Determinants of Investments Opportunities in Selected Manufacturing Companies in Nigeria

Abstract

In corporate finance, the efficiency of both capital and financial market is linked with the investments behavior of investors. Investments opportunity in a firm is associated with the level of leverage, growth and the size of the firm and are of interest to market participants and researchers. This study is designed to examine how firm-level specific factors determine investments opportunities as there are absence of empirical literature in respect of the determinants of investments opportunities in Nigeria. This constitutes the gap that this study intends to fill, using some selected manufacturing companies. This study adopted correlation research design to examine the determinants of investments opportunities of selected listed manufacturing firms using panel regression technique of data analysis. The study found that leverage, and firm liquidity have significant positive impact on the investments opportunities in the selected manufacturing firms. On the other hand, the study concludes that firm growth has significant negative effects on the investments opportunities of the selected firms. The study concludes that leverage, liquidity and firm growth are significant determinants of investments opportunities in the selected manufacturing firms in Nigeria. The study recommends that the investors should consider firms with optimal leverage, higher liquidity position and revenue growth when making investments in the manufacturing companies in Nigeria. Managements of the listed manufacturing firms in Nigeria should try and achieve an optimal leverage position of their firms so as to enhance investments of the shareholders.