International Journal of Research and Scientific Innovation (IJRSI) | Volume IX, Issue VI, June 2022 | ISSN 2321–2705
Firm Structural Characteristics and Corporate Performance of Brewery firms: Evidence from Nigeria
Uguru, Leonard C.1 and Ituma, Chinweolu E.2
Department of Accountancy
Ebonyi State University, Abakaliki, Nigeria
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.
Key Words: Firm structural characteristics, corporate performance, brewery firms, Firm Size, Nigeria
I.INTRODUCTION
The performance of any firm will not only be vital in enhancing the market value of that particular firm but will also results in the growth of the entire industry which will invariably encourage the overall gross domestic product of the economy (Kaguri, 2013). The Nigerian brewery sector is a sub-sector of the food and beverages industry in Nigeria. This sector continues to thrive, despite the fact that the global consumption declines as a result of the recent global economic crisis and the Nigeria economic recession as well as increasing health awareness of the consumers. The major operations of brewery firms comprise the production, packaging and sales of alcoholic and malt beverages (Adekoya, 2016; GTI Research, 2012). From the report of the Deutsche Bank Market Research, it has been certified that Nigeria is Africa’s largest alcohol consumer, accounting for