Impact of Environmental Cost on Financial Performance of Listed Industrial Goods Firms in Nigeria

Ahmed Tanimu Abdullahi and Muhammad Liman Muhammad
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Ahmed Tanimu Abdullahi: Department Of Accounting, Bayero University Kano – Nigeria
Muhammad Liman Muhammad: Department Of Accounting, Bayero University Kano – Nigeria

International Journal of Research and Scientific Innovation, 2023, vol. 10, issue 12, 64-82

Abstract: To fill the gap in the industrial goods sector of the Nigerian economy on the subject matter, this study investigates the impact of environmental cost on the financial performance of listed industrial goods firms in Nigeria. An explanatory research design was employed to collect panel data extracted from the annual reports and account of the 11 sampled listed firms, for a period of Ten (10) Years (2012 -2021). The regression results obtained from the study’s models indicates that the firms’ environmental cost (Community Development cost and administrative cost) affects their accounting-based financial performance (ROA) significantly and positively, and also affects the market-based financial performance indices (Tobin’s Q) insignificantly and negatively. Thus, based on the study’s findings it recommended that the management of the firms should employ effective and right balance investment on environmental cost components that will cater for all the stakeholders’ interest.

Date: 2023
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