Author(s): Sanni, Micheal Rotimi, Joshua Abimbola Abosede, Tomomewo Amos Olafusi, Adepoju, Ajayi Fidelis, Ogundele Omobolade
Capital structure is the mixture of equity and debt used to finance investments while corporate investment strategy involves the selection of appropriate investments that will add to the value of an organisation on the long run. This study examined the relationship between corporate investment strategy and capital structure of selected listed oil and gas companies in Nigeria. Oil and gas industry was selected because of the huge investments involved in it and its contribution to the Nigerian economy. Corporate investment strategy was proxy with total investments while capital structure was proxy with Equity Finance (EQF), Debt Finance (DEF), Debt to Equity (DTE) and Leverage (LEV) in line with existing works. The panel data used were sourced from published financial statements of the companies for the period under study. The Hausman test conducted confirmed fixed effect model as most appropriate for the study. Findings are mixed. Both Equity Finance (EQF) and Debt Finance (DEF) have negative but significant relationship with corporate investment strategy. Debt to Equity (DTE) has a negative but not significant relationship. The positive relationship of Leverage (LEV) is not significant. While the findings confirm existing works, they negate others. The study concludes that the direction of the relationship and the significance depend on the attitude of managers who are expected to act in the best interest of shareholders. The study therefore recommends that corporate investments should be properly evaluated and funded with appropriate source in order to enhance the value to the firms.