Saudi Journal of Business and Management Studies (SJBMS)
Volume-3 | Issue-03 | 299-310
Original Research Article
Firm Growth and Profitability: An Empirical Study of Listed Agricultural and Agro Allied Companies in Nigeria
IsiakaOlalekan Lasisi, Lateef Olumide Mustapha, Joshua Okpanachi
Published : March 30, 2018
Abstract
This study empirically examines the effects of firm growth on the
profitability of listed agricultural and agro allied firms in Nigeria. The population of
the study consists of twenty four (24) listed agricultural and agro allied firms in
Nigeria as at 31st December 2016. The sample size of the study is (20) twenty for the
period of nine years (2008-2016). The judgmental sample technique was applied. The
panel data was extracted from the annual report and accounts of the study firms. A
multiple regression was used to analysis the data through STATA13 to test the null
hypotheses of the study. The Hausman test conducted indicated that the model is fixed
effect. The result of findings showed that sales growth has a positive and significant
effect on return on asset, also asset growth shows a insignificant negative effect on
return on asset, while firm age revealed a significant negative effect on return on asset
of the listed agricultural and agro allied firms in Nigeria. It is recommended among
others that the management of agricultural and agro allied firms in Nigeria should
maintained a level of sales level through market strategies. The firm managers should
strike a balance between asset investment and profitability and always maintain
reasonable level of profitability has company grow older to prevent liquidation of
companies.