Publication Details
Abstract
Purpose: This study investigates the role of equity financing in enhancing firm resilience during economic shocks, with specific focus on Nigerian firms during the COVID-19 pandemic. It examines how equity capital structure (ECS), access to external equity markets (EEM), and internal equity reserves (IER) influence firms' operational continuity and financial stability amid crisis.
Methodology: An ex-post facto research design was employed, utilizing secondary data sourced from 65 firms listed on the Nigerian Stock Exchange (NSE) over a 10-year period (2011–2021). Data were extracted from NSE Factbooks and analyzed using descriptive statistics, Pearson correlation, and multiple regression analysis via E-Views 9.0 software. Structural Equation Modeling (SEM) was conducted to validate model fit and causal relationships among constructs. Reliability and validity of constructs were verified using Cronbach’s Alpha, composite reliability (CR), and Average Variance Extracted (AVE), ensuring robustness and credibility of findings. The study hypotheses were tested to assess the influence of each equity financing dimension on firm resilience during the pandemic period.
Findings: The results revealed significant positive relationships between all three dimensions of equity financing and firm resilience. ECS had the strongest effect, followed by IER and EEM. SEM model fit indices (CFI = 0.962, RMSEA = 0.041) confirmed a well-fitting structural model, validating the proposed theoretical framework. These findings suggest that a strong equity base enhances resilience, allowing firms to withstand and adapt to economic disruptions.
Originality/Value: This study provides empirical evidence from an emerging market context, highlighting the importance of equity-based strategies for crisis resilience, with practical implications for policy and corporate finance planning.