AN ANALYSIS OF THE INFLUENCE OF FIRM SPECIFIC VARIABLES ON FINANCIAL PERFORMANCE IN THE NIGERIAN MANUFACTURING SECTOR

Abstract

This study examined the effects of firm specific variables on firm financial performance in the Nigerian Manufacturing Sector. Ex-post facto research design and secondary data were utilized for the study. Data were sourced from Annual Reports of twenty (20) manufacturing companies from 2008 to 2017. The variables utilized were Sales Growth (SG), Age of the Firm (AF), Tangibility (TAN), Firm Size (FS), and Leverage (LEV) for firm specific variables. Firm performance was measured by Return on Assets (ROA). Pooled Ordinary Least Square (POLS) regression analysis was employed to ascertain the effects of SG, AF, TAN, FS and LEV on ROA at 0.05 level of significance. Findings showed that SG (β = 1.1251, p-value =

0.0013), AF (β = 2.4561, p-value = 0.0045), TAN (β = 0.5602, p-value = 0.0141), FS (β = 0.0308, p-value = 0.0057) and LEV (β = 5.3111, p-value = 0.0353) had positive significant influence on ROA with R² of the model = 0.7411, adjusted R² = 0.6816 and p-value = 0.0003. It was concluded that firm specific variables exerted significance influence on the financial performance of the sampled companies and recommended that companies should develop policies aimed at promoting and improving firm characteristics.