INFLUENCE OF CAPITAL STRUCTURE ON THE OPERATIONAL PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA
ABSTRACT
This research seeks to examine the influence of Capital Structure on the Performance of deposit-money banks in Nigeria. The study spanned from 2000 to 2016, which is a seventeen-year study. The independent variables used for the study are Bonds, Preference Shares, Ordinary shares, and debt, while the dependent variable is the aggregate Profit after Tax of all Deposit Money Banks in Nigeria. The time series data used were sourced from the CBN Statistical Bulletin 2016. The study applied the E-view 7.0 version, and the estimation techniques applied were Ordinary Least Squares (OLS), Diagnostic Test, Serial Correlation Test, Stability Test, Granger Causality, and Johansen Co-integration Test. The result revealed that the whole independent variables have a 99% positive impact on the profit after tax of Deposit Money Banks in Nigeria; more so, the adjusted R2 is 0.98, which suggests that 98% of the independent variables could be explained by the changes in the dependent variable, and the remaining 2% could not be explained due to some error in the financial system. The Durbin-Watson test is 2.155, which revealed no presence of Serial Correlation and is moderate for prediction. The p-value of the F-stat is 0.000 < 0.05. We reject H0 and conclude that Capital Structure has a significant impact on the Performance of Deposit Money Banks in Nigeria.
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