IMPACT OF CAPITAL STRUCTURE ON THE PERFORMANCE OF QUOTED INSURANCE FIRMS IN NIGERIA

Evidence from the past studies revealed that capital structure has an impact on the firm performance. This research appraises the impact of capital structure on the performance of quoted life insurance companies in Nigeria from 2010 to 2019. The researchers used the panel cointegration model, autoregressive dynamic lag error correction model and pair wise granger causality test to measure the relationship among the variables. The study revealed that capital structure and firm performance has a long-run relationshipand 81% long run disequilibrium is corrected within a year. It was also apparent that there is a significant short run relationship between liquidity of life insurance and return on asset. The Granger causality outcome also shows that bidirectional causality exists between firm size (SIZE) and profitability (ROA) in the short run. We conclude that a large size of life insurance firm has more scope to make more profit in Nigeria context within the study period. The study recommended that to maximize firm’s performance managers must endeavor to obtain and maintain an optimum capital structure level among others.