EFFECT OF FIRM-SPECIFIC CHARACTERISTICS ON FINANCIAL PERFORMANCE OF LISTED AGRICULTURAL FIRMS IN NIGERIA

Abstract

Agriculture is the bedrock of economic growth, development and poverty eradication in developing countries. Agriculture has also been regarded as the engine and panacea to economic prosperity. This study examined the effects of firm-specific characteristics on the financial performance of listed agricultural firms in Nigeria. The firms were selected on the ground that their data are readily available and the data were obtained from the annual reports of listed firms. Static panel data regression analysis was used for the analysis. The findings of this study revealed that some firm-specific characteristics like of assets maturity, size, dividend payout, and liquidity have significant effect on financial performance of listed agricultural firms in Nigeria. it was concluded that the listed agricultural firms utilized their assets and manage their liquidity efficiently. There is however, some scale inefficiencies in the firms because, the finding of negative relationship between firm size and return on assets indicate that the larger the companies become the lower the financial performance. This study has recommended that the managements of agricultural companies in Nigeria should ensure that the firms are not over-capitalized in terms of investment in assets in order to boost both the scale efficiency and profitability of the firms.