Effect of Corporate Governance on Borrowing Cost of Quoted Brewery Firms in Nigeria (2010-2015)

EPH - International Journal of Business & Management Science, Vol. 2(3), p. 31-57, March 2017

27 Pages Posted: 12 Jun 2017

See all articles by Nestor Amahalu

Nestor Amahalu

Nnamdi Azikiwe University - Department of Accountancy

Mary-Fidelis Chidoziem Abiahu

Nnamdi Azikiwe University - Department of Accountancy

Chike Nweze

Nnamdi Azikiwe University - Department of Accountancy

Obi Chinyere

University of Nigeria Enugu Campus

Date Written: May 29, 2017

Abstract

The main objective of this study is to ascertain the determinants of audit quality in Nigeria. The specific objectives are to ascertain the effect or otherwise of Board size, ownership concentration and Board independence on borrowing cost of brewery firms listed on the floor of Nigeria Stock Exchange from 2010-2015. Ex-post fact research design was used for this study. Secondary data were sourced from the publications of Nigeria stock exchange. Inferential statistics of the hypotheses were carried out with the aid of E-view 9.0 statistical software using co-efficient of correlation and ordinary least square (OLS) regression. In a bid to determining the validity of the data used Granger causality test was used. Findings of this study shows that Board size, ownership concentration and Board independence have a positive and statistically significant effect on borrowing cost at 5% significance level. It is recommended among others that there should be an increase in board independence since it significantly decreases a firm’s cost of capital and increases firm’s valuation.

Keywords: Corporate Governance, Borrowing Cost, Cost of Capital

JEL Classification: G21, G32, M40, M41, M51

Suggested Citation

Amahalu, Nestor and Abiahu, Mary-Fidelis Chidoziem and Nweze, Chike and Obi, Juliet, Effect of Corporate Governance on Borrowing Cost of Quoted Brewery Firms in Nigeria (2010-2015) (May 29, 2017). EPH - International Journal of Business & Management Science, Vol. 2(3), p. 31-57, March 2017. Available at SSRN: https://ssrn.com/abstract=2976453

Nestor Amahalu (Contact Author)

Nnamdi Azikiwe University - Department of Accountancy ( email )

Awka, Anambra 23400
Nigeria
+2348063393668 (Phone)

Mary-Fidelis Chidoziem Abiahu

Nnamdi Azikiwe University - Department of Accountancy ( email )

Awka, Anambra 23400
Nigeria

Chike Nweze

Nnamdi Azikiwe University - Department of Accountancy ( email )

Awka, Anambra 23400
Nigeria

Juliet Obi

University of Nigeria Enugu Campus ( email )

Department of Accountancy
Box 15540, Enugu
Enugu, NC Enugu 234
Nigeria

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