Firm-specific Indicators and Firm Value of Quoted Health Firms in Nigeria: a Balanced Panel Methodology
1Ighosewe, Enaibre Felix PhD and 2Ehimatie Stephanie
Delta State University, Department of Accounting, Banking & Finance P.M.B 95075, Asaba Campus, Asaba. P.M.B 95075, Asaba Delta State.
ABSTRACT
This study investigated the firm-specific indicators of firm value of listed healthcare firms in Nigeria using the panel data methodology. The study covered a period of ten (10) years spanning from 2010 to 2019. The regressor is firm-specific indicators measured by investment decisions, dividend decisions, financing decisions, operational efficiency, profitability, and firm size while the regressed is firm value measured by average share price (ASHP) and TOBINQ. Data was collected from the annual reports and accounts of the sampled firms and from Nigeria stock exchange. Based on the Hausman test, Model 1 (ASHP) supports the REM while Model 2 (Tobin Q) supports the FEM. The result revealed that Investment decision has a positive significant impact on ASHP and negative insignificant impact on Tobin Q. Meanwhile, financing decision has a negative statistical significance impact on ASHP and negative insignificant impact on Tobin Q. More so, dividend decision has negative statistical insignificance impact on firm value proxies. Further, operating efficiency decision has positive statistical significance impact on ASHP and negative insignificant impact on Tobin Q. Again, profitability has positive insignificant impact on firm value proxies. Lastly, firm size exerted positively and insignificant impact on average share price and negative significant effect on Tobin Q. Premised on this, we conclude that, firm value is better determined jointly by investment decision, financing decision, dividend decision, profitability, and firm size than when it is examined individually. To this end, we recommend amongst others that for management of listed healthcare firms to enhance their firm value, they must opt for optimal leverage level. Again, investors should ensure that they carefully consider the risk-return maxim before deciding to invest in the Health care sector.
Keywords: Firm-Specific Indicators, Firm Value, Quoted Health Firms, Balanced Panel Methodology