FIRMS' FINANCIAL CHARACTERISTICS AND SUSTAINABILITY OF THE NIGERIAN OIL AND GAS INDUSTRY

Abstract

The study appraises the effect of Firms' Financial Characteristics on the Sustainability of the Nigerian Oil and Gas Industry. The specific objectives are to determine the effect of profit after tax on the sustainability and ascertain the effect of firm size on the sustainability Performance of the Nigerian Oil and Gas Industry. An ex-post facto research design was adopted for the study. Quantitative data deployed in validating the formulated hypotheses was sourced from secondary data. The data were extracted from the audited financial statements of the selected Oil and Gas firms, which are listed on the Nigerian Exchange Group (NGX). The study utilized the Pooled Ordinary Least Squares (POLS) regression technique to ascertain the effect of financial variables on the sustainability performance of the Nigerian oil and gas industry. The data were analyzed using E-views 13.0 and STATA 17.0. The result revealed that Profit after tax does not have a significant effect on the Sustainability Performance [β = -0.0496, Prob. = 0.2318>0.05], and Firm size has a significantly positive effect on the Sustainability Performance of the Nigerian Oil and Gas Industry [β = 0.4389, Prob. = 0.0000<0.05]. The study concluded that Firms' Financial Characteristics have a significant effect on the Sustainability of the Nigerian Oil and Gas Industry. The study recommends that firms should improve their profit after tax by embarking on operational efficiency and cost and waste reduction by adopting energy efficient technologies, effective management of water consumption, and minimization of material waste like gas flares to ensure strong profitability that can encourage the activities of sustainability performances.