Firm-Specific Attributes and Share Price Volatility of Listed Industrial Goods Firms in Nigeria

This study examined the influence of firm specific attributes on share price volatility by obtaining empirical evidence from firms listed in the industrial goods sector in the Nigerian Exchange. Share price volatility was measured with reference to percentage changes in share prices for the study period (from 2014 to 2024) whereas, the specific attributes of firms analysed in this study were measures of financial leverage, profitability, and liquidity. Based on the ex-post facto research design, the study adopted the Generalized Method of Moments (GMM) model to analyse the study’s data. Results from the analytical process indicate that financial leverage exerts negative but statistically insignificant effect on share price volatility (β = -0.170778, p = 0.5879), suggesting that financial leverage does not have significant influence on share price volatility. Also, profitability evinced a positive but statistically insignificant association with share price volatility (β = 0.449844, p = 0.4613), indicating that more profitable firms may experience moderate fluctuations in their share prices. Similarly, liquidity exhibits an insignificant positive effect on share price volatility (β = -0.006460, p = 0.7690). Based on these findings, the recommendation is that firms’ executives should adopt prudent financial policies, including maintaining optimal leverage levels, to bolster investor confidence and support market stability. Investors should closely monitor profitability indicators, as increases may signal impending share price volatility and associated risks or opportunities. Additionally, regulatory authorities are encouraged to develop reporting standards that emphasize the volatility implications of profitability to aid market participants’ decision-making. This study contributes to the empirical literature by employing the GMM methodology, thus enriching the methodological diversity in volatility research within the Nigerian context.