THE EFFECT OF CORPORATE TAXATION ON THE FINANCING DECISIONS LISTED COMPANIES IN THE NIGERIAN FOOD AND BEVERAGES INDUSTRY

This paper examines the effect of corporate taxation on the financing decisions of listed companies in the Nigerian Food and Beverages industry. Data for the study was collected from documentary sources consisting of the annual reports and accounts of the sampled companies. Time series, cross-sectional and Panel data methodology was adopted for data analysis. The Ordinaiy least squares, fixed effects and Random effects were used to estimate the regression model. It is found that in spite of the tax benefits of debt, the companies were generally low-geared; however, corporate taxation influences their financing decisions. The findings of this study lend weight to both the pecking-order and trade-off models as fitting description of capital structure behavior of the companies. The study recommends that the companies should not over rely on their retained earnings as a source of finance, but to ' explore other external sources, particularly the use of debt in order to benefit from its tax advantage.