Climate Variability and Financial Performance of Agro-Allied Firms in Nigeria

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Authors: OLURIN, Enitan Olurotimi (Ph.D.), OLAOYE, Babatunde Johnson

Abstract

This study investigates the effect of climate change on the financial performance of agro-allied firms in Nigeria, focusing on Return on Assets (ROA) and Share Price (SP) as financial indicators. Using a panel data analysis covering five listed firms between 2010 and 2022, the study examines the influence of climate variables, rainfall, temperature, and carbon emissions, while controlling for firm-specific factors such as firm size, age, leverage, and turnover on Share Price and Return on Assets. Findings reveal that climate variables do not have a statistically significant effect on the financial performance of the agro-allied firms in indicating that firm-specific characteristics drive financial resilience more than environmental factors in the short run. The study concludes that although the short-term impacts of climate variability are minimal, firms should persist in enhancing their climate adaptation strategies to safeguard long-term sustainability . Policymakers are advised to support agro-allied firms with climate-resilient infrastructure and financial instruments.

Keywords: Climate Change, Financial Performance, Agro-Allied Firms, Return on Assets, Share Price, Nigeria

2024 - NIJAF - 16 - 211 OLURIN & OLAOYE 186-203.pdf

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