Governance Dynamics and Cost of Debt: Insights from Listed Companies in Nigeria
1 Department of Accounting Federal University Dutsin-Ma
* Corresponding author: iadamuadamu@fudutsinma.edu.ng
* Corresponding author: iadamuadamu@fudutsinma.edu.ng
Abstract
It is very vital for companies to efficiently manage its finances, which can come from either debt
or equity. This study investigates the effect of board and ownership structure on cost of debt on
listed industrial goods companies in Nigeria. Utilizing a longitudinal panel design, data were
collected from the annual reports and accounts of ten sampled firms listed on the Nigerian Stock
Exchange over nine years (2014-2022). The research employs multiple regression analysis to
examine the relationship between board attributes—such as board independence, board gender
diversity, and managerial ownership—and cost of debt. Findings reveal an insignificant
relationship between board independence and cost of debt, suggesting that the proportion of
independent directors on the board does not significantly influence borrowing costs for industrial
goods companies in Nigeria. However, board gender diversity and managerial ownership were
found to have a significant impact on cost of debt. The study concludes with recommendations for
enhancing board attributes and ownership structure to improve cost of debt, thereby contributing
to the broader discourse on corporate governance in the Nigerian industrial goods sector.
Keywords
Cost of debt
board independence
board gender diversity
Nigeria
How to Cite
Idris, A. A., Shawai, A. S., & Muhammad, M. M. (2025). Governance Dynamics and Cost of Debt: Insights from Listed Companies in Nigeria. Bayero Journal of Finance, 2(1), 81-96.
A. A. Idris, A. S. Shawai, and M. M. Muhammad, "Governance Dynamics and Cost of Debt: Insights from Listed Companies in Nigeria," Bayero Journal of Finance, vol. 2, no. 1, pp. 81-96, June 2025.