Re-examining the determinants of capital structure in Nigeria

The paper investigates the determinants of capital structure and the speed of adjustment of capital structure decisions of Nigerian firms.,The paper adopts three methods: difference GMM, system GMM and stochastic frontier analysis (SFA).,The empirical results show that firms' efficiency affects the capital structure decisions of Nigerian firms. At the same time, short-term debt has a higher speed of adjustment in the context of Nigerian firms. The roles of other control variables are established in the paper.,Nigerian firms should adopt short-term debt in order to achieve their targeted debt levels. Managers of Nigerian firms are also advised to be more efficient in order to attract higher performance.,The paper is the first literature to measure the efficiency of firms using SFA method. Extant studies in the literature have neglected the determinant while four papers that adopt the determinant data envelope analysis (DEA) method. This is also the first study to document the speed of adjustment in capital structure decisions in the context of Nigerian firms.