Investigating the Moderating Effect of Firm Age on the Relationship between Capital Structure and Financial Performance of Listed Oil and Gas Firms in Nigeria
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Abstract
This study looked at the moderating effect of company age on the connection between capital structure and financial performance in ten (10) oil and gas businesses listed on the Nigerian Exchange Group from 2013 to 2022. Short-term and long-term debt proxied capital structure; Return on Assets proxied financial performance; and company age acted as a moderator. The study used an ex post facto research design and inferential statistics. Diagnostic tests were used to assess the robustness of the random effect models used in the regression. On the one hand, primary findings revealed that short-term debt has a negative insignificant effect on return on assets, while both long-term debt and firm age have a negative significant effect on return on assets; on the other hand, secondary findings revealed that Moderated-Short-term-debt maintained negative insignificant effects on return on assets, while Moderated-long-term-debt has a positive significant effect on return on assets, but the R-squared had changed, indicating the moderating effect of firms age. Based on the data, this study concluded that firm age moderated capital structure, hence improving financial performance. As a result, this study concluded that investors and management should be aware of the firm's age as a factor that can improve the financial performance of Nigerian oil and gas enterprises.
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