CAPITAL EXPENDITURE DECISIONS AND LONG TERM VALUE OF THE FIRM: EVIDENCE FROM NIGERIAN MANUFACTURING COMPANIES

Uwem Etim Uwah
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Uwem Etim Uwah: Akwa Ibom State University, Postal: Department of Accounting, Faculty of Management Science, Uyo, Akwa Ibom State.

International Journal of Contemporary Accounting Issues-IJCAI (formerly International Journal of Accounting & Finance IJAF), 2019, vol. 08, issue 1, 152-169

Abstract: This study determined the extent to which capital expenditure decisions made by listed manufacturing companies in Nigeria relate with the value of the firms in the long term. The ex post facto and correlational research designs were adopted for the study. Secondary data were extracted from the Nigerian Stock Exchange Fact Books for the period, 2010 – 2016. The number of manufacturing companies listed in the Stock Exchange during this period was 83, and the sample size used was 69. With the aid of regression analyses, the findings revealed that capital expenditure decisions had a significant relationship with long term value of manufacturing firms. The study concluded that capital expenditure decisions have a significant relationship with the long term value of manufacturing firms in Nigeria. It was recommended that management of manufacturing companies should ensure the holistic use of all techniques, exploring risks, real and growth options analyses as well as portfolio management techniques involving capital assets, in appraising capital investments before taking decisions.

Keywords: Capital expenditure decisions; Long term value; Economic value added; Market value added; Real option analysis. (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:ris:ijafic:0020

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