Impact of Asset Structure on Corporate Firm Performance: Evidence from Nigerian Manufacturing Firms

The Nigerian manufacturing sector, despite its substantial contribution to the Nigeria’s gross domestic product, faces persistent challenges in achieving optimal performance. One key factor influencing this performance is how firms manage their asset structure. While existing research has explored relationship between asset structure and performance in developed economies, limited attention has been given to specific context of emerging markets like Nigeria. Hence, this study addressed this gap by investigating asset structure impacts on corporate performance of Nigerian manufacturing firms. Data collections were from 2011 to 2020 on annual reports of firms listed on Nigerian Exchange Group (NGX). Descriptive statistics, correlation, Multiple Regression analysis, Instrumental variable (IV) GMM analysis including multicollinearity and heteroscedasticity tests were employed. Study findings reveal that: non-current assets ratio positively influences performance in low leveraged firms while showing no significant effect on high levered firms; contrary to low levered firms, fixed asset ratio has passive influence on corporate performance of high levered firms; intangible assets ratio negatively affects both market valuation and profitability of low leveraged firms but with no significant influence on high leveraged firms; customer asset intensity ratio positively affects market valuation while showing no significant effect on profitability of low leveraged firms, but does not significantly impact either measure in high leveraged firms; current assets ratio also demonstrates negative effect on market valuation of high leveraged firms while positively impacting on profitability of same group. Conversely, low leveraged firms show no effect on market valuation while showing strong effect on profitability from current assets.