A COMPARATIVE STUDY OF FINANCIAL PERFORMANCE OF MULTINATIONAL AND INDIGENOUS INDUSTRIAL GOODS FIRMS IN NIGERIA

Abstract

ABSTRACT

This study investigated the comparative financial performance of multinational and indigenous industrial goods firms in Nigeria between 2015 and 2024. An ex post facto research design was adopted, relying on audited financial statements from ten purposively selected firms. Descriptive statistics showed that the average Return on Assets (ROA) was 7.253%, Return on Equity (ROE) was 12.842%, and Tobin’s Q averaged 1.421, with variations across firm types. Independent t-tests revealed that multinational firms significantly outperformed indigenous firms in ROA (8.152% vs. 6.354%; t = 2.144, p = 0.035) and Tobin’s Q (1.672 vs. 1.174; t = 3.289, p = 0.001), while no significant difference was found for ROE (12.103% vs. 13.579%; t = 1.009, p = 0.316). Panel regression results further showed that multinationality positively influenced ROA (β = 1.820, p = 0.016) and Tobin’s Q (β = 0.442, p = 0.004), but had no significant effect on ROE (β = 0.910, p = 0.492). Control variables indicated that firm size and liquidity enhanced financial performance, whereas leverage had a negative effect across models. Post-estimation diagnostics confirmed model validity, with fixed effects appropriate for ROA and ROE, and random effects suitable for Tobin’s Q. The study concluded that multinationality improves certain dimensions of financial performance, but internal structural factors remain critical. It was recommended that indigenous firms strengthen financial management and capital structures to improve their competitiveness in the industrial goods sector.