Firm Life Cycle and Financial Performance: Evidence from Nigeria
Abstract
Purpose: There are limited scholarly works in Nigeria which examine
the influence of firm life cycle on financial performance. This study
has filled this gap by examining the effects of firm life cycle on
financial performance of listed firms in Nigeria.
Design/Methodology/Approach: Correlational research design was
used and data were extracted 91 listed firms over a ten-year period
(2010-2019) and analyzed using descriptive statistics (mean, standard
deviation, minimum mean and maximum mean) and inferential
statistics (correlation coefficients and multiple regression analysis).
Diagnostic checks such as normality, multicollinearity,
heteroskedasticity, serial (auto) correlation and panel effects tests were
carried out and the results were used to decide the appropriate methods
of regression analysis.
Findings: We find maturity stage to have positive and significant
effect on financial performance. However, we fail to find any
significant effect at introductory, growth and shake-out stage.
Implications/Originality/Value: The study, therefore, concludes that
the maturity phase is the most critical stage and recommends that
managers should pay greater attention to their businesses, particularly
during the period of maturity to avoid shakeout or decline.
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