Abstract
Financial performance which results from the right combination of the sustainable conducive business environment, optimal utilisation of corporate human and capital resources and multinationality of operations by a competent management team, could be restricted due to challenges such as infrastructural deficits and inconsequential regulations. The business landscape in Nigeria is characterised by complexities related macroeconomic uncertainties and vulnerabilities predominant in the Nigerian economy. Multinational manufacturing companies are subjected to challenges which hinder financial performance such as unnecessary harsh conditions. Hence, the effect of multinationality on the financial performance of multinational manufacturing companies operating in Nigeria was examined in this study. An expo-facto research design was adopted as methodology for the study. A population of 22 Nigerian multinational manufacturing companies was selected. Eighteen companies, representing 80% of the population were purposively selected and observed for a period of 20 years. Secondary data were extracted from the audited financial statements of the selected manufacturing companies during the period under consideration. The data were analysed using descriptive statistics and inferential panel analysis. Findings revealed that multinationality exhibits a positive significant effect on the financial performance of multinational manufacturing companies in Nigeria. It is recommended that policymakers create enabling legal and regulatory framework that will ease business operations. Also, infrastructural investment should be provided to reduce the cost of running a business in Nigeria.
Highlights
The challenges militating against good financial performance of multinational manufacturing companies and the assessment of corporate strategies have witnessed fundamental changes in literature far beyond book values [1]
The management of multinationals despite their expertise, have no control over exogenous factors that have undermined some genuine efforts, these have a significant impact on the financial performance of the multinational manufacturing companies in Nigeria; making financial performance more complicated and problematic
The model revealed that the inflation rate had a positively significant effect on Tobin’s Q of multinational manufacturing companies listed on the Nigerian Stock Exchange and this result is consistent with prior studies [42, 37, 41, 27, 22]
Summary
The challenges militating against good financial performance of multinational manufacturing companies and the assessment of corporate strategies have witnessed fundamental changes in literature far beyond book values [1]. A consideration of comprehensive integration and inadequate overlap among financial performance drivers, and the declining comparative competitive advantage in the industry where the multinational manufacturing companies operate are significantly unsettling [2]. The determinants of financial performance among corporate organisations have fundamental defaults and complexities, as multidimensional stock price and the purchase price of the stock of multinational corporations can be influenced by endogenous and exogenous factors [3]. Some financial performance reports of the Universal Journal of Accounting and Finance 10(2): 538-548, 2022 multinational companies in Nigeria are usually exaggerated. The management of multinationals despite their expertise, have no control over exogenous factors that have undermined some genuine efforts, these have a significant impact on the financial performance of the multinational manufacturing companies in Nigeria; making financial performance more complicated and problematic. Stringent operating conditions abound in a harsh business environment in the midst of regulatory lapses and inefficiencies [6]
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