EFFECT OF CORPORATE DIVERSIFICATION STRATEGIES ON THE FINANCIAL PERFORMANCE OF INDUSTRIAL GOODS IN NIGERIA

Abstract

Business environment in Nigeria is becoming increasingly competitive, uncertain and complex. These changes are happening so fast that organisations that desire to remain in business must speedily adapt and adopt new strategies to meet the demands of the dynamic business environment. The research determines the effect of corporate diversification strategies on the financial performance of industrial goods. The research espoused the ex-post facto data from annual reports of the selected listed industrial goods companies on the Nigerian Stock Exchange (NSE) from 2012 to 2021. The least square regression analysis was used to evaluate the effect of the independent variables on the dependent variable. It was found that Income diversification has no significant effect on the return on assets of industrial goods companies in Nigeria. Also the study revealed that business segment diversification has considerable effect on the return on assets of industrial goods companies in Nigeria. It recommends that policy makers should promote policies that encourage listed firms to practice corporate diversification and companies should evaluate their strengths and weaknesses to enable them leverage on the opportunities presented by corporate diversification. Also, parent companies should ensure they are strategic while engaging in business segment diversification strategies. Keywords: Corporate Diversification, Financial Performance, Industrial Goods, Business Environment, Opportunities.