated. When making long-term funding decisions, the study advises company managers in the Nigerian sector to consider the potential effects of these macro and firm specific factors on their funding choices as well as their implications for the sector's overall growth.