Implications of Pecking Order Approach on the Profitability of Quoted Agricultural Firms in Nigeria

Authors

  • S. A. Effiong Department of Accounting, Faculty of Management Sciences, University of Calabar, Calabar, Cross River State, Nigeria
  • W. S. Inyang Department of Accounting, Faculty of Management Sciences, University of Calabar, Calabar, Cross River State, Nigeria
  • A. H. Akum Department of Accounting, Faculty of Management Sciences, University of Calabar, Calabar, Cross River State, Nigeria
  • C. O. Asuquo Department of Accounting, Faculty of Management Sciences, University of Calabar, Calabar, Cross River State, Nigeria
  • U. R. Onyeogaziri Department of Accounting, Faculty of Management Sciences, University of Calabar, Calabar, Cross River State, Nigeria

Keywords:

Capital structure, Pecking Order Approach, Profitability, Quoted Agricultural Firms

Abstract

This study examines the extent to which Pecking Order Approach (Financial
Structure) affects the Profitability of quoted agricultural firms in Nigeria. To
determine the association between Pecking Order and Profitability, data
are obtained from the audited financial statements of the agricultural
companies listed on the Nigerian Stock Exchange. Panel Data method is
applied using regression analysis to examine the level of relationship that
exists between Pecking Order and Profitability of the listed agricultural
firms in Nigeria between 2011 and 2016. The result obtained shows that
sources of finance when looked at holistically have a major influence on
profitability of agricultural companies in Nigeria. However, when looked at
individually, finance sources do not have any significant effect on the
profitability of agricultural firms in Nigeria. This is so because other factors
such as interest expense influence the Pecking Order Model. The capital
structure of a firm impacts its profitability greatly; therefore, capital structure
decisions must be evaluated thoroughly.

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Published

2018-04-01

How to Cite

Effiong, S. A., Inyang, W. S., Akum, A. H., Asuquo, C. O., & Onyeogaziri, U. R. (2018). Implications of Pecking Order Approach on the Profitability of Quoted Agricultural Firms in Nigeria. International Journal of Economic Development Research and Investment (IJEDRI), 9(1), 51–60. Retrieved from http://icidr.org.ng/index.php/Ijedri/article/view/923

Issue

Vol. 9 No. 1

Section

Articles