Research Article

Governance Dynamics and Cost of Debt: Insights from Listed Companies in Nigeria

Adamu Adamu Idris1*, Aliyu Sani Shawai1, Musa Musa Muhammad1
1 Department of Accounting Federal University Dutsin-Ma
* Corresponding author: iadamuadamu@fudutsinma.edu.ng
Published: Jun, 2025
DOI: 10.67894/bjf.2025.vaqoy1ak
Pages: 81-96
Views: 16
Downloads: 5

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

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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 University Journal of Finance, 2(1), 81-96. https://doi.org/10.67894/bjf.2025.vaqoy1ak

A. A. Idris, A. S. Shawai, and M. M. Muhammad, "Governance Dynamics and Cost of Debt: Insights from Listed Companies in Nigeria," Bayero University Journal of Finance, vol. 2, no. 1, pp. 81-96, June 2025. doi: 10.67894/bjf.2025.vaqoy1ak

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