Title: FINANCIAL RESOURCE EFFICIENCY AND SUSTAINABLE GROWTH OF LISTED FIRMS IN NIGERIA
Authors:
Onoyenure, George, Okolie Augustine Oke and Ebiaghan Frank Orits
Abstract:
The study examined the relationship between financial resource efficiency and sustainable growth of listed firms in Nigeria. The study employed total assets turnover, non-current assets turnover, operating cost to revenue ratio and directors tunnelling as the determining variables. Ex-post facto research design was employed and the study covered a period of 10 years ranging from 2015 to 2024, secondary data sourced from the published financial statements of 12 commercial banks in Nigeria. These data were analysed using a combination of descriptive and inferential statistical tools and the study hypotheses were tested using the robust regression analysis. The findings revealed that total assets turnover significantly negatively affected sustainable growth, rejecting the hypothesis that it has no effect (t-value = -3.25; p-value = 0.001 < 0.05). However, non-current assets turnover(t-value = -0.26; p-value = 0.795 > 0.05) and operating cost to revenue ratio(t-value = -0.19; p-value = 0.847 > 0.05)were found to have no significant effect on sustainable growth, as both variables showed high p-values indicating weak relationships. On the other hand, directors’ tunnelling was found to have a significant negative effect on sustainable growth, supporting the hypothesis that unethical financial practices can harm the long-term sustainability of banks (t-value = -8.99; p-value = 0.000 < 0.05). The study recommends that Nigerian commercial banks focus on optimizing their assets utilization strategies. This includes improving the management of both financial and physical assets to ensure that they generate long-term value and are not solely focused on increasing turnover, which can lead to inefficiencies. The study adds to knowledge by offering empirical evidence that asset turnover, traditionally seen as a critical measure of operational efficiency, has a significant negative relationship with sustainable growth in the banking sector.
Keywords: Financial resource efficiency; Sustainable growth; Directors tunnelling; Assets Turnover.
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