E. Chuke  Nwude, Idam Okpara  Itiri, Sergius Nwannebuike  Udeh, 
    Financial Structure of Nigerian Quoted Firms: A Test of Agency Cost Theory,
    International Business Management,
    Volume 10,Issue 20,
    2016,
    Pages 4974-4987,
    ISSN 1993-5250,
    ibm.2016.4974.4987,
    (https://makhillpublications.co/view-article.php?doi=ibm.2016.4974.4987)
    Abstract: This study examines financial structure on the perceptive of agency cost theory in order to ascertain its impact on the maximization of shareholders’ earnings. A total of 43 non-financial firms over a 12 year period (2001-2012) were randomly selected for the study. The panel data were subjected to pool ordinary least square, fixed effects and random effects regression model to test the hypotheses of the study. The results show that there is a negative and significant impact of financial structure (proxied by total term ratio, long term debt ratio and short term debt ratio) on return on asset. The employment of return on equity as alternative measure of firm performance depicted the implication of asset substitution effect as noted by agency cost theory. The study therefore concludes that debt is valuable in reducing the agency costs of equity in professionally managed firm but at the same time debt is costly as it increase the agency cost of debt.
    Keywords: Employment;significant;performance;valuable;agency