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Unlocking Entrepreneurial Success Through Earnings Retention in Nigerian Service Firms

Kelvin Chukwuka Ibobo, Gilbert Ogechukwu Nworie, ., Clara Chika Anugwu PhD, .

Abstract

This study examined the effect of earnings retention on entrepreneurial success in Nigerian listed service firms. The study adopted an ex-post facto research design, using a population of twenty-two listed service firms and a sample size of sixteen firms selected through purposive sampling for the period 2015 to 2024. Data were collected from audited annual reports and financial statements of the selected firms. Panel data regression analysis was employed, and the Hausman test indicated that the random effect model was most appropriate for hypothesis testing. The finding revealed that earnings retention had a significant positive effect on entrepreneurial success measured by earnings after tax (β = 0.076860, p = 0.0000). Thus, retained earnings play a key role in enhancing firm performance in the service sector. It was therefore recommended that management of listed service firms in Nigeria should strengthen their earnings retention practices by consistently retaining a portion of annual profits and channeling them into productive areas such as service improvement, technology upgrades, and staff development in order to sustain higher earnings after tax.

Keywords

Entrepreneurial SuccessEarnings RetentionNigerian Service Firms

References

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