MODERATING EFFECT OF FIRM SIZE ON HUMAN CAPITAL COSTS AND FINANCIAL PERFORMANCE OF LISTED AGRICULTURAL COMPANIES IN NIGERIA

Abstract

This study determined the effect of human capital costs on financial performance of listed agricultural companies in Nigeria. The study employed an ex-post facto research design. The study population was five (5) listed agricultural companies on the Nigerian Exchange Group (NGX). A sample size of five (5) agricultural companies was used, using a census sampling technique covering ten years (2014 to 2023). The data used in this study were secondary, sourced from annual reports and statement of accounts of the five selected firms between 2014 and 2023. The method of data analysis was descriptive statistic, unit root test, diagnostics test and panel least square (PLS) with the help of E-view v12 while moderated multiple regression (MMR) analysis was employed for the purpose of moderating effect with the help of SPSS. The findings showed that staff training costs has positive and insignificant effect on earnings per share, health and safety costs has positive and insignificant effect on earnings per share, staff salaries and wages costs has negative and significant effect on earnings per share, staff gratuity costs has positive and insignificant effect on earnings per share of listed agricultural companies in Nigeria. Furthermore, firm size has positive and significant interacting effect on the relationship between human capital costs and return on assets of listed agricultural companies in Nigeria. The study generally concluded that the effect of human capital costs on financial performance of listed agricultural companies in Nigeria is statistically insignificant for the period spanning from 2014 – 2023. It was suggested amongst others that agricultural companies in Nigeria should reduce the amount spend on staff training because it caused decrease in their returns in terms of earnings per share and overall performance of the firms.