• S. O. KAJOLA Department of Accounting, Federal University of Agriculture, Abeokuta, Nigeria
  • K. H. APELOGUN Department of Banking and Finance, Federal University of Agriculture, Abeokuta, Nigeria
  • O. O. OWORU Department of Accounting, Federal University of Agriculture, Abeokuta, Nigeria
Keywords: Managerial ownership, Agency cost, Capital structure, Leverage, Pecking order


The paper examined the relationship between managerial share ownership and leverage of 35 non-financial firms listed on the floor of the Nigerian Stock Exchange. The study covered the period 2005-2014. Using panel data regression analysis and fixed effects model (with least squares as an estimation technique), result revealed a positive and significant relationship between leverage and managerial share ownership. This suggested that managerial share ownership, an important internal corporate governance mechanism, played an important role in a company’s capital structure decision. The outcome of this study was supported by some prior empirical studies and provided evidence of alignment of the interests of management and shareholders as proposed by the Agency theory. It is recommended that Nigerian companies should encourage management to own shares in companies where they serve as directors as this will reduce managerial incentives to consume perquisites and expropriation of shareholders’ wealth or investing in unprofitable projects. 





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