Performance Of Firms In Nigeria Research Articles

An empirical analysis of the effect of business incubation process on firm performance in Nigeria

Small and medium enterprises (SME), acknowledged as tools of economic development, are faced with size-related challenges. Governments around the world design institutions to support them. Business incubation is one of such frameworks for entrepreneurial promotion and SME development. This study predicts firm performance from the constructs of the business incubation process: selection performance, business assistance intensity, resource munificence and professional management services. Using hierarchical multiple regression, the overall model was significant explaining 13.5% of the variation in firm performance with a moderate effect size. Business assistance intensity and professional management services were significant predictors while incubator selection performance and resource munificence were not significant predictors of firm performance. Incubation should be promoted as a tool for entrepreneurial promotion to complement the broader strategic entrepreneurial framework for entrepreneurship promotion. The focus should be on evolving strategies to expand and deepen incubators capacity by intensifying business assistance and professional management services to their clients.

Analysis of the Nexus between CEO Pay and Performance of Non-Financial Listed Firms in Nigeria

This study examines the causal relationship between CEO pay and firm performance in Nigeria for the period 1998–2010, using annual data of 63 non-financial listed firms. We adopt a two-step dynamic generalized method of moments to explore the causal relationship. The study establishes a bi-directional relationship between CEO pay and firm performance. While CEO pay Granger-causes firm performance, firm performance also Granger-causes CEO pay. It implies that CEO pay acts both as a reward and a performance motivator. This study therefore suggests that CEO pay effectively aligns shareholders’ interests with those of CEOs; hence stakeholders should focus more on CEO pay as a corporate governance mechanism to reduce agency problem in non-financial listed firms in Nigeria.

Empirical Assessment of the Link Between Participatory Decision-Making and Firm Performance in Nigeria

Empirical Assessment of the Link Between Participatory Decision-Making and Firm Performance in Nigeria

The Performance of Marine Insurance Firms in Nigeria: An Augmented SWOT Analysis

The performance of Nigeria insurance industry has been ranked below global standards and which ranking has implications on risk management in the maritime shipping sector. In this paper, the performance and operating environment of a sample of insurance firms (with marine risk portfolios) were empirically examined. Secondary data on earned premium income, indemnity paid, management expenses and total expenses representing performance indices of these firms over a period from 1974-2013 were collected for analysis of their operational performance. Qualitative data were also extracted from existing literature for Strengths, Weakness, Opportunities and Threats (SWOT) analysis to determine the attributes of operating environment of the insurance firms. An Analysis of Variance (ANOVA) model tests on the performance indices showed that the insurance firms earned more premium than indemnity paid out during the study period. Their management expenses however, exceeded amount of indemnity paid. In terms of challenges facing the firms, the SWOT analysis revealed prevalence of poor quality service delivery to insurance customers, customer distrust, inadequate technical manpower and unfavourable macro-economic environment. Prospects for growth of the industry were found favourable due to introduction of local content policy/cabotage shipping Acts and upgraded risk management framework. The paper recommends that more specific policy interventions be directed at complete removal of impediments in the operating environment of marine insurance firms since their performance outcome has implications on viability of shipping and related maritime businesses.

Effect of Internal Control on Financial Performance of Firms in Nigeria. (A Study of Selected Manufacturing Firms)

This study focuses on the effect of internal control on financial performance of some selected firms. The methodology of the study is based on survey research approach. The statistical data used for the study were obtained by distribution of one hundred and fifty (150) questionnaire among selected employees, in the five (5) organisations considered in this research work. These respondent were selected using non-probability sampling method, the data obtained from the questionnaire were analysed using multiple regression statistical tools in SPSS ( Statistical packages for social sciences.). The result of the analysis shows that internal control has significant relationship with fraud perpetrated in the organization, and this was because the P- value obtained (i.e.0.002) using multiple regression was greater than the benchmark value of 5% specified in SPSS for this analysis. Based on this result, the study recommends that management should develop more effective strategies that will ensure that internal control is effective and efficient, so that fraud perpetration in the organisation will be significantly reduced .

The Effect of International Financial Reporting Standards (IFRS) Adoption On the Performance of Firms in Nigeria

This paper assesses the effect of compliance with the regulation and provisions of the international financial reporting standards on the performance of some selected Nigerian banks that are quoted on the Nigerian stock market. The paper defines the change in performance based on two parameters. First, change in Accounting Quality of the firms, for which we used such variables as; earnings management, and timely loss recognition. Secondly we measure the performance of the firms based on changes on identified financial ratios of the firms. We tested the impact of adoption as it relates to profitability, growth, leverage, and liquidity performance. The paper utilizes secondary data to tests the effects of the adoption of IFRS on the performance of the selected firms in Nigeria. Logit regression and t-test were used in the analysis. The paper finds that variability of earnings has decreased from an average of 32624.4 to 14432.2 which suggest that there was low variability in earnings in the post adoption period. Timely loss recognition is the measure for prevalence of large negative earnings where large negative results suggest that the loss recognition is not timely in the post adoption period. For our study we found LNEG to be positive which signifies that IFRS firms recognize losses more frequently in the post adoption period than they do in the pre adoption period, we therefore conclude that accounting quality improves after the adoption of IFRS. Furthermore, under IFRS firms tend to exhibit higher values on a number of profitability measures, such as earnings per share (EPS). It is our recommendation that comprehensive implementation of the standard to its totality by firms should be encouraged and regulatory authorities such as the Securities and Exchange Commission, and external auditors should monitor strict compliance with the adoption and provisions of the standards.

Exchange rate volatility and firm performance in Nigeria: A dynamic panel regression approach

This study investigated the effects of exchange rate volatility on firm performance in Nigeria, by examining cross sectional data for the most active 20 companies listed on the Nigerian Stock Exchange. The study developed three dynamic panel models that account for heterogeneities among the companies and it extended recent research by allowing international investors and corporations to base their investment decisions on the exchange rate volatilities between the Nigerian Naira and their home country currencies. The method used in the study is the dynamic panel data approach applying the Arrelano-Bond dynamic panel-data and Arellano-Bover generalized method of moments (GMM) estimators. The variables used in the study to proxy firm performance are the rate of return on assets (RRA), asset turnover ratio (ATR), and portfolio activity & resilience (PAR) variable. While RRA variable is obtained by simply dividing the firm’s profits by the total assets of the business, ATR variable and the PAR variables are obtained by dividing the firm’s sales revenue by the assets employed in the business and by dividing the percentage change in sales by the percentage change in gross domestic product GDP. The exchange rate volatility variable is simply obtained by taking the square of the mean adjusted relative change in the official exchange rate. The result of the paned data estimate shows that there is no significant difference between the Arrelano-Bond dynamic panel approach and Arellano-Bover generalized method of moments (GMM) estimators. The result of the three estimates revealed that exchange rate volatility has significant negative impacts on the rate of return on assets, asset turn ratio and the portfolio activity & resilience, thus, establishing that there exist a significant negative impact of exchange rate volatility on firm performance in Nigeria between 2004 and 2013. Overall, the study suggests that the higher the exchange rate volatility in an economy the less efficient will firms operating in the economy and by implication the lower will be firms’ operating performance.

An Empirical Analysis of Capital Structure on Performance of Firms in the Petroleum Industry in Nigeria

The capital structure decision of a firm is very paramount to its successful operation. The objective of the study was to analyse the impact of capital structure on firm performance in Nigeria from 2003 to 2012. Using data from six petroleum companies in Nigeria namely: Chevron Plc, Conoil Plc, Eterna Oil plc, Mobil Oil Plc, Oando Plc and Total Nigeria Plc. The study carried out a panel data analysis by using fixed effect estimation. The study found that a negative relationship exists between leverage and firm performance and the study established that a positive a relationship exists between three of the explanatory variables (firm’s size, tax and lagged return of asset) and firm performance. The study therefore recommended that the management of the industry should rely more on equity financing as a way of funding their business.

Competition, corporate governance and corporate performance

Purpose – The purpose of this paper is to examine the nature of interactive effect of competition and corporate governance on productivity growth of firms in Nigeria. Studies that have considered this issue were mainly from developed countries possessing strong institutions as against those of developing countries like Nigeria. Moreover, studies from Nigeria have focused exclusively on corporate governance and firm performance. The interaction effect of competition on corporate governance is yet to be addressed in the context of Nigeria. Design/methodology/approach – The study adopts the dynamic panel data analysis approach suggested by Arellano and Bond for productivity growth analysis. Data on 76 non-financial firms for 11 years beginning from 1997 were extracted from the financial statements of companies collected from the Nigerian Stock Exchange and subsequently analysed using General Methods of Moments (GMM). Findings – The results show that competition had a positive impact on productivity growth, however, its interaction effect with corporate governance had a substitute but not significant impact on productivity growth. When competition was interacted with an alternative corporate governance mechanism – bank – a positive and significant impact was, however, observed which shows that competition and bank loans are complementary in stimulating productivity growth of firms in Nigeria. Research limitations/implications – The study could not be carried out beyond year 2007 owing to the exit of some firms after 2007 which could have reduced the sample size drastically. The findings emanating from this study suggests that government should focus much more on implementing competitive policies and bother less on writing corporate governance codes. Practical implications – The results demonstrate that corporate governance had no significant impact on productivity growth even when it was interacted with competition. However, competition on its own had a significant impact on productivity which means that Nigeria should concentrate more on building a competitive private sector, and in this regard, government should try and pursue policies that will foster competition and eliminate monopolistic tendencies. Once, there is effective competition, the corporate governance may be strengthened. However, the interactive effect of competition and bank loans was found with a positive and significant impact which indicates that banks as alternate corporate governance mechanism can only be effective if competition is strong. This goes to show that the financial sector may not be able to effectively and positively impact the real sector in Nigeria if the prevailing level of competition is low. In such a situation finance may not be channelled to projects that have long-run implications on sustainable growth and development. Social implications – Socially, if the environment for competition is not fostered in Nigeria, the country may face an uphill task in combating the problem of poverty through a private sector-led solution. Hence, there is a need for government to begin to formulate comprehensive competition policies that will ensure that resources are optimally utilized in Nigeria. Originality/value – In the context of Nigeria, this study is novel, the use of productivity growth as against firm financial performance is unique for Nigeria while the use of GMM method of analysis helps in reducing the effect of endogeneity inherent in corporate governance and performance of firms in Nigeria.

Board Characteristics and Firm Performance: Evidence from Nigerian Quoted Companies

The broad objective of this study is to investigate the relationship between board characteristics and corporate performance. Time series data from 166 firms quoted on the Nigerian Stock Exchange market from 2005 to 2012 in the Food and Beverages sector was used for the study. We adopt the log of profit after tax as the measure of performance. The study found a positive and significant relationship between independent directors on audit committee and firm performance in Nigeria. The study suggests the need for a competent and sizeable board and a cut down on the waste of resources on too frequent board meetings as the findings reveals that there is a negative relationship between board diligence and performance. The study also gave emphasis on the need to strengthen the independence of audit committee to continuously achieve the control mechanism and oversight functions. DOI: 10.5901/mjss.2015.v4n1p283

Influence of subcontracting constraints on the performance of manufacturing industries in Nigeria

In this work, an attempt has been made to show the influence of subcontracting constraints on firm performance in Nigeria. The study in line with the literature identified a number of constraints hindering an effective subcontracting arrangement in the study area. While the constraints were found not to have affected the use of subcontracting in the country, low capital intensity, disclosure of commercial secrets, poor services and interest conflict were found to have restricted subcontracting arrangements in the study area to sharing of equipment and short-term contracts. These constraints however were found not have affected the performance of manufacturing industries in the study area. This paper keeping in mind the findings of this study suggested that manufacturing industries in Nigeria should invest more in machineries and tools so as to increase subcontracting co-operations among industries.

The Mediating Effect of Organizational Culture on the Relationship between Entrepreneurial Orientation and Firm Performance in Nigeria

The purpose of the study is to examine the mediating effect of organizational culture on the relationship between entrepreneurial orientation and firm performance in Nigerian small and medium enterprises (SMEs). Their relationship receives a considerable scholarly attention in the literature, but few studies have been conducted among Nigerian SMEs. SMEs are considered as important to the economic growth of Nigeria and they constitute the major source of employment and significantly contribute to the gross domestic production. Based on the theoretical consideration, a model was proposed to examine this relationship. A quantitative survey method was used, the data were collected from the owner/managers of SMEs in Kano – Nigeria. A total of 640 questionnaires distributed, 511 usable questionnaires were returned. Partial least squares structural equation modelling (PLS) was used for the data analysis. Based on the statistical findings, entrepreneurial orientation and organizational culture were significantly related to firm performance. Organizational culture was found to mediate on the relationship between EO to FP. The result of the present study has some practical implications: It will assist owner/managers of SMEs take the right decision on the importance of OC in their respective firms. The OC can help owner/managers with well-built EO to attain the maximum performance level in their organizations and remain relevant in their competitive market. DOI: 10.5901/mjss.2014.v5n23p480

The Role of Sme Firm Performance in Nigeria

Purpose – The purpose of this paper is to discuss the role and contribution of SMEs performance in the national development of a developing country like Nigeria. The performance of SMEs plays a major role, but there is a dearth of literature about their contribution which are not well researched in Nigeria. This paper focuses on what SMEs performance contribute and what barriers are there which make them not to contribute at their optimum. A lot of research on the SMEs performance contribution is on developed countries and developing countries with little on developing countries. Design/methodology/approach – This is a general review paper on the performance of SMEs and its contribution that have been made and can make to the national development of Nigeria. Findings – the role SMEs performance in the national growth in Nigeria cannot be overemphasized. The performance of SMEs and its contributions has manifested and shown that they are a major area to be researched to assist the policy makers and the SMEs, owners to encourage enabling and conducive environment for SMEs to perform more Originality/value – This work is aimed at raising awareness of the importance and the performance level of SMEs to national and economic development of a developing country like

Capital Structure and Corporate Performance of Nigerian Quoted Firms: A Panel Data Approach

This paper presents empirical findings on the impact of capital structure (leverage) on performance of quoted firms in Nigeria. The main objective of this study is to determine the overall effect of capital structure on corporate performance of Nigerian quoted firms by establishing the relationship that exists between the capital structure choices of firms in Nigeria and their return on assets, return on equity and tobin’s Q (a market performance measure). The effect of institutional factors such as size, tax and industry on firms’ performance was also established. The study employed panel data analysis by using Fixed-effect estimation, Random-effect estimation and Pooled Regression Model. The usual identification tests and the Hausman’s Chi-square statistics for testing whether the Fixed Effects model estimator is an appropriate alternative to the Random Effects model were also computed for each model. The empirical results based on 2003 to 2007 accounting and marketing data for 101 quoted firms in Nigeria lend some support to the pecking order and static tradeoff theories of capital structure. A firm’s leverage was found to have a significant negative impact on the firm’s accounting performance measure (ROA). An interesting finding is that all the leverage measures have a positive and highly significant relationship with the market performance measure (Tobin’s Q). It was also established that the maturity structure of debts affect the performance of firms significantly and the size of the firm has a significant positive effect on the performance of firms in Nigeria The study further reveals a salient fact that Nigerian firms are either majorly financed by equity capital or a mix of equity capital and short term financing. It is therefore suggested that Nigerian firms should try to match their high market performance with real activities that can help make the market performance reflect on their internal growth and accounting performance

Chief Executive Officer Duality And Financial Performance of Firms In Nigeria

t he work is centred on CEO Duality and Financial Performance of Firms in Nigeria. The objective of the study is to find out the relationship between CEO Duality and the Financial Performance of Firm. We adopted the use of secondary data from the Nigerian Stock Exchange Fact book drawn from various industries during the period 2001 – 2010 and the regression analysis with its Best Linear Unbiased Estimate (BLUES) was employed to test our hypothesis. The findings of the study revealed that CEO Duality is harmful to the Financial Performance of a firm. The study proffered useful recommendations, which when implemented will help improve financial performance of firms in Nigeria.

An Empirical Examination of the Relationship between Ownership Structure and the Performance of Firms in Nigeria

This study examines the relationship between ownership structure and the financial performance of listed firms in the financial sector of the Nigerian economy. To achieve the objective of this study, a total of 31 selected listed firms in the Nigerian stock exchange market were used. Also, the corporate annual reports for the period 2006-2010 were analyzed. This paper basically modeled the corporate ownership structure and firm performance relationship of the selected listed firms using the multivariate multiple regression analysis method to test the research propositions in this study. The study as part of it findings observed that observed that institutional ownership has a significant positive impact on the performance of the selected listed firms in Nigeria. In addition, the study also revealed that that there is a significant positive relationship between foreign ownership and the firm performance in Nigeria.

Assessing the relationship between logistics skills and performance of firms in Nigeria

This paper discusses the result of an empirical study on the relationship between organisational logistics skills and corporate logistics performance conducted in Nigeria. Drawing on the resource-based theory of the firm, the research findings corroborate the hypothesis that organisational logistics skills are positively correlated to corporate logistics performance. The study also captured the impact of company ownership structure and logistics status on performance. The result provides useful and practical results for logistics managers. The research findings emphasise the importance of logistics skills and provide managers with a structured approach in prioritising their logistics skills development plan. It also provides a different way of looking at the corporate logistics skill capacity – previous studies have focused on the relationship between logistics skill and performance of individual logistics professionals.