METHODOLOGY
The study used the entire population of 16 deposit money banks. Data were collected (2011- 2015) from the annual accounts and report of these banks. Partial Least Square’s (PLS) Structural Equation Model was used for the analysis of the data collected. Using the PLS-SEM, two broad techniques of data analysis were used to analyse the data generated for the study. These are the analysis of the measurement model and structural model.
SEM is used to find the simultaneous relationship between the variables of this study. SEM technique allows researchers to examine series of relationships simultaneously. It attempts to minimize between the sample covariance and the reproduces covariance matrix of observed measures. That’s why it follows the assumptions of normality and independence. Partial Least Square is as a non-parametric SEM technique described as second generation multivariate analysis (Fornell, 1987). It is useful when theoretical knowledge is scarce and theory confirmation is the objective. It is quit suitable for this study because in this study the authors’ objective is to confirm the newly proposed relationship by extended VAIC and capital structure with financial performance.
The quantitative variables of the study are expressed in terms of latent and exogenous constructs as appeared on the table below: