Title:
TRADE-OFF VARIABLES AND CORPORATE VALUE: A MULTI-DIMENSIONAL PANEL DATA STUDY OF QUOTED SMALL AND MEDIUM SCALE ENTERPRISES FROM NIGERIA

Authors:
Dr. UZOKWE Grace Onyinyechi and ONUABI, Evans Jared

Abstract:
This study examined the relationship between trade off variables and net book value of quoted small and medium scale enterprises in Nigeria. Secondary data were obtained from financial statement of 10 quoted small and medium scale enterprises from 2009 – 2018. Net book value was modeled as the function of, non-tax shield, business risk and tangibility. Panel data methods were employed while the fixed and random effects models were used as estimation technique at 5% level of significance. Fixed effects, random effects and pooled estimates were tested while the Hausman test was used to determine the best fit. Panel unit roots and panel cointegration analysis were conducted on the study. The result from found that 54.2 percent, percent variations in the net book value of the quoted small and medium scale enterprises, the coefficient of business risk has a positive coefficient and not significant to influence net book value, non-tax shied have positive and not significant to impact on net book value while the tangibility have negative and significant to impact on net book value of the quoted small and medium scale enterprises. From the findings, the study concludes that there is no significant relationship between non-tax shield and net book value of quoted small and medium scale enterprises in Nigeria. That there is no significant relationship between business risk and net book value of small and medium scale enterprises value in Nigeria. That there is significant relationship between tangibility and net book value of quoted small and medium scale enterprises in Nigeria. We recommend that management of the quoted small and medium scale enterprises should set a target debt level that will maximize value and should strive not to go beyond such levels in order to maximize their value as reflected in the high positive impact of debt capital on the small and medium scale enterprises. The small and medium scale enterprises should take advantage of debt’s tax deductibility nature as a debt capital while starting up which will boost their accounting performance and by extension, their market value.

Keywords:
Trade-Off Variables, Corporate Value, Panel Data Study, Quoted Small and Medium Scale Enterprises, Nigeria