Firm-Specific Determinants of Financial Performance: Evidence from Multinational Companies in Nigeria

This study investigates the firm-specific determinants of financial performance among multinational companies (MNCs) operating in Nigeria. Specifically, it examines the influence of thin capitalization, firm size, leverage, and effective tax rate on the financial performance of these firms, measured by Return on Invested Capital (ROIC). Employing an ex-post facto research design, the study analyzed panel data from 20 listed multinational companies covering the period 2013 to 2022. Using ordinary least squares (OLS) regression and correlation analysis, the findings reveal that leverage and effective tax rate have significant positive impacts on ROIC, while firm size has a significant negative effect. Thin capitalization, though positively related to ROIC, did not exhibit a statistically significant influence. The results suggest that financial performance is more strongly shaped by internal capital structuring and profitability-linked tax obligations than by aggressive debt-equity arrangements alone. The study contributes to the literature on multinational capital structure and performance and recommends regulatory reform, optimal debt management, and stronger tax transparency frameworks.