Performance Of Firms In Nigeria Research Articles

The Role of Financial Constraints in Shaping Non-Financial Firm Performance in Nigeria: Evidence from the KZ Index

This study examines the impact of financial constraints on the performance of non-financial firms in Nigeria, utilizing the KZ index as a measure of financial constraint. Employing a static panel regression estimation on a sample of 87 non-financial companies listed on the Nigerian Stock Exchange from 2016 to 2021, the study investigates the relationship between financial constraints and firm performance. The findings reveal that financial constraints significantly hinder firm performance, highlighting the importance of effective governance and access to external financing. The study contributes to the literature by providing insights into the financial challenges faced by non-financial firms in Nigeria and offers recommendations for policymakers and practitioners to improve corporate performance.

Impact of Digitalization on Firm Performance in the Manufacturing Sector: A Case Study of Nigeria

Purpose: The aim of the study was to investigate the impact of digitalization on firm performance in the manufacturing sector: a case study of Nigeria. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: Digitalization has significantly impacted firm performance in Nigeria's manufacturing sector. It has enhanced operational efficiency, improved decision-making processes, and spurred innovation within firms. By embracing digital transformation, Nigerian manufacturing companies have bolstered their competitiveness and market positioning. Ongoing investment in digital capabilities is crucial for sustaining growth and success in the sector. Unique Contribution to Theory, Practice and Policy: Resource-based view (RBV) theory, technology acceptance model (TAM) & institutional theory may be used to anchor future studies on the impact of digitalization on firm performance in the manufacturing sector: a case study of Nigeria. Nigerian manufacturing firms should prioritize investment in digital infrastructure, talent development, and organizational culture conducive to digital innovation. Policymakers should enact supportive regulatory frameworks and incentives to encourage digitalization adoption among manufacturing firms in Nigeria.

Empirical Study of the Effect of Sustainability Accounting Disclosures on Financial Performance of Brewery Firms in Nigeria: Evidence from Nigerian Breweries PLC

The main motivation of this study stemmed from the dearth of empirical evidence of the effect of sustainability accounting disclosure on financial performance of Brewery firms in Nigeria and also to provide empirical proof on “governance disclosure” as one of the explanatory variables of sustainability accounting disclosure. Consequently, this study ascertained the effect of sustainability accounting disclosure on financial performance of Brewery firms in Nigeria. An ex–post facto research design approach was adopted for the study. The population of this study comprised five (5) Brewery firms quoted on the floor of the Nigeria exchange group (NGX), and Nigerian Breweries Plc was purposively used as the sample size of this study. Secondary data were carefully sourced from the financial statement/annual reports and sustainability reports from 2013 to 2022 of the Brewery firms quoted on the Nigeria exchange group (NGX). Least regression analysis by aid of E-views 10.0 software was used to test for statistical significance of the effect of sustainability accounting disclosure on financial performance of Brewery firms in Nigeria. The results showed that Economic Sustainability disclosure indexes do not significantly affect Net Profit Margin of Brewery firms in Nigeria. The findings further revealed that Environmental Sustainability disclosure indexes significantly affect Net Profit Margin of Brewery firms in Nigeria. More so, results showed that Social Sustainability disclosure indexes do not significantly affect Net Profit Margin of Brewery firms in Nigeria. Finally, the result established also that Governance Sustainability disclosure indexes do not significantly affect Net Profit Margin of Brewery firms in Nigeria, this study recommends among others; that managers of Brewers in Nigeria should improve and sustain full disclosure practices on economic, environmental, social and governance disclosures following the guidelines of the Global Reporting Index(GRI) as they are capable of exerting significant effect on financial performance of firms in Nigeria.

Financial Technology (Fintech) and the Performance of Firms in Nigeria

The study examines the role of fintech on the performance of deposit money banks and SMEs in Nigeria. The study employed ex-post facto research design in the work. The data generated from the secondary data were presented and analysed using quantitative method. The method of analysis used in this study was the Auto-regressive distributed lag technique (ARDL) method. The study found that financial technology have a significant impact on the performance of deposit money bank in Nigeria. This is evident from the F calculated value of 1234.17, which is greater than the F critical value of 3.11. The study found out that financial technology have a significant impact on the performance of small and medium enterprises in Nigeria. The study recommends that Deposit money banks should be encouraged to do more in getting their customers to increase the use of fintech products. In addition, SMEs should be encouraged to adopt fintech as this has been shown to serve as an instrument for business development.

Assessing the Effects of CEO Characteristics on the Financial Performance of Firms in Nigeria

This study investigated the relationship between CEO characteristics and the financial performance of listed firms in Nigeria (2005 –2022). The regression analyses employed in this study are pooled panel regression, random panel regression and fixed panel regression. Under the firm performance indicator – ROA, the Hausman-statistics p-value of 0.23 indicated that we accept the null hypothesis which says that random effect prevails. But the fixed effect result was adopted because it best explains the model as it considers the constant variables and solves the omitted variable bias problem. The result showed that CEO origin has a positive and significant impact on return on assets (2%). Whereas, CEO gender showed a negative and insignificant effect on return on assets (30%). CEO tenure impacts a negative and insignificant relationship with return on assets (62%). Furthermore, this result showed a positive and insignificant relationship between leverage and return on assets. While capital expenditure shows a negative and insignificant relationship with return on assets. The study recommends that, Firms should adopt internal recruitment in appointing CEO, as they tend to possess insider-knowledge and experience peculiar to the firm’s nature of work and relationship with the staff that an outsourced CEO may not have opportunity to immediately after his appoint and could be a major set-back in fulfilling the goal of the firm.

Cash Flow Management and Firm Performance: Moderating Effect of Corporate Governance Mechanism in the Era of Disruption in Emerging Economy

The moderating effect of corporate governance mechanism on the relationship between cash flow management and performance of listed manufacturing firms in the era of disruption in Nigeria was empirically investigated in this study. Operating, financing, and investing activities were used as proxies for cash flow management. Net assets per share (NAPS) was used to measure firm performance while board independence was used as a proxy for the corporate governance mechanism (moderating variable). Panel least squares regression model operated with E-View 12 was utilized to perform the statistical test of parameter estimates, and six hypotheses were formulated to direct the investigation. Ex Post Facto design was used, and the data for the study was collected from the published annual financial reports and accounts of companies listed on the Nigerian Exchange Group (NGX) under the consumer goods sector, industrial goods sector, and oil and gas sector. The results of the study show that operating activities (OA) significantly affect firm performance (NAPS) at 5% significant level. Furthermore, it was discovered that, at 1% significant level, financing activities (FA) has a positive and significant effect on firm performance, whereas investing activities (FA) has the same effect on firm performance in Nigeria. Also, it was noted that, at 1-5% significant level, corporate governance mechanism (board independence) moderated the effect of cash flow management on firm performance in Nigeria. Thus, the study concludes that in this disruptive era in Nigeria, firms’ performance is determined by their ability to manage their cash flow effectively. Moreover, strong corporate governance practices ensure the success of the company. In light of the study's findings, the study recommends that businesses should review their approaches to managing cash flow so that they can produce enough cash to cover both their operating and investing needs. On the other hand, net cash flow from financing activities ought to be preserved because it has a substantial impact on the financial results of the Nigerian listed companies.

LIQUIDITY RISK AND PERFORMANCE OF NON-FINANCIAL FIRMS LISTED ON THE NIGERIAN STOCK EXCHANGE

This study has examined the effect of liquidity risk on performance of non-financial firms listed on the Nigerian Stock Exchange. The main objective was to assess the degree of influence liquidity risk measured by (standard deviation of quick ratio and current ratio) have on performance (return on assets) of the non-financial firms in Nigeria. Data from all the 87 non-financial firms listed on NSE were extracted through financial reports and analyzed using descriptive statistics, correlation and regression through STATA version 16. The findings revealed that current ratio have negative and significant effect on performance, while the quick ratio was not significant in influencing performance. The result implies that an increase in liquidity risk (difficulty in running the operations and offsetting short term maturing obligations), leads to a significant decrease in performance of the firms. The result also confirms that the standard deviation of current ratio provides better measurement of liquidity risk. It was however concluded that, liquidity risk has negative and significant effect on performance of firms in Nigeria. The study recommends that more attention should be given to liquidity management to minimize the risk of insolvency or bankruptcy of firms in Nigeria as such will help in reducing liquidity risk issues and improve performance of the non[1]financial firms in Nigeria.

Does Corporate Social Responsibility Influence Firms Performance in Nigeria?

Social responsibility disclosure has become a widely and persistent debated topic of discussion in the Nigerian academic community given the effects that business activities have on environment, employees, communities, clients, society, business associates and shareholders. The global economic challenges have hindered effective operations by the deposit money banks thereby reducing their operational performance. It is against this backdrop that this study examined the effect of social responsibility disclosure and firm performance in Nigeria. Social responsibility disclosure as the explanatory variables was proxied by environmental disclosure, governance disclosure, human resources disclosure and community disclosure while the response variable is the firm performance. sampling technique was adopted by the reviewed studies. A mixed approach of data was used (primary and secondary sources of data were extracted from both questionnaires and the annual report and accounts from various studies. Theory and hypotheses were adopted and multiple regressions was used to analyze the data. Based on the reviewed studies, it was established that environmental disclosure and human resources disclosure have insignificant effect on the firm performance, while the governance disclosure has a significant effect on firm performance. The community disclosure is positive and insignificant influencing firm performance. It is recommended among others that companies should engage the specialty on environment reporting to reduce the performance on the firms. Also, firms should improve by participating in community services to better disclosure the community activities and maintain the current governance disclosure level because this has been found empirically to increase the firm performance.

Resource-Use Efficiency and Firm Performance in Nigeria’s Manufacturing Industry

The study investigated the existence of technical efficiency among manufacturing firms and examine its effects on firm performance in Nigeria using firm level data between 2001 and 2017. Variables such as capital, labour, total overhead inputs, total firm output, competition, capital intensity, firm market share, technical efficiency scores and firm profitability were used in this study. Using the stochastic frontier analysis (SFA) to generate the technical efficiency scores, the study adopted System-GMM to examine the effects of technical efficiency on firm performance among quoted manufacturing firms operating in consumer (food beverages and tobacco), industrial and health (pharmaceutical) sectors in Nigeria. The findings revealed that 29% of the variation between the observed and optimal outputs is attributed to inefficiency among manufacturing firms. However, firm competitiveness significantly increases the efficient use of resources among manufacturing firms. This study further showed that technical efficiency variable has positive effects on manufacturing firm performance in Nigeria. The paper concluded that competition increases the efficient utilization of resources which positively improves firm performance in Nigeria’s manufacturing industry. Finally, the paper recommended that industrial policies should be geared towards promoting healthy competition (and not collusion) among manufacturing firms to attain optimal economic efficiency of resources.

Product knowledge and firm performance: A study of Dangote Group

Knowledge, according to researchers, is significant for competitive advantage. This study aimed to investigate the impact of product knowledge on firm performance in Nigeria. This study employed a survey research design. Primary data was employed for this study and 532 copies of the questionnaire were administered to the respondents of the study. Regression analysis was employed to verify the hypotheses formulated for this study. Results revealed that product experience knowledge is the most significant measure of product knowledge driving firm performance. The study concluded that the relationship between product knowledge and how efficient the salesperson will be in driving the firm's revenue reveals the process by which salesperson knowledge influences firm performance. The study, therefore, recommends that to increase their performance, firms should improve the salespersons' knowledge of their product and motivate them to seek creative ways to drive revenue. Keywords: Firm Performance; Objective Product Knowledge; Subjected Product Knowledge.

Fiscal Incentives and Tax Compliance Behaviour in Industrial Clusters: A Survey of Clusters in South-east Nigeria

ABSTRACT The study investigates the impact of fiscal incentives on the tax compliance behavior of firms in industrial clusters in Nigeria. Data from 800 firms drawn from three industrial clusters in South-East Nigeria were collected using a structured questionnaire through a multi-stage sampling procedure. Descriptive statistics and the logistic regression model were applied to estimate the survey responses. The major findings of the study show that regular tax audit, firm size, simplifying the communication on tax requirement, communicating deterrent messages, educational attainment of the firm owner and political legitimacy of the current government as well as fiscal incentives (tax credit, tax reduction, capital allowance, investment incentives) significantly influence the tax compliance behavior of firms in Nigeria’s industrial clusters. Similarly, the study finds that fiscal incentives significantly enhance firm performance in Nigeria’s industrial clusters. Implications and policy suggestions are presented for adoption by concerned stakeholders in the tax and industrial sectors.

Promoting the financial performance of registered multinationals through social financial management in Nigeria

The paper examined the effect of social financial management on the financial performance of firms in Nigeria with much emphasis on the nine quoted oil and gas multinationals as of 31st December 2022. The study unlike prior studies decomposed social financial management into six broad categories which are Non-discriminatory policy, Employee Engagement, Support for Local Communities, Anti-Corruption & Public Policy, and Product Responsibility while firm performance was measured by return on investment (ROI). The study spanned from 2011 to 2022 (12 years) over 9 nine quoted oil and gas multinationals as of 31st December 2022 culminating in 108 observations. The most effective panel regression estimate was found using the Hausman test. According to the survey, there is no gender prejudice in the target businesses. Furthermore, nondiscriminatory policies and employee engagement have a negligible but favourable impact on the success of the company. This shows that, because they receive less attention, non-discriminatory policies and employee participation (collective bargaining & freedom of association) have little impact on the success of the company. Support for Local Communities, Public Policy & Anti-Corruption, and Product Responsibility, however, had a direct and significant impact on the targeted oil and gas multinationals' return on investment. Therefore, the study concludes that although social finance plays a significant role in the performance (or return on investment) of publicly traded oil and gas multinationals, more work must be done because most Nigerian businesses still lack a strong social conscience. Therefore, it is recommended that the management of listed international oil and gas companies give more information about employee engagement, non-discriminatory policies, anti-corruption & public policy, and product responsibility.

Board Structure and Firm Performance in Nigeria

Firm performance is determined in varying categorization of internal factors like managerial structure efficiency, corporate governance set up and ownership structure, which are made up of the firm broad structure, as this affects the ability of firms and control of external factors. In this study, the impact of board composition on firm performance in the manufacturing sector is examined. Primary data constructed from research instruments are based on questionnaires administered to 50 manufacturing firms in Nigeria and is aimed at identifying their corporate governance structure and to relate it to the overall performance of the firms. The qualitative response modeling techniques are also adopted for the empirical analysis. The results from the analysis shows that disclosure policy and measures aimed at guaranteeing board independence are very strong performance enhancing factors. On the other hand, conflict of interest among board members is found to exert significant negative impact on firms performance in the study. It is therefore recommended that corporate boards in manufacturing firms in Nigeria would be more effective with fewer but more committed members. Large-size boards may embellish conflict of interest among members and also decrease the sense of personal responsibility, with each board member taking refuge in the collective position.

CORPORATE DIVERSIFICATION AND FINANCIAL PERFORMANCE OF CONGLOMERATE FIRMS IN NIGERIA

This study examined the effect of corporate diversification on the financial performance of conglomerate firms in Nigeria. The nine (9) conglomerates firms listed on the Nigerian Stock Exchange as of 2019 formed the population and sample size for this study from 2011 to 2019. Corporate diversification was measured by; product, operational and geographical diversification. Panel least-square analytical method was used. Two-panel co-integration models were developed for empirical analysis to measure financial performance using Return of Assets (Book Value) and Tobin's Q (Market Value). The study's findings revealed that product diversification has a positive impact on the financial performance of conglomerates in Nigeria. However, operational and geographical diversification showed a negative but significant relationship between corporate diversification and the financial performance of conglomerates in Nigeria. It was concluded that corporate diversification has a dominant-negative impact on financial performance. However, only one form of corporate diversification (product) was positively related to financial performance. Therefore, the study recommends that conglomerates focus more on implementing geographical diversification strategy than other types of diversification as it encompasses a great deal of product and services promotions, which is key to improving annual sales and product awareness.

Effect of Macroeconomic Variables on Financial Performance of Healthcare Manufacturing Firms in Nigeria

This study empirically investigated the effect of macroeconomic variables on financial performance in Nigeria healthcare sector. It spanned for the period of 2008-2018 and utilized annual time series secondary data extracted from annual reports and financial statements of the selected firms. Ex-post facto research design was adopted while analytical techniques employed were descriptive statistics, fully modified ordinary least squares panel regression and Pearson correlation analysis. Findings revealed that changes in macroeconomic indices play significant roles on the financial position of Healthcare manufacturing firms in Nigeria. Particularly, result showed that exchange rate, interest rate, external debt and trade openness have negative effect while inflation rate exert positive influence to financial position of Healthcare manufacturing firms in Nigeria. Among the selected macroeconomic variables, the effects of exchange rate and inflation rate were significant. Implication of the result is that unstable macroeconomy is harmful to healthy growth of Healthcare manufacturing firms in Nigeria. The study therefore recommended among other things that exchange rate should be monitored while economic policy measures aimed at controlling exchange rate in Nigeria should be established. High rate of interest should also be regulated and set to a rate favourable to the growth of Healthcare manufacturing companies in Nigeria. Federal government of Nigeria should work towards reducing their level of borrowing from foreign countries and as well reduce volume of trade openness for overall performance of manufacturing sector in Nigeria.

Cost Control And Financial Performance Of Pharmaceutical Firms In Nigeria

This paper examined the impact of cost control on financial performance of pharmaceutical firms in Nigeria from 2010 to 2019. Secondary data were used in this study. The secondary sources of data were sought from published annual reports of the six quoted pharmaceutical firms in Nigeria. The variables used in the study include; Profit after Tax (PAT), Cost of Raw Material (CRM), Selling and Distribution Expenses (SDE), Salaries and Wages (SWE), Research and Development (RDC) and Training (TEC). Panel regression analysis was employed to evaluate the impacts of cost control on financial performance of pharmaceuticals firms in Nigeria. The results revealed that cost control has significant influence on financial performance of pharmaceuticals firms in Nigeria. The study recommended that the management of the firms should adopt modern strategic cost management method for effective operation in the organization in order to enhance their performance.

The Nexus between Gross Domestic Product (GDP) and Financial Performance of Firms: Empirical Evidence from the Nigerian Insurance Industry

This study looked at the impact of gross domestic products (GDP) on the Financial performance of insurance firms in Nigeria using gross written premium (GWP), profit before tax (PBT), total assets (TA), capital employed (CE) and shareholders fund (SHF) as proxies for financial performance. The study adopted the theories of shareholder primacy theory also known as the shareholder value theory and signalling theory. shareholder primacy theory sees organisation as entities with the primary objective of maximising the wealth of the shareholder while signalling theory looks at the propensity to change of financial performance to changes in GDP figures. Using secondary data sources, findings from the results of our regression analysis show that Nigeria’s GDP has an impact on Total assets, total capital employed, profit before tax and shareholders fund but has negligible impact on the gross written premiums of insurance firms in Nigeria. It was therefore recommended that government should seek to contribute positively to GDP growth through the instrumentality of fiscal and monetary policies, enterprises should contribute to GDP growth through taxes and employee benefits and firms should adopt a bullish approach to consumption for better GDP outcomes . Keywords: impact, gross domestic products, financial performance DOI: 10.7176/RJFA/12-6-07 Publication date: March 31 st 2021

The influence of profit sharing in sustaining corporate governance and corporate social responsibility on firm performance: a cointegration approach

The study examined the influence of profit sharing in sustaining corporate governance and corporate social responsibility on firm performance in Nigeria. This Study is predicated on the Stewardship and Agency theory. The study disaggregated firm performance into revenue, market share, profitability and cash flow in line with the theories reviewed. The data were obtained from the company review published audit financial report. Collected data covered the period of 27 years spanning from 1992-2019. Based on the mixed level of stationarity of the variables as revealed by the unit root test, the study made use of auto-regressive distributed lag (ARDL) technique to analysis the data. The bound test revealed that; there was presence of co-integration (long-run relationship) among the dependent and all the explanatory variables consequently the study estimated the ARDLECM. The result revealed that market share have positive and non-significant influences corporate governance and corporate social responsibility, the result further showed that Revenue (RVN), Profitability(PRT) and Cash Flow (CFL) had a positive and significant impact on corporate governance and corporate social responsibility in Nigeria which is a clear indication that profit sharing have positive and significant influence in sustaining corporate governance and corporate social responsibility on firms performance both in short and long run. The findings of this study are in tandem with stewardship theory.

Corporate Governance and Performance of Non-Financial Firms in Nigeria

The study examined corporate governance and the performance of non-financial firms in Nigeria within the canonical correlation analytical framework. The study validated the relationship between set of corporate governance variables and set of firm’s performance variables using relevant data extracted from the firm’s published annual financial statements and various issues of the Nigerian stock exchange fact books spanning 2011-2018. The results from this study provided evidence to prove the existence of a statistically significant association between sets of corporate governance and sets of firm’s performance variables using the Wilks’ Lambda, Pillai’s trace and Lawley-Hotelling trace at the 5 percent significance level and Roy’s Largest root at the 1 percent significance level. The implication of this study is that corporate governance is highly instrumental in improving the performance of non-financial firms in Nigeria. In other words, an improvement in corporate governance indices will inevitably boost the profitability of non-financial firms in Nigeria.

BOARD COGNITIVE DIVERSITY AND FIRM PERFORMANCE NEXUS: EVIDENCE FROM NIGERIA

Purpose of the study: This study examined the influence of board cognitive diversity on firm performance in Nigeria. The researchers investigated consumer goods firms listed in the Nigeria Stock Exchange from 2013 to 2018.
 Methodology: This research is hinged on the positivist research philosophy; and the deductive research approach. The study adopted the multi-method quantitative research design. Data was hand-collected from the annual financial statements and firms’ websites of consumer goods firms. The researchers measured board cognitive diversity by educational level diversity, education background diversity, and professional member diversity; while performance was measured via financial performance (ROA) and market performance (Tobin's Q). Panel least squares were used to estimate the model of the study.
 Main Findings: Results from the panel least squares regression revealed mixed findings on the nexus between the proxies of board cognitive diversity and firm performance in Nigeria. Specifically, we found that education level diversity and professional member diversity of board members positively and significantly affects market performance. In contrast, the educational background diversity of the board negatively and significantly affects the market performance of consumer goods firms in Nigeria. Furthermore, we found no evidence on the nexus between educational level diversity; educational background diversity; professional membership diversity of board members, and financial performance of firms investigated.
 Implications/Applications: The researchers concluded that board cognitive diversity partially influences firm performance in Nigeria. The study recommended that firms in Nigeria, specifically consumer goods firms, should encourage more representation of board directors with a postgraduate degree. This is because they have advanced knowledge and expertise to improve the firm's performance.
 Novelty/Originality of this study: This is pioneer research to investigate the influence of board cognitive diversity on firm performance in Nigeria.