KCA Journal of Business Management

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The Effects of Firm Strategic Factors on Manufacturing Companies’ Performance: Evidence from Nigeria

Sylvanus S. Adamade, Umar Gunu


The effects of firms’ strategic factors on strategic choices and performance differentials in Nigerian manufacturing sectors have not been systematically investigated. Against the backdrop of declining manufacturing performance in Nigeria, this paper examined the effects of selected firm strategic factors on the returns on invested capital in Nigeria’s manufacturing sector. The study sample consisted of 30 quoted manufacturing firms spread over eight industrial sectors. Data was collected from these 30 firms over a five year period (i.e. 2003 to 2007 and analyzed using a panel regression model. A key finding of the study is firm strategic factors in the study i.e. size, age and capital intensity were heterogeneous and related differently to the performance parameter - return on invested capital. Size had a positive effect on returns on invested capital while age and capital intensity had negative effects. The study concluded that firm strategic factors influenced returns on invested capital differently for manufacturing firms. It was therefore recommended that emphasis on resources and capabilities should be sustained to boost the strategic performance of Nigerian manufacturing sectors.

Keywords: Firm Strategic Factors, Manufacturing Companies, Performance, Nigeria

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