Firm growth, Size, dividend Policy and Financing Choices of Nigerian Non-Financial Firms

Firms financing choices has remained perpetually an object of debate in both corporate and academic discussion. This study examines the how firm growth, size and dividend policy which are rarely jointly investigated in empirical analysis of financing choices of Nigerian firms. This study also argues that firm leverage should emphasize capitalization rather than short term financing and thus measured leverage as long term debt to equity ratio. The study employed panel data obtained from the annual reports and financial statements of a sample of 20 nonfinancial firms quoted on the Nigerian Exchange from 2016 to 2021. The results revealed that the average debt-equity ratio of the firms was 51:49 with a coefficient of variation of 0.3647 suggesting minimal dispersion among the firms' debt ratios. The random effect regression model adopted for the study showed that firm size, growth, asset tangibility, firm age and return on assets are positively related to debt-equity ratio. Conversely, dividend policy and return on equity are negatively related to debt-ratio. However, only return on assets and return on equity are significantly related to the firms' financing choices. The study concluded that firm size, growth, dividend policy are not the key drivers of financing choices of Nigerian non-financial firms but their level of profitability.