CORPORATE LIFE CYCLE AND FINANCIAL PERFORMANCE: AN EMPIRICAL EVIDENCE ON LISTED INDUSTRIAL GOODS FIRMS IN NIGERIA

Abstract

The study examined the effect of corporate life cycle on financial performance of listed industrial goods firms in Nigeria. Corporate life cycle was proxy with; firm introductory stage (FINT), firm growth stage (FGRT), firm maturity stage (FMAT), firm shakeout stage (FSHK) and firm decline stage (FDEC) while financial performance was proxy using net assets per share. Ex Post Facto Design was adopted and data for the study were collected from the annual reports and accounts of the listed industrial goods firms in Nigeria for the period ended 2017-2021. Panel least squares model was used in the data analysis and the findings of the study indicate that there is a significant and positive relationship between firm growth stage, firm maturity stage, firm shakeout stage and financial performance of industrial goods firms in Nigeria at 1% significant level while firm introductory stage and firm decline stage have insignificant relationship with financial performance. Thus, the study concludes that corporate life cycle ensures financial performance of listed industrial goods firms in Nigeria. The study recommends that managers should have a focus on board monitoring and financial management accordingly and especially during maturity stage so as to avoid slipping into the next stage, which is restructuring stage or decline stage.