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The Impact of Firm Size on Financial Decision Making in Nigeria

The Impact of Firm Size on Financial Decision Making in Nigeria


The study empirically investigated the impact of firm size on financial decision-making in 30 companies listed on the Nigerian stock exchange with a panel data set spanning the years 2010 to 2020. Total revenue is used as the proxy for firm size, and the total debt to total assets and total assets are used as the proxies for financial decision-making. Consistent with the pecking order theory, the results reveal a significant positive relationship between the size of a firm and financial decision-making in Nigerian firms. The empirical results show that bigger firms make significant financial decisions; bigger firms make better financing and investment decisions.  Return on assets and leverage have positive implications for financial decision-making. As a response, the study proposes that businesses should concentrate on growing their size by increasing turnover and expanding into new markets for existing and new products.

Keywords: Financing Decision Making, Investment-Decision Making, Total Revenue, Pecking Order Theory


Egiyi, Modesta Amaka PhD. | Full PDF