Impact of firm size, firm age on the profitability of listed consumer goods firms in Nigeria
DOI:
https://doi.org/10.33003/fujafr-2026.v4i1.293.104-117Keywords:
Age, Size, Asset, Equity, NigeriaAbstract
Purpose: This study investigates the impact of firm size and firm age on the profitability of listed consumer goods firms in Nigeria.
Methodology: The study utilizes panel data covering 13 years (2010–2022) obtained from the annual reports of consumer goods firms listed on the Nigerian Exchange Group and employs regression analysis to examine the effects of Firm Size (FS) and Firm Age (FA) on profitability measured by Return on Equity (ROE) and Return on Assets (ROA).
Results and conclusion: The regression results show that the overall model is statistically significant for ROE but not significant for ROA, while firm Size does not exhibit a statistically significant relationship with profitability; firm age demonstrates a statistically significant negative relationship.
Implication of findings: It indicates that older firms tend to experience lower profitability, possibly due to rigidity and reduced adaptive capacity over time. The findings imply that stakeholders should not rely solely on firm size and age in assessing profitability but should also consider operational efficiency, industry dynamics, management effectiveness, capital structure, financial ratios, and prevailing market conditions, while future studies are encouraged to incorporate broader variables and larger samples to generate more comprehensive insights.
References
Akben-Selcuk, E. (2016). Does firm age affect profitability? Evidence from turkey. International Journal of Economic Sciences, 5(3), 1-9. DOI: https://doi.org/10.20472/ES.2016.5.3.001
Akram, T., Farooq, M. U., Akram, H., Ahad, A., & Numan, M. (2021). The Impact of Firm Size on Profitability–A Study on the Top 10 Cement Companies of Pakistan. Jurnal Aplikasi Manajemen, Ekonomi Dan Bisnis, 6(1), 14-24. DOI: https://doi.org/10.51263/jameb.v6i1.137
Barango-Tariah, M. U., & Oguru, P. G. (2024). The Future of Marketing Opportunities in Nigeria's Economic Development. BW Academic Journal, 1(3), 31-37.
Benali, W. (2025). Effects of CSR, company size, and company age on financial performance: firms listed on the Tunisian stock exchange. SN Business & Economics, 5(7), 80. DOI: https://doi.org/10.1007/s43546-025-00851-6
Dan Perbankan, J. K. (2021). The impact of firm size, leverage, firm age, media visibility and profitability on sustainability report disclosure. Jurnal Keuangan dan Perbankan, 25(1), 36-47. DOI: https://doi.org/10.26905/jkdp.v25i1.4941
Goddard, J., Tavakoli, M., & Wilson, J. O. (2005). Determinants of profitability in European manufacturing and services: evidence from a dynamic panel model. Applied Financial Economics, 15(18), 1269-1282. DOI: https://doi.org/10.1080/09603100500387139
Hongli, J., Ajorsu, E. S., & Bakpa, E. K. (2019). The effect of liquidity and financial leverage on firm performance: Evidence from listed manufacturing firms on the Ghana stock exchange. Research Journal of Finance and Accounting, 10(8), 91-100.
Jamil, P. C., Nur, N. M., & Sianturi, R. S. M. (2024). Exploring the Impact of Female Leadership, Company Size, and Age on Financial Performance in Indonesia's Real Estate and Property Industry. INVEST: Jurnal Inovasi Bisnis dan Akuntansi, 5(2), 465-471.
Kharatyan, D., Nunes, A., & Lopes, J. (2016). Financial ratios and indicators that determine return on equity. XVII–Encuentro AECA.
Loderer, C. F., & Waelchli, U. (2010). Firm age and performance. Available at SSRN 1342248. DOI: https://doi.org/10.2139/ssrn.1342248
Mayranti, A. (2023, January). The Influence of Firm Size and Firm Age on Financial Performance. In Bandung Conference Series: Accountancy (Vol. 3, No. 1, pp. 177-184). DOI: https://doi.org/10.29313/bcsa.v3i1.6030
Monoarfa, R. (2018). The role of profitability in mediating the effect of dividend policy and company size on company value. Business and Management Studies, 4(2), 35. DOI: https://doi.org/10.11114/bms.v4i2.3274
Negash, Y. A., & Rezene, K. K. (2025). Impact of firm’s age and size on it’s financial performance: a case study of restaurants on Eritrea-Asmara city. International Journal of Economics, Business and Social Science Research, 3(4), 01-39. DOI: https://doi.org/10.37602/IJEBSSR.2025.3401
Oshim, J. C., & Igwe, A. O. (2024). Corporate governance and financial performance of listed consumer goods firms in Nigeria. International Journal of Business and Management Review, 12(1), 96-115. DOI: https://doi.org/10.37745/ijbmr.2013/vol12n196115
Rafiq, S., Salim, R., & Smyth, R. (2016). The moderating role of firm age in the relationship between R&D expenditure and financial performance: Evidence from Chinese and US mining firms. Economic Modelling, 56, 122-132. DOI: https://doi.org/10.1016/j.econmod.2016.04.003
Rahman, J. M., & Yilun, L. (2021). Firm size, firm age, and firm profitability: evidence from China. Journal of Accounting, Business and Management, 28(1), 101-115. DOI: https://doi.org/10.31966/jabminternational.v28i1.829
Rahman, J. M., & Yilun, L. (2021). Firm size, firm age, and firm profitability: evidence from China. Journal of Accounting, Business and Management, 28(1), 101-115. DOI: https://doi.org/10.31966/jabminternational.v28i1.829
Serrasqueiro, Z., & Nunes, P. M. (2008). Performance and size: empirical evidence from Portuguese SMEs. Small Business Economics, 31(2), 195-217. DOI: https://doi.org/10.1007/s11187-007-9092-8
Simanjuntak, O. T. W., Suripto, S., Wardianto, K. B., & Mulkhan, U. M. (2022). The effect of firm age, firm size on financial performance with financial inclusion as intervening variable: Study on the go public banking sector in Indonesia for the 2015-2020 period. International Journal of Advanced Multidisciplinary Research and Studies, 2(3), 607-615.
Singh, et al, (2024). Defining Return on Assets (ROA) in empirical corporate finance research: a critical review. Empirical Economics Letters.
Wanyonyi, E., Mulili, B., Kirori, G., Njagi, B., & Macheru, J. (2023). Moderating Effects of Firm Size and Age on The Relationship Between Celebrity Chief Executive Officer Characteristics and Firm Financial Performance. Journal of African Interdisciplinary Studies, 7(8), 23-47.
Younis, H., & Sundarakani, B. (2020). The impact of firm size, firm age and environmental management certification on the relationship between green supply chain practices and corporate performance. Benchmarking: An International Journal, 27(1), 319-346. DOI: https://doi.org/10.1108/BIJ-11-2018-0363
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Muhammad Shehu Garba
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
The FUDMA Journal of Accounting and Finance Research (FUJAFR) operates a copyright policy that ensures a balance between author rights and wide dissemination of scholarly work.
1. Author Copyright Retention
Authors retain full copyright of their published work without restriction. Submission to FUJAFR does not transfer ownership of copyright to the journal.
2. License to Publish
By submitting a manuscript and upon acceptance, authors grant FUJAFR:
- The right to publish, reproduce, and distribute the article
- The right to identify itself as the original publisher of the work
This grant is non-exclusive, meaning authors are free to reuse their work in other contexts, provided proper acknowledgment of the original publication in FUJAFR is made.
3. Licensing of Published Content
All articles are published under the:
Creative Commons Attribution-NonCommercial License (CC BY-NC 4.0)
Under this license:
- Users may share and adapt the work for non-commercial purposes only
- Proper attribution to the author(s) and the journal is required
- Any commercial use requires explicit permission from the copyright holder
4. Author Reuse Rights
Authors are permitted to:
- Archive their published articles in institutional repositories or personal websites
- Share their work for educational and research purposes
- Reuse portions of their work in future publications (e.g., books or other articles), provided proper citation of the original publication is included
5. Third-Party Content
Authors are responsible for obtaining permission to use any third-party copyrighted material (e.g., images, tables, datasets) included in their manuscripts. Proper acknowledgment must be provided where required.
6. Attribution Requirement
All users of FUJAFR content must provide appropriate credit, including:
- Author name(s)
- Article title
- Journal name (FUJAFR)
- Year of publication
