EFFECT OF ARTIFICIAL INTELLIGENCE ON THE FINANCIAL PERFORMANCE OF LISTED MANUFACTURING COMPANIES IN NIGERIA

Abstract

This study examined the effect of Artificial Intelligence on the financial performance of listed manufacturing companies in Nigeria, with focus on Machine Learning Automation (MLA) and Robotic Process Automation (RPA). Return on Assets (ROA) and Return on Capital (ROC) were used as measures of financial performance. The study was motivated by the growing adoption of artificial intelligence technologies by manufacturing firms and the limited empirical evidence on their financial implications within the Nigerian manufacturing sector. Panel regression analysis was employed using data obtained from the annual reports and accounts of sampled listed manufacturing companies. The findings revealed that Machine Learning Automation has a significant negative effect on Return on Assets, while Robotic Process Automation has a significant positive effect on Return on Assets. Furthermore, Machine Learning Automation was found to have a negative but insignificant effect on Return on Capital, whereas Robotic Process Automation had a significant negative effect on Return on Capital. The results indicate that the financial effects of artificial intelligence are mixed and depend on the type of technology deployed and the performance indicator considered. The study concludes that although AI adoption offers opportunities for operational improvement, its financial benefits may be constrained by high implementation costs, inadequate technical expertise, infrastructural limitations and difficulties associated with organizational integration. The study recommends strategic implementation of AI, increased investment in employee training and digital skills, and greater emphasis on RPA in operational processes where it can improve efficiency and asset utilization.