Effect of Cost Control on Corporate Performance: Evidence from Selected Listed Brewery Firms in Nigeria

Abstract

The main objective of this study is to determine the effect of cost control on corporate performance of listed brewery firms in Nigeria for the period of 2011 to 2021. To achieve this objective, material cost (MATC), labour cost (LABC) and overhead cost (OHDC) were used as proxy for cost control while the return on assets (ROA) was used as the proxy for the dependent variable, corporate performance. The study adopted ex post facto design and the data was obtained from the sampled firms’ annual reports and World Bank annual data official publications. The study was anchored on the Kaizen Costing Theory. The ordinary least square (OLS) regression technique was employed to analyze the data and test the hypotheses formulated at 5% level of significance. The findings revealed that cost control proxies such as material cost and overheads have positive and significant impact on corporate performance of brewery firms in Nigeria while labour cost has positive and insignificant impact on corporate performance of brewery firms in Nigeria. The study concluded that the elements of cost control used in the study such as material cost and overheads have positive and significant impact on corporate performance while labour cost has positive and insignificant impact on corporate performance of brewery firms in Nigeria. The study therefore recommends among other things that the management of brewery firms in Nigeria should embark on cost control strategies that emphasized on material cost, labour cost and overheads reduction in order to improve on their corporate performance indices.