Cash Flow Management and Firm Performance: Moderating Effect of Corporate Governance Mechanism in the Era of Disruption in Emerging Economy

Abstract

The moderating effect of corporate governance mechanism on the relationship between cash flow management and performance of listed manufacturing firms in the era of disruption in Nigeria was empirically investigated in this study. Operating, financing, and investing activities were used as proxies for cash flow management. Net assets per share (NAPS) was used to measure firm performance while board independence was used as a proxy for the corporate governance mechanism (moderating variable). Panel least squares regression model operated with E-View 12 was utilized to perform the statistical test of parameter estimates, and six hypotheses were formulated to direct the investigation. Ex Post Facto design was used, and the data for the study was collected from the published annual financial reports and accounts of companies listed on the Nigerian Exchange Group (NGX) under the consumer goods sector, industrial goods sector, and oil and gas sector. The results of the study show that operating activities (OA) significantly affect firm performance (NAPS) at 5% significant level. Furthermore, it was discovered that, at 1% significant level, financing activities (FA) has a positive and significant effect on firm performance, whereas investing activities (FA) has the same effect on firm performance in Nigeria. Also, it was noted that, at 1-5% significant level, corporate governance mechanism (board independence) moderated the effect of cash flow management on firm performance in Nigeria. Thus, the study concludes that in this disruptive era in Nigeria, firms’ performance is determined by their ability to manage their cash flow effectively. Moreover, strong corporate governance practices ensure the success of the company. In light of the study's findings, the study recommends that businesses should review their approaches to managing cash flow so that they can produce enough cash to cover both their operating and investing needs. On the other hand, net cash flow from financing activities ought to be preserved because it has a substantial impact on the financial results of the Nigerian listed companies.

The Impact of Sustainability Practices on the Financial Performance of Listed Companies in Saudi Arabia

“…By embracing sustainable practices, the country aims to promote sustainable practices across different sectors as part of Vision 2030, environmental protection, economic diversification, and social well-being. The findings of this research should contribute to the literature by defining whether sustainability practices of Saudi listed firms affect their performance and help in achieving the required above mentioned goals [4,5,6]. Second, Saudi market is an evolving one with high dependence on oil.…”