FIRM ATTRIBUTES AND LEASE FINANCING OF MANUFACTURING COMPANIES IN NIGERIA

Abstract

The quest for good financial management strategy is not contestable because every business needs dependable cash flow to grow and this has necessitated the quest for strategies to reduce cost of operations. This cost of operation can be reduced by outsourcing or leasing the non-current asset as against outright purchase.  The main objective of the study is to assess the influence of firm attributes on lease financing of manufacturing companies in Nigeria. This study used data from secondary sources and adopted the Ex-post Facto research design.

The study covered the manufacturing companies in Nigeria for the period, 2013 – 2020. The population of the study consist of 33 listed manufacturing companies from the consumer goods sector. The sample size was thirty (30) listed manufacturing companies on the Nigerian Stock Exchange. Descriptive statistics and multiple regression analysis were used in order to ascertain the influence of the dependent (lease finance) on the independent variables (firm size, profitability, capital structure and liquidity) specified in the model.

Results showed a positive as well as a negative association between each of the identified determinants with the lease financing decision of the manufacturing companies. Based on the findings of the study, the following recommendations were raised; Management of the manufacturing firms should continue to increase its size through lease as these contributes significantly to their growth.