Effect of Listing Age on Corporate Financial Leverage of Oil and Gas Firms in Nigeria

Inyiama Oliver Ikechukwu; Ubesie Madubuko Cyril

doi:doi:10.11648/j.ijefm.20170502.12

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Effect of Listing Age on Corporate Financial Leverage of Oil and Gas Firms in Nigeria

Inyiama Oliver Ikechukwu, Ubesie Madubuko Cyril

Published in International Journal of Economics, Finance and Management Sciences (Volume 5, Issue 2)

Received: 17 August 2016 Accepted: 4 January 2017 Published: 26 January 2017

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Abstract

Examination of the effect of listing age on corporate financial leverage of oil and gas firms in Nigeria is the main objective of this study. The study also considers, for sake of robustness, the trend of movement of the variables, the relationships among the variables, as well as the causality of a variable by the other. This made the study a meta-analysis of the time series data. Simple regression was applied to estimate the effect of listing age on financial leverage of the selected firms. Correlation and Granger Causality Tests were applied to ascertain the relationships and causalities among the model variables. The outcome of the analysis is that firm’s Listing Age has a significant but negative effect on Financial Leverage, which implies that, as an oil firm advances in age, the firms’ need for external financing will tend to reduce. Causality test reveals that at a lagged period of one year, there is no causality running from financial leverage to firm age and vice versa. This implies that financial leverage is not caused by listing age of the oil and gas firm or otherwise. When the relationship between firm age and financial leverage was tested, the test reveals that financial leverage has an insignificant negative relationship with firm age in Nigeria Oil and Gas firms. The sustainability of theses outcomes over a long period of time was also tested using the Johansen Cointegration Test which indicates cointegrating equations which implies that short run effects and relationships are very sustainable, all things remaining the same. Therefore, firms are encouraged to borrow less as they advance in age. In conclusion, therefore, at maturity stage of the firm, external borrowing should be discouraged in preference to other sources of investible funds.

Published in	International Journal of Economics, Finance and Management Sciences (Volume 5, Issue 2)
DOI	10.11648/j.ijefm.20170502.12
Page(s)	92-97
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2017. Published by Science Publishing Group

Keywords

Leverage, Oil, Life Cycle, Gas, Age, Regression, Cointegration

References

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APA Style

Inyiama Oliver Ikechukwu, Ubesie Madubuko Cyril. (2017). Effect of Listing Age on Corporate Financial Leverage of Oil and Gas Firms in Nigeria. International Journal of Economics, Finance and Management Sciences, 5(2), 92-97. https://doi.org/10.11648/j.ijefm.20170502.12

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ACS Style

Inyiama Oliver Ikechukwu; Ubesie Madubuko Cyril. Effect of Listing Age on Corporate Financial Leverage of Oil and Gas Firms in Nigeria. Int. J. Econ. Finance Manag. Sci. 2017, 5(2), 92-97. doi: 10.11648/j.ijefm.20170502.12

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AMA Style

Inyiama Oliver Ikechukwu, Ubesie Madubuko Cyril. Effect of Listing Age on Corporate Financial Leverage of Oil and Gas Firms in Nigeria. Int J Econ Finance Manag Sci. 2017;5(2):92-97. doi: 10.11648/j.ijefm.20170502.12

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@article{10.11648/j.ijefm.20170502.12,
  author = {Inyiama Oliver Ikechukwu and Ubesie Madubuko Cyril},
  title = {Effect of Listing Age on Corporate Financial Leverage of Oil and Gas Firms in Nigeria},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {5},
  number = {2},
  pages = {92-97},
  doi = {10.11648/j.ijefm.20170502.12},
  url = {https://doi.org/10.11648/j.ijefm.20170502.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20170502.12},
  abstract = {Examination of the effect of listing age on corporate financial leverage of oil and gas firms in Nigeria is the main objective of this study. The study also considers, for sake of robustness, the trend of movement of the variables, the relationships among the variables, as well as the causality of a variable by the other. This made the study a meta-analysis of the time series data. Simple regression was applied to estimate the effect of listing age on financial leverage of the selected firms. Correlation and Granger Causality Tests were applied to ascertain the relationships and causalities among the model variables. The outcome of the analysis is that firm’s Listing Age has a significant but negative effect on Financial Leverage, which implies that, as an oil firm advances in age, the firms’ need for external financing will tend to reduce. Causality test reveals that at a lagged period of one year, there is no causality running from financial leverage to firm age and vice versa. This implies that financial leverage is not caused by listing age of the oil and gas firm or otherwise. When the relationship between firm age and financial leverage was tested, the test reveals that financial leverage has an insignificant negative relationship with firm age in Nigeria Oil and Gas firms. The sustainability of theses outcomes over a long period of time was also tested using the Johansen Cointegration Test which indicates cointegrating equations which implies that short run effects and relationships are very sustainable, all things remaining the same. Therefore, firms are encouraged to borrow less as they advance in age. In conclusion, therefore, at maturity stage of the firm, external borrowing should be discouraged in preference to other sources of investible funds.},
 year = {2017}
}

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TY  - JOUR
T1  - Effect of Listing Age on Corporate Financial Leverage of Oil and Gas Firms in Nigeria
AU  - Inyiama Oliver Ikechukwu
AU  - Ubesie Madubuko Cyril
Y1  - 2017/01/26
PY  - 2017
N1  - https://doi.org/10.11648/j.ijefm.20170502.12
DO  - 10.11648/j.ijefm.20170502.12
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 92
EP  - 97
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20170502.12
AB  - Examination of the effect of listing age on corporate financial leverage of oil and gas firms in Nigeria is the main objective of this study. The study also considers, for sake of robustness, the trend of movement of the variables, the relationships among the variables, as well as the causality of a variable by the other. This made the study a meta-analysis of the time series data. Simple regression was applied to estimate the effect of listing age on financial leverage of the selected firms. Correlation and Granger Causality Tests were applied to ascertain the relationships and causalities among the model variables. The outcome of the analysis is that firm’s Listing Age has a significant but negative effect on Financial Leverage, which implies that, as an oil firm advances in age, the firms’ need for external financing will tend to reduce. Causality test reveals that at a lagged period of one year, there is no causality running from financial leverage to firm age and vice versa. This implies that financial leverage is not caused by listing age of the oil and gas firm or otherwise. When the relationship between firm age and financial leverage was tested, the test reveals that financial leverage has an insignificant negative relationship with firm age in Nigeria Oil and Gas firms. The sustainability of theses outcomes over a long period of time was also tested using the Johansen Cointegration Test which indicates cointegrating equations which implies that short run effects and relationships are very sustainable, all things remaining the same. Therefore, firms are encouraged to borrow less as they advance in age. In conclusion, therefore, at maturity stage of the firm, external borrowing should be discouraged in preference to other sources of investible funds.
VL  - 5
IS  - 2
ER  -

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Author Information

Inyiama Oliver Ikechukwu

Department of Accountancy, Faculty of Management Sciences, Enugu State University of Science and Technology, Enugu, Nigeria
Ubesie Madubuko Cyril

Department of Accountancy, Faculty of Management Sciences, Enugu State University of Science and Technology, Enugu, Nigeria

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APA Style

Inyiama Oliver Ikechukwu, Ubesie Madubuko Cyril. (2017). Effect of Listing Age on Corporate Financial Leverage of Oil and Gas Firms in Nigeria. International Journal of Economics, Finance and Management Sciences, 5(2), 92-97. https://doi.org/10.11648/j.ijefm.20170502.12

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ACS Style

Inyiama Oliver Ikechukwu; Ubesie Madubuko Cyril. Effect of Listing Age on Corporate Financial Leverage of Oil and Gas Firms in Nigeria. Int. J. Econ. Finance Manag. Sci. 2017, 5(2), 92-97. doi: 10.11648/j.ijefm.20170502.12

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AMA Style

Inyiama Oliver Ikechukwu, Ubesie Madubuko Cyril. Effect of Listing Age on Corporate Financial Leverage of Oil and Gas Firms in Nigeria. Int J Econ Finance Manag Sci. 2017;5(2):92-97. doi: 10.11648/j.ijefm.20170502.12

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@article{10.11648/j.ijefm.20170502.12,
  author = {Inyiama Oliver Ikechukwu and Ubesie Madubuko Cyril},
  title = {Effect of Listing Age on Corporate Financial Leverage of Oil and Gas Firms in Nigeria},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {5},
  number = {2},
  pages = {92-97},
  doi = {10.11648/j.ijefm.20170502.12},
  url = {https://doi.org/10.11648/j.ijefm.20170502.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20170502.12},
  abstract = {Examination of the effect of listing age on corporate financial leverage of oil and gas firms in Nigeria is the main objective of this study. The study also considers, for sake of robustness, the trend of movement of the variables, the relationships among the variables, as well as the causality of a variable by the other. This made the study a meta-analysis of the time series data. Simple regression was applied to estimate the effect of listing age on financial leverage of the selected firms. Correlation and Granger Causality Tests were applied to ascertain the relationships and causalities among the model variables. The outcome of the analysis is that firm’s Listing Age has a significant but negative effect on Financial Leverage, which implies that, as an oil firm advances in age, the firms’ need for external financing will tend to reduce. Causality test reveals that at a lagged period of one year, there is no causality running from financial leverage to firm age and vice versa. This implies that financial leverage is not caused by listing age of the oil and gas firm or otherwise. When the relationship between firm age and financial leverage was tested, the test reveals that financial leverage has an insignificant negative relationship with firm age in Nigeria Oil and Gas firms. The sustainability of theses outcomes over a long period of time was also tested using the Johansen Cointegration Test which indicates cointegrating equations which implies that short run effects and relationships are very sustainable, all things remaining the same. Therefore, firms are encouraged to borrow less as they advance in age. In conclusion, therefore, at maturity stage of the firm, external borrowing should be discouraged in preference to other sources of investible funds.},
 year = {2017}
}

Copy | Download

TY  - JOUR
T1  - Effect of Listing Age on Corporate Financial Leverage of Oil and Gas Firms in Nigeria
AU  - Inyiama Oliver Ikechukwu
AU  - Ubesie Madubuko Cyril
Y1  - 2017/01/26
PY  - 2017
N1  - https://doi.org/10.11648/j.ijefm.20170502.12
DO  - 10.11648/j.ijefm.20170502.12
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 92
EP  - 97
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20170502.12
AB  - Examination of the effect of listing age on corporate financial leverage of oil and gas firms in Nigeria is the main objective of this study. The study also considers, for sake of robustness, the trend of movement of the variables, the relationships among the variables, as well as the causality of a variable by the other. This made the study a meta-analysis of the time series data. Simple regression was applied to estimate the effect of listing age on financial leverage of the selected firms. Correlation and Granger Causality Tests were applied to ascertain the relationships and causalities among the model variables. The outcome of the analysis is that firm’s Listing Age has a significant but negative effect on Financial Leverage, which implies that, as an oil firm advances in age, the firms’ need for external financing will tend to reduce. Causality test reveals that at a lagged period of one year, there is no causality running from financial leverage to firm age and vice versa. This implies that financial leverage is not caused by listing age of the oil and gas firm or otherwise. When the relationship between firm age and financial leverage was tested, the test reveals that financial leverage has an insignificant negative relationship with firm age in Nigeria Oil and Gas firms. The sustainability of theses outcomes over a long period of time was also tested using the Johansen Cointegration Test which indicates cointegrating equations which implies that short run effects and relationships are very sustainable, all things remaining the same. Therefore, firms are encouraged to borrow less as they advance in age. In conclusion, therefore, at maturity stage of the firm, external borrowing should be discouraged in preference to other sources of investible funds.
VL  - 5
IS  - 2
ER  -

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