MODERATING EFFECT OF BOARD INDEPENDENCE ON THE RELATIONSHIP BETWEEN CAPITAL STRUCTURE AND ..

Due to the lack of consensus on the relationship between capital structure and profitability around the world, a moderating variable must be considered to reinforce the relationship. As a result, this study uses board independence as a moderator to look at how it affects the relationship between capital structure and profitability in Nigerian listed industrial goods companies from 2006 to 2018. The study's population consists of all twentyone (21) industrial goods companies listed on the Nigerian Stock Exchange (NSE) as ofDecember 2018. The sample for the analysis is made up of ten (10) firms. The research used recorded data from the sampled companies' annual reports and accounts. The data was first analysed using descriptive statistics to generate summary statistics for the variables. Following that, a correlation study was performed using the Pearson correlation technique to determine the correlation between the dependent and independent variables, as well as the OLS regression technique. The findings revealed that debt to equity ratio, a capital structure proxy, has a significant positive impact on profitability, while board independence has a significant negative impact on the relationship between capital structure and profitability of publicly traded industrial goods firms. Nigeria is a country where Based on these results, the study suggests that policymakersand management of industrial goods firms determine the optimum capital structure while also adhering to the code of corporate governance to ensure a perfect balance of board independence, as certain companies do not adhere to the 50 percent mixture of executive and non-executive directors in the governing board.

Please see the link - https://ikprress.org/index.php/JET/article/view/5764