Firm Structural Characteristics and Corporate Performance of Brewery firms: Evidence from Nigeria

Leonard C. Uguru and Chinweolu E. Ituma
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Leonard C. Uguru: Department of Accountancy, Ebonyi State University, Abakaliki, Nigeria
Chinweolu E. Ituma: Department of Accountancy, Ebonyi State University, Abakaliki, Nigeria

International Journal of Research and Scientific Innovation, 2022, vol. 9, issue 6, 17-28

Abstract: This paper examined the effect of firm structural characteristics on the corporate performance of brewery firms in Nigeria for the period 2006-2020 by using panel fixed effect regression model. Four explanatory variables (firm size, age, ownership structure and leverage) were used to measure the effect on corporate performance (return on assets as a proxy) of Nigeria brewery firms. The results show that firm size, firm ownership and firm leverage has significant effect on the corporate performance of Nigeria brewery firms at 5% level of significance while firm age has insignificant effect on the corporate performance (ROA). Also, all the variables in the model are jointly significant in explaining variations in the corporate performance of the selected breweries in Nigeria. However, firm size and firm leverage has negative and strong influence on corporate performance of listed brewery firms. The implication of the insignificant effect of firm age on the corporate performance is that an increase in firm age by one per cent will lead to an increase in the corporate performance in the brewery firms by more than one percent. This study contributed to knowledge by identifying firm size and leverage as the areas that managers/directors of brewery firms should focus their performance management strategies because of their negative and strong influence on their corporate performance. It then recommends that investors and managers of brewery firms should consider firm structured-related characteristics (firm size, age, ownership structure and leverage) when they take their investment decisions.

Date: 2022
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