STRUCTURAL CAPITAL EFFICIENCY AND FINANCIAL PERFORMANCE

EVIDENCED FROM QUOTED NONFINANCIAL FIRMS IN NIGERIA

Abstract

The study examined how structural capital efficiency affected Nigerian publicly traded companies' financial results. It used a sample of Nigerian companies to examine the relationship between structural capital efficiency and important financial indicators, such as ROA and ROE. A descriptive study design was employed, utilizing an ex-post facto methodology. Twenty-two companies were purposefully chosen from a total of 151 publicly listed firms in Nigeria for this analysis, focusing on their financial statements. The sample included 11 manufacturing firms, 5 ICT companies, 3 health services providers, and 3 oil and gas enterprises, spanning a period from 2013 to 2022. The analysis made use of panel data techniques and a number of post-estimation tests, such as random effects models, fixed effects, and Ordinary Least Squares (OLS). In order to maintain accuracy and handle endogeneity concerns, the SGMM was also utilized.  The results of the study indicated that while SCE had a positive, non-significant influence on ROE (p-value = 0.3886, β = 0.168, t-value = 0.8638), it had a significant positive effect on ROA (p-value = 0.0029, β = 0.0206, t-value = 3.0141). These results showed that while structural capital efficiency had a favorable but statistically insignificant effect on ROE, it greatly increased ROA.  The study's conclusions suggest that management should give structural capital development top priority in order to enhance financial results since it has a positive effect on the financial performance of Nigerian businesses.