IIARD International Institute of Academic Research and Development

INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL MANAGEMENT (IJEFM )

E-ISSN 2545-5966
P-ISSN 2695-1932
VOL. 8 NO. 5 2023
10.56201/ijefm.v8.no5.2023.pg9-32

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Security Cost and Financial Performance of Selected Oil and Gas Firms in Nigeria

Davies, Stanley Diepiriye (FCA)

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Abstract

The study investigated the effect of security cost on the financial performance of quoted oil and gas firms in Nigeria. The objective was to examine the extent to which security cost affect corporate financial performance. The study adopted ex-post facto research design. Stratified and random sampling methods were used to select 10 out of the existing oil and gas firms. Secondary data were obtained from the Central Bank of Nigeria publications and financial statement of the quoted oil and gas firms. Return on equity, return on assets and net profit margin were used as dependent variables while corporate security cost and public security cost were used as independent variables. Diagnostic tests were conducted using Hausman specification test. Fixed effects estimator was employed and regression analysis to test the formulated hypotheses. The study established that 63.8 percent variation in return on equity of the oil and gas firms were explained by variation in the independent variables while corporate security have positive and significant effect on return on equity while public security cost have positive but no significant effect on return on equity. 74 percent variation in return on assets of the oil and gas firms was explained by variation in the independent variables. Corporate security have positive and significant effect on return on assets while public security cost have positive but no significant effect on return on assets. 25 percent variation in net profit margin of the oil and gas firms was explained by variation in the independent variables. Corporate security have negative and significant effect on net profit margin while public security cost have positive but no significant effect on net profit margin. From the findings, the study conclude that security cost have greeter effect on return assets, return on equity than net profit margin. The study recommends that corporate and public cost on security should be advanced to increase financial performance

keywords:

Security Cost, Financial Performance, Oil and Gas, Corporate Security Cost, Public Security Cost

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