Inflation, Exchange Rate, and Financial Performance of Listed Oil and Gas Firms in Nigeria
The economic performance of Nigeria is dependent on oil and gas (O&G), and thus poor performance of this sector is of great concern. However, the firms are exposed to performance risks as a result of macroeconomic factors, mostly inflation (INFL) and fluctuations of the exchange rates (EXR), which influence profitability. The main objective of this study is to investigate the effects of INFL and EXR on the financial performance (FP) of listed O&G firms in Nigeria over ten years. The study used an ex post facto research design in panel data regression analysis with a Hausman selection test to obtain the effects of INFL and EXR on FP, proxied by return on equity (ROE), return on assets (ROA), and earnings per share (EPS) of the firms. The outcomes of the study depict that INFL affects the FP of the listed O&G measured in three models, which include ROE, ROA, and EPS in a negative but insignificant way. EXR was shown to have a negative, but insignificant, effect on ROE and ROA. Nevertheless, EXR has a direct statistically significant effect on EPS. The study concluded that EXR has a significant effect on the EPS of listed O&G firms in Nigeria. The O&G companies are advised to maximize foreign-denominated transactions and revenue streams in a foreign market to promote earnings per share and investors' confidence. Keywords: Earnings per share, exchange rate, inflation rate, return on assets, return on equity.
Keywords: Keywords: Earnings per share, exchange rate, inflation rate, return on assets, return on equity.
Citation: Aderibigbe, A.A., Tonade, A.M.A., Oyebanjo, O.A., & Edun, K.O. (2025). Inflation, Exchange Rate, and Financial Performance of Listed Oil and Gas Firms in Nigeria. International Journal of Innovative Research in Accounting and Sustainability, 10(3), 17-27.