Finance Option and Growth Prospect of Production Based Firms in Nigeria: A Post-Financial Crisis Analysis

Abstract

Purpose: Firms' funding strategies have grown more fluid and unpredictable since the global financial crisis of 2007, particularly for developing nations like Nigeria. This research looked at the years 2010–2022, after the financial crisis, to see how different types of financing affected the expansion opportunities for production-based businesses in Nigeria. In particular, the research looked at how different types of financing—equity, debt, and retained earnings—impacted the expansion of assets for Nigerian production-based businesses. Design/Methodology/Approach: A panel regression estimate was used to evaluate the data gathered from the financial accounts of fifteen production-based enterprises. Findings: The most effective and reliable estimate, which was a random effect, showed that total equity had a positive and statistically significant influence on asset growth rate. Asset growth rates were negatively and insignificantly affected by total debt and retained earnings, according to the result. Compared to the internal option (retained earnings), this study found that the external source of finance option—particularly equity—has a strong propensity to accelerate the rate of expansion of a production-based corporation in Nigeria. Original/Value: A post-financial analysis of production-based enterprises is the innovative aspect of the study that aligns with Pecking Order Theory's postulates about the relationship between finance and economic prospects in developing nations like Nigeria. Practical implications: Consequently, producing organizations should include whole equity in their financing options for growth enhancement rather than seeing it as a last resort.