Effect of Product Diversification on Capital Structure of Manufacturing Companies in Nigerian: Foods/Beverages and Conglomerate Sectors in Perspective

This study examines the effect of Product Diversification on capital structure in the foods/beverages and conglomerate sectors of the manufacturing companies in Nigeria. The main objective of the study is to analyze within the Nigerian context the effect of product diversification on capital structure. The data used for this study was obtained from the published annual reports of the sampled manufacturing companies. A simple random sampling technique was employed in selecting the Nigerian manufacturing companies into the sample. Both Random effect and Wald mode fixed effect regression method were used to test the formulated hypotheses which revealed that product diversification is negatively and insignificantly related to capital structure. The study recommended that factors such as total asset size, profitability and exchange rate exposure that are relevant to the companies’ capital structure decisions should be properly analyzed and balanced and that the companies should seek more investment in product diversification in order to enhance profitability without having negative effect on capital structure