DEBT FINANCING AND ENVIRONMENTAL RESEARCH AND DEVELOPMENT DISCLOSURE OF LISTED OIL AND GAS FIRMS IN NIGERIA
Keywords:
Debt-to-Assets Ratio, Debt-to-Capital Ratio, Financial Mix, Research and DevelopmentAbstract
This study examined the effect of debt financing on environmental research and development disclosure of listed oil and gas firms in Nigeria for a period of eleven (11) years covering from 2012-2022. Specifically, this study ascertained the effect of debt to equity ratio, debt to asset ratio, debt to capital ratio, short term debt ratio and long term debt ratio on environmental remediation disclosure. Panel data were used in this study, which were obtained from the annual reports and accounts of nine (9) sampled listed oil and gas firms for the periods 2012-2022. Ex-Post Facto research design was employed. Inferential statistics using Pearson correlation coefficient and Panel Least Square (PLS) regression analysis were applied to test the hypotheses of the study. This study revealed that Debt to equity ratio has a significant but negative effect on environmental research and development disclosure (β1 = -0.028870; p-value = 0.0000); debt to asset ratio has a significant but negative effect on environmental research and development disclosure (β2 = -0.639728; p-value = 0.0004); debt to capital ratio has a significant but negative effect on environmental research and development disclosure (β3 = -0.035584; p-value = 0.0000). In conclusion, the study upholds that debt finance significantly affects environmental research and development disclosure of listed Oil and Gas firms in Nigeria at 5% level of significance. It was recommended amongst others that firms should lever on the amount of debt they undertake to finance their undertakings, as it enhances firms’ bottom line. Also, that firms should operate with a capital structure mix that would minimize the cost of capital and reducing the reputational risks associated with the company's operations.
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