Nigerian Journal of Banking and Financial Issues (NJBFI)

CAPITAL STRUCTURE, CORPORATE GOVERNANCE AND COST EFFICIENCY IN SELECTED LISTED INSURANCE FIRMS IN NIGERIA

Abstract

The study examined the capital structure's effect on the listed insurance organizations as well as the cost effectiveness of a sample of Nigerian insurance firms that were publicly traded. Additionally, it assessed the impact of corporate governance on the selected listed insurance institutions in Nigeria while taking cost effectiveness and capital structure into consideration. Between 2005 and 2020, the post-consolidation period and the time the nation was impacted by the infamous corona virus that shook the entire world, they were with the intention of providing information on the interactions between capital structure, corporate governance, and cost efficiency in a number of Nigerian insurance organizations. This study's goal is to investigate the capital structure, corporate governance, and cost effectiveness of a sample of Nigeria's listed insurance institutions. The study used a descriptive survey design and secondary data from 10 listed insurance firms in Nigeria. Stochastic Frontier Analysis (SFA) was used to test the data. Business governance factors including board size (t= 2.285, p < 0.05) and board expertise (t=-2.311, p< 0.05) have a substantial impact on the capital structure. The results also showed that variables that worked as mediators between corporate governance and cost effectiveness, such as board size (t=-2.807, p < 0.05), board independence, and board composition, were both statistically significant at the 5% level. The findings of the investigation showed a strong correlation between capital structure, corporate governance, and cost effectiveness.