CAPITAL STRUCTURE AND CORPORATE PERFORMANCE OF LISTED PHARMACEUTICAL COMPANIES IN NIGERIAAbstract:
This study examined capital structure and corporate performance of listed pharmaceutical companies in Nigeria. The study specifically analyzed the impact of short-term debt (STD), long term debt (LTD) and Firms Size (FZ) on return on equity (ROE). The study focused on five pharmaceutical companies listed on the Nigeria stock exchange. Secondary data were collected from annual reports of sampled pharmaceutical companies over a period of six years (2012-2017) and were analyzed using descriptive analysis, correlation analysis, pooled OLS estimator, fixed effect estimator, and random effect estimator and Hausman test. The most consistent and efficient estimator revealed that short term debt exerts insignificant positive effect on return on equity, with coefficient estimate of 0.094800 (p=0.0946> 0.05), effect of long-term debt is negative and significant, with coefficient estimate of -0.302446 (p=0.0094< 0.05), and firms size exert insignificant negative impact on return on equity, with coefficient estimate of -0.026763 (p=0.3892> 0.05). The study concluded that using large proportion of debt significantly influence the performance of pharmaceutical companies in Nigeria. The study recommends that firms should consider the mixture of equity and debt for better performance of the organization, since they are major determinants of corporate performance.