EARNED STAFF COST AND FINANCIAL PERFORMANCE: A MODERATING ROLE OF FIRM SIZE OF LISTED PHARMACEUTICAL COMPANIES IN NIGERIA

Abstract

This study examined the relationship between earned staff cost and financial performance of listed pharmaceutical companies in Nigeria. The study employed correlation research design and an ex-post facto research design for the study with population of 14 listed pharmaceutical companies in Nigeria, with a sample size of six (6) listed pharmaceutical firms listed in the Nigerian Stock Exchange. The data were sourced for the period of 2000-2017. Pearson Product Moment Correlation and Linear Regression were used to answer the research questions, while Ordinary Least Square and Two-stage Least Square were used to test the null hypotheses at the 0.05 level of significance. The study found that there is a significant relationship between earned staff cost and net profit in listed pharmaceutical companies in Nigeria. The study concluded that the global demands of information on the financial performance of firms make it imperative for pharmaceutical companies and other corporate bodies to include human capital cost as part of the assets of the organization. Based on the findings of the study, it is recommended among others, that there should be constant training, retraining and development of employees of pharmaceutical companies in Nigeria. Also, Pharmaceutical companies in Nigeria should pay more attention in earned staff cost of their staff to enhance firm’s performance, and finally, the management should make policies that will boost return on equity since this will invariably affect investor’s interest.