Al-Hikmah University Journal

This study examined the moderating role played by environmental dynamism on the relationship
between leverage and profitability in the Nigerian Information and Communication Technology
(ICT) sector. Seven out of the ten listed ICT companies on the Nigerian Stock Exchange were
analyzed. The study employed ex-post facto research design, using a data of 6 years period, between
2010 and 2015. The study used Multiple Regression Model as the technique of analysis using STATA
software version 13. The study revealed a negatively significant relationship between leverage and
return on investment (ROI) but a positive moderating effect of environmental dynamism on their
relationship. The study also revealed a positively significant relationship between leverage and return
on equity (ROE) but a negative moderating effect of environmental dynamism on the relationship. The
study concluded that environmental dynamism moderates the relationship between capital structure
and financial performance of the ICT companies listed in Nigeria. The study therefore recommended
that ICT companies should not blindly adopt leverage as a means of improving their financial
performance without giving due consideration to the environment within which they operate.