ENVIRONMENTAL COSTS AND FINANCIAL PERFORMANCE OF LISTED FOOD AND BEVERAGE FIRMS IN NIGERIA

Abstract

This study investigated the effect of environmental costs on financial performance of food and beverage firms in Nigeria. The objectives of the study were to ascertain; the effect of waste management costs, health and safety and community development costs respectively on return on capital employed of listed food and beverage firms in Nigeria. The study was anchored on the legitimacy theory. The population of this study was made up of eight (8) listed food and beverage firms on the Nigeria Exchange Group (NGX) and operating in Nigeria as at 1st January, 2013 -to- 31st December, 2022. This study utilized purposive sampling technique to select six (6) listed food and beverage firms in Nigeria because the sampled food and beverage firms have all available and complete panel data. The cross-sections included in the study was six (6) food and beverage firms; sample period included ten (10) years, and total panel observation was sixty (60) spanning through from 2013 to 2022. The data for this study were sourced from the published annual reports and accounts of the sampled food and beverage firms on the Nigeria Exchange Group. The study utilized descriptive statistics, unit root test, diagnostic tests, Hausman Test and Panel Least Square (PLS) regression technique with the help of E-view 12. The study found that, waste management cost has significant effect on return on capital employed, health and safety cost has significant effect on return on capital employed, community development cost has significant effect on return on capital employed of listed food and beverage firms in Nigeria. Based on the foregoing, the study generally concluded that there is a positive and significant effect of environmental costs on financial performance of food and beverage firms in Nigeria for the period 2013 - 2022. The study recommended amongst others that management of listed food and beverage firms in Nigeria should ensure adequate compliance with the guidelines of waste management cost as this portrays a good image of their firm financial performance.