CAPITAL STRUCTURE, COMPETITION AND FIRM PERFORMANCE: EVIDENCE FROM NONFINANCIAL COMPANIES IN NIGERIA
This paper investigates the interaction between capital structure and firm competition on the performance of firms in Nigeria. The study uses two distinct measures of competition, the Herfindahl-Hirschman Index (HHI) and Boone indicator (BI), the impact of competition on leverage-performance relationship is examined. A panel of 63 Nigerian listed firms over the period 2001-2010 is used for the empirical analysis.The results indicate that financial leverage, used as a measure of capital structure, has significant positive effect on firm performance. It also reveals that product market competition in Nigeria enhances the performance effect of leverage.