CORPORATE GOVERNANCE, CAPITAL STRUCTURE AND FIRM VALUE: AN EMPIRICAL EVIDENCE.

MUSA USMAN KABIR

Abstract


The study examines the combined impact of corporate governance and the structure of corporate capital in creating organizational value. Corporate governance mechanisms such as foreign ownership, women on board and the size of the board together with the debt capital as a measure of capital structure on market value added (MVA) are investigated. The combined effect of corporate governance and capital structure presupposes the optimization of both concepts to enhance firm value. Hence, to create external value for corporate firms, the composition of the structure of capital in addition to corporate governance ultimately are expected to propel the market value of Nigerian manufacturing firms. The empirical result revealed the impact of foreign ownership, women on board and board size on the measure of firm value. Capital structure has no significant impact on firm value.  The satisfaction of stakeholders is derivable from the external value created by the firm for owners and other relevant stakeholders. The underpinning theories of the study in this paper highlighted the stakeholder’s theory and trade-off theory.


Keywords


Corporate Governance, Capital Structure, Stakeholder’s Theory, Trade-Off Theory, Firm Value

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