Dynamism, Environmental contingencies, Macro, Micro contingencies, Interdependency


Going concerns of business empires is predicated on the externality effect of environmental contingencies that influence the decisions of capital users. And the capability of capital users to circumnavigate both macro and micro environmental contingencies which cumulate to shareholders’ wealth maximization is crucial. Hence, the study aims of dissecting effect of macro and micro environmental contingences on the capital structure and firm performance. Generalized Method Moment (GMM) statistical tool is used to dissect perceived association amidst endogenous and exogenous variables. The results show that micro contingences such debt to equity, debt to assets and short-term liability have negative and statistically significant on firm performance and long-term debt to equity has positive and statistically significant influence on the firm performance. On the other side macro contingences such as lending interest rate, foreign exchange rate, and gross domestic products have negative and statistically influence on the performance of the firm while, inflation rate, foreign direct investment and fuel importation have positive and statistically impact of the performance. The dynamism of result also reveals of short run and long run consequence. Therefore, the study concludes due to mutuality or interdependency of both micro and macro environmental contingencies, they have impacted on the capital structure and performance of listed companies under the purview of this study. This shows that capital managers are not insusceptible by their controllability and capability of micro contingencies (capital structure/ internal forces) but, rather the macro/external contingencies have inroad to impacted the micro /internal forces directly or indirectly.