Influence of Macroeconomic Variables on Capital Structure Decision of Manufacturing Companies in Nigeria

Tvariables and stock market development on the capital structure decisions of manufacturing companies in Nigeria for the period from 1998 to 2013. The study was conducted under three independent periods the same period, one quarter after and one year after the announcement of the macroeconomic variables. Data from sample of 40 manufacturing companies quoted in the Nigeria Stock Exchange were analyzed using descriptive statistics and Newey and West (1987) standard error. The findings indicate that changes in gross domestic product (GDP) significantly influence capital structure decision of manufacturing companies in Nigeria only in the quarter after the announcement of the GDP figure, while interest rate, inflation and stock market development did not support capital structure decision making by manufacturing companies in Nigeria in all the three periods. This support the salient notion that there is actually a marginal delay in the adaptation of GDP as determinant for financing decision making. The study recommends that, those in charge of making such decisions should monitor and follow the trend of GDP and probably other monetary policies of the Federal Government and regulatory authority that affects GDP in their decision making. Government should also initiate policies that will discourage manufacturing company from over dependence on equity but encourage the use of long term debts that could guarantee growth in the real sector