Corporate governance characteristics and cost of debt of quoted non-financial firms in Nigeria

Abstract

In this study, we made efforts to examine the impact which some corporate governance characteristics have on the cost of debt of selected manufacturing firms in Nigeria. The period which the study covers is from 2005 to 2020 of 76 firms the information about them is extracted from their financial statements. The results of the GMM regression reveal that institutional ownership, inventory-to-receivable as well as research and development expenses are positively and statistically significant with cost of debt; board size, board gender diversity, managerial ownership, foreign ownership, firm size, firm age and loss are negatively and statistically significant while leverage is insignificant. The study concludes with some recommendations. The implication of the study is that cost of debt is a double-edged sword which can either lead to a firm profitability or results in bankruptcy risk.