MACROECONOMIC EFFECTS ON FIRMS PERFORMANCE IN THE CONSUMER GOODS SECTOR IN NIGERIA

Abstract

Macroeconomics role on firms performance has really attracted economists because of its complexity in formulating corporate policies in achieving success among many organizations. The performance of firms is highly considered as an important indicator for investors while making investment decisions due to it reflecting the firm’s overall financial health. The aim of this study is to examine the relationship between macroeconomics and performance of firms listed on the Nigeria Stock Exchange (NSE). Return on Assets (ROA) was selected as proxy for firm performance while the independent variables included were key macroeconomic variables like inflation, exchange rate and interest rate using data running from 2013-2017. To analyse this, data was taking from ten (10) out of twenty-one consumer goods firms listed in the Nigerian Stock Exchange (NSE). It is necessary for a firm to maintain high performance. So this study is designed to investigate the effect of macroeconomics on firms performance in the consumer goods sector in Nigeria. The study used the descriptive and regression analyses to test the hypotheses developed in the study. The study found out that the relationship between return on asset and interest rate is positive and has no significant relationship, also the relationship between return on asset and inflationary rate is positive and there is no significant relationship, the relationship between return on asset and exchange rate is also positive but also no significant relationship between the two variables.