Paper Title
FIRMS EFFICIENCY AND FINANCIAL LEVERAGE OF THE LISTED CONSUMER GOODS COMPANIES IN NIGERIA, 2011-2021

Abstract
Abstract - There is an ongoing discussion in academic parlance on whether efficiency firms use more leverage or not. While there have been limited studies in this area in Nigeria, attention has been given to it in other countries. In Nigeria, there is less use of debt in financing consumer goods firms, and at the same time, the efficiency of these firms has been low. Could this be due to a lack of long-term financing? It was against this background that this study was carried out to examine the effects of firm efficiency on the financing leverage of listed consumer goods companies in Nigeria within a temporal scope of – 2021.On the threshold of the efficiency-risk hypothesis, the study split firm efficiency into production efficiency (PRE), operating efficiency (OPE), and price earnings efficiency (PEE), which are respectively represented by the input-out ratio (IOR), operating profit margin (OPM), and price-earnings ratio (PER). It also used the debt-equity ratio (DER) as the main proxy for leverage, while taxation and corporate social responsibility were control variables. Cross-sectional data were extracted from the financial statements of all the 17 listed consumer goods companies in Nigeria. For endogeneity's sake, the main estimation techniques were the generalised method of moment (where firm efficiency served as the independent variable), while the supporting techniques were panel co-integration and the Granger causality test. The study found that firm efficiency exerted negative effects on leverage with coefficients of -0.0166 (PRE), -0.0124 (OPE), and -0.0097 (PEE), with significance for OPE and PEE (respective p-values of 0.9563, 0.0000, and 0.0000). It was concluded that the efficiency of industrial firms in Nigeria is low enough to accommodate debt financing the operation of the firms. The study recommends, among others, that the management of these firms employ intensive growth strategies (product development, market penetration, and market development) to improve their efficiency levels. This would increase their capacity to accommodate more debt for the growth of the firm in the long run. Keywords - Firm Efficiency, Financial Leverage, Efficiency Risk Hypothesis, Industrial Firms