CULTURAL DIVERSITY AND OTHER ENVIRONMENTAL FACTORS ON PERFORMANCE EVALUATION OF INTERNATIONAL COMPANIES IN NIGERIA
Abstract:This study examined the effect of cultural diversity and other environmental factors on performance of international companies in Nigeria; it specifically examined the effect of language differences, social factors as well as economic factors on financial performance of international companies in Nigeria. The study adopted an ex-post-facto research design and secondary data was gathered to analyze the relationship between the variables. The population of the study consisted on twenty-two (22) international manufacturing companies listed on the Nigerian Exchange Group as at 5th March, 2021; however; only eighteen (18) samples were selected from the population through purposive sampling. The data was collected from the annual audited financial reports of the eighteen (18) international manufacturing companies sampled for the investigation for the periods 2000-2020. Panel data was used which consists of 360 observations analyzed using multiple regression model. Robust regression model was used to test the effect of cultural diversity and other environmental factors. The Hausman test result revealed that social factor has positive and significant effect on financial performance with coefficient of 0.1171which is significant at 5% (p=0.041), economic factor has positive and significant effect on financial performance with coefficient of 0.0159 which is significant at 5% (p=0.370) while language difference has negative and insignificant effect on financial performance with coefficient of -0.1181 with (p=0.0490) at 5% level of significance. The study therefore, concluded that cultural diversity and other environmental factor have strong statistical relationship with the performance of the selected international companies in Nigeria. The study recommends among other things that language differences, growth rate, environmental cost, exchange rate and inflation rate are important variables to consider when the management of multinational companies decides to examine the effect of cultural diversity and other environmental factor on performance evaluation in Nigeria.