DETERMINANTS OF CAPITAL STRUCTURE IN THE NIGERIAN LISTED INSURANCE FIRMS

The paper investigates the determinants of capital structure in Nigerian listed insurance firms using data obtained from annual report of the sampled firms for the period 2001-2010. We used five explanatory variables to measure their effects on debt ratio. Multiple regression is employed as tool of analysis. The result reveals that all the explanatory variables have statistically and significantly influenced the explained variable. The results approve the prediction of pecking order theory in the case of profitability and trade-off theory in case of tangibility variables. The growth variable supports the agency theory hypothesis whereas size variable confirms to the asymmetry of information theory. It is therefore recommended that the management of listed insurance firms in Nigeria should always consider their position using these capital structure determinants as important inputs before embarking on debt financing decision.