Title: Foreign Direct Investment (Fdi) And Financial Performance Of Firms In Nigeria
Authors: EGBEREGBO HELEN EGUONOMARHO And EHIEDU, Victor C Ph.D
Volume: 9
Issue: 6
Pages: 49-55
Publication Date: 2025/06/28
Abstract:
This study investigates the impact of Foreign Direct Investment (FDI) on the financial performance of firms in Nigeria, focusing on key financial indicators such as Return on Assets (ROA), Return on Equity (ROE), and Net Profit Margin (NPM). Employing a descriptive survey research design, data were collected from a representative sample of firms across critical sectors including oil and gas, telecommunications, manufacturing, and banking. Quantitative data analysis was conducted to examine the relationship between FDI inflows and firm-level financial outcomes, while considering mediating factors such as firm absorptive capacity, infrastructural quality, and macroeconomic stability. Findings reveal that FDI significantly enhances financial performance by improving asset utilization, equity efficiency, and profitability, although these effects vary across sectors and depend on institutional and economic conditions. The study concludes that maximizing the benefits of FDI requires robust institutional frameworks, improved infrastructure, and policies that foster absorptive capacities within firms. It is recommended that Nigerian policymakers implement sector-specific investment incentives, strengthen regulatory environments, and promote skills development to better leverage FDI for sustainable economic growth and enhanced firm performance.