Economic effects of growth strategies on the performance of quoted manufacturing firms in Nigeria
by Samson Ige Abolarinwa; Cosmas Ikechukwu Asogwa; Charity A. Ezenwakwelu
International Journal of Business Performance Management (IJBPM), Vol. 21, No. 3, 2020

Abstract: We used a sample of 144 firm-years of quoted manufacturing Nigerian firms to examine the effect of growth strategies on firms' performance for the period between 2014 and 2017. We found that internal growth strategies - such as aggressive profit retention - and new product development improved manufacturing firms' economic performance. Internal growth strategies yielded positive economic effects on returns on assets and equity. Growth through market deepening yielded high market shares that created economic values for investors. However, external growth strategies negatively affected firms' returns on assets, though conglomeration strategies enhanced equity investors' stakes. The positive effect associated with internal growth strategies depends on good management efficiency in terms of asset utilisation and good liquidity management. The effect suggests that growth strategies should be pursued when firms experience an increasing return to scale. Otherwise, inefficiency in assets utilisation cancels out any potential positive economic effects of a growth strategy.

Online publication date: Wed, 08-Jul-2020

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Business Performance Management (IJBPM):
Login with your Inderscience username and password:

Username:        Password:          Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com