Impact of Political Environment on Business Performance of Multinational Companies in Nigeria

Abstract

This study investigated the impact of political environment on business performance of multinational companies in Nigeria. To achieve this purpose, a review of extant literature was made which was supported by hypothesis. The population of this study consists of quoted manufacturing companies in Nigeria. About twenty-seven (27) of such companies were identified and the necessary data were sourced from the Nigerian Stock Exchange Fact Book of 2012 and the World Development Indicators of World Bank Group. Political environment was measured as the degree of political stability and absence of violence while business performance was measured by the profitability of the companies for the period 1999-2013. Our findings showed that political environment has a negative significant impact on business performance of multinational companies in Nigeria. Based on the above, we suggest that the Nigerian government should avoid frequent changes in government policies and programmes, and ensure stability of democratic institutions and political integration. These are necessary to make the political terrain stable and out of violence for business growth and development.

Key words: Political environment, business performance, multinational companies.