Internationalization Strategy and Profitability of Nigerian Based Multinational Corporations

Abstract

This research investigates how internationalization strategies relate to the profitability of multinational corporations (MNCs) within the Nigerian context. Utilizing a sample of 9 MNCs listed on the Nigerian Exchange Group (NGX) spanning an 12-year period (2011-2022), the study delves into the effects of internationalization strategies on key performance indicators. Secondary data from audited financial statements of these MNCs were collected for the years 2012 to 2022. Panel data models, incorporating indirect Export (IEX), direct export (DEX), and foreign ownership (FOW), were employed to assess the relationship between internationalization strategy and profitability. Descriptive statistics and panel regression techniques, including Ordinary Least Squares and Fixed Effects Models, were applied to estimate these relationships. The study specifically examined the revenue growth (REG), return on assets (ROA), and return on investment (ROI) as dependent variables, with IEX, DEX, and FOW as the independent variables. Its aim is to decode how internationalization strategies influence indirect export, direct export, and foreign ownership. The findings contribute to a nuanced understanding of the performance dynamics of MNCs operating in Nigeria, providing insights into how strategic decisions shape their overall performance.