The Effect of the Industrial Sector on Firms� Performance in a Multi-Cultural Economy

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Author	Olokoyo, Felicia Omowunmi
ISSN	2225-7217
On Pages	26-32
Volume No.	1
Issue No.	1
Issue Date	February 01, 2020
Publishing Date	February 01, 2020
Keywords	Multicultural economy, Firm performance, Industrial sector, Economic policies

Abstract

This paper presents empirical findings on the impact of the industrial sector on the performance of firms in a culturally diverse nation like Nigeria. The main objective of the study is to determine the overall effect of the industry in which a firm operates in a multicultural economy on its performance. The study opines that the cultural diversity of the Nigerian citizenry could determine to an extent the performance of a given firm in an industry and how the national economic policies affect its operation. It examines the relationship that exist between the industrial sector of quoted firms in Nigeria and their return on assets (as an accounting performance measure) and Tobin�s Q (as a market performance measure). The study employed panel data analysis using the Random Effect Model which is best suited for the data set, since there is need to control for the effect of the industrial sector on firms� performance. The study shows that the industrial sector dummy variables are not significantly related to the accounting measure of performance (ROA) but have a significant relationship with the market performance (Tobin�s Q). The study concludes that regardless of the diverse cultural citizenship values in Nigeria, there is presence of the industrial sector in the economy. The study therefore recommends that Nigerian firms should strive to match their high market performance with real internal activities/operations that would reflect or rub-off on their internal growth and accounting performance.

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