Firm Characteristics and Corporate Donations of Oil and Gas Sector in Nigeria
- Post by: airjournals
- September 30, 2021
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ABSTRACT
This study empirically investigated the relationship between firm characteristics and corporate donations of oil and gas sector in Nigeria. It covered ten (10) years period (2011-2020), with the target variables being firm size, firm leverage, and liquidity ratio on corporate donations of the firms. The study adopted ex-post facto research design and employed panel fully Modified Ordinary Least Squares (FMOLS) regression analysis technique considering the unit root test (Levin, Lin & Chu t* approach), Jarque-Bera test of normality of data series, and Pedroni Residual panel cointegration test. Result of the FMOLS showed that firm characteristics operationalized by firm size [Log (FS)], firm leverage [Log(FL)], and liquidity ratio [Log(LR)] play supportive (positive) roles in corporate donations of oil and gas firms in Nigeria. Particularly, the result revealed that firm size has negative but insignificant effect, while firm leverage and liquidity ratio have positive and insignificant effect. The implication of the finding is that increases in firm size at control of leverage and liquidity ratio discourages corporate donations in oil and gas firms in Nigeria, while appreciation of either firm leverage or liquidity ratio in control of other variables in the model motivates corporate donations in the oil and gas sector in Nigeria. However, it is suggested that Nigerian oil and gas sector should be properly educated on the relevance of community donations and charitable activities for increased financial growth and productivity. They should maintain effective financial leverage and work towards retaining liquidity through holding assets that could be shifted or sold quickly with minimum transaction cost and loss in value. This will go a long way in promoting their day to day operations and overall financial performance.
Keywords: Fully Modified Ordinary Least Squares; Firm Characteristics; Corporate Donations; Oil and Gas
Authorship
IGWEONYIA, Obiageli Virginia1; Prof. OKWO, Ifeoma Mary2; and Prof. NWOHA, Chike3