Asset Structure on Economic Value Added of Listed Industrial Companies In Nigeria

Abstract

Companies are faced with financial problems which compel them to
respond by adopting different financial strategies. Many companies
that have gone through Mergers and acquisitions are pursuing to
enhance synergy and increase assets for production, downsize and
merge certain activities to increase innovation aimed at enhancing
operational efficiency for growth prospects. Nonetheless, business
organizations are advancing their operations and becoming
competitive, posing a great threat to the growth of the market. As a
result, asset structure is noted to be a good strategy to advance
efficient economic value-added policies. This study examines the effect
of asset structure on the economic value added of listed industrial
companies in Nigeria. The study used data from 12out of 13
judgmentally selected companies (2014-2020) listed on the Nigerian
Exchange Group. Data collected is analyzed using panel regression
analysis; the study concludes that asset structure has a positive
relationship with the economic value added of listed industrial goods
companies in Nigeria. Amongst the assets structure, non-current assets
and current assets both have a significant effect on economic value
added, while the intangible asset has an insignificant effect on the
economic value added of listed industrial goods companies in Nigeria.
Thus, it is recommended that the firm's asset structure be monitored
and evaluated on a regular basis by the respective company
management to ensure that the composition meets the strategic
requirements of the firm in order to increase the economic value added
by listed industrial goods companies in Nigeria. Also, Managers of all
firms should increase their allocation of resources towards long-term
investments and funds, which would be intangible assets, in order to
improve on their overall economic value added to the company.
KEYWORDS: Non-current asset, current asset, intangible
asset and economic value added.