https://www.cijds.calebuniversity.edu.ng/

Abstract

In today’s dynamic and competitive business environment, solvency is a critical success factor that strategically enables a firm to structure their resources in meeting their financial obligations on the short, medium and long-term bases. However, the inability of a firm to maintain acceptable level of financial stability threatens its future growth. A company’s inability to sustain robust solvency portends the firm’s sick state that impairs its organic growth rate. Firms’ improper utilization of their unique characteristics as their corporate strategic drivers has given rise to illiquidity causing existential threat among listed firms in Nigeria. This study examines the effect of firms’ characteristics on solvency of selected listed companies in Nigeria. The study adopted ex-post facto research design. The population of the study was 161 listed companies in Nigeria as at 31st December 2020 with a chosen sample size of 111 purposively determined. Secondary data extracted from the published audited financial statements covering a 10-year period (2011–2020) were used for the study. Descriptive and inferential (multiple regression) statistics were employed to analyze the data. Findings revealed that corporate strategic drivers had joint significant effects on short-term solvency and long-term solvency. The study concludes that corporate strategic drivers exert significant influence on solvency of listed firms in Nigeria. The study recommends that firms should continue to utilize their corporate strategic characteristics to drive their short-term and long-term solvency statuses. Keywords: Corporate Strategic Drivers, Financial strategy, Firms’ Characteristics, Long-term solvency, Short-term solvency