COST LEADERSHIP STRATEGY AND ECONOMIC PERFORMANCE OF LISTED CONSUMER GOODS FIRMS IN NIGERIA

ABSTRACT This study investigates the effect of cost leadership strategy on the economic performance of listed consumer goods firms in Nigeria, using return on assets (ROA) as a proxy for economic performance. The specific dimensions examined include operational efficiency, economies of scale, and input cost control. Drawing from Porter’s competitive strategy theory, the research adopts an ex-post facto design and analyzes secondary data from audited annual reports of 10 purposively selected firms listed on the Nigerian Exchange Group (NGX) over the period 2018–2024. Panel regression techniques, supported by descriptive statistics, correlation analysis, and diagnostic tests (e.g., VIF, Breusch-Pagan, and Jarque-Bera), were employed to test the hypotheses. The findings reveal that operational efficiency has a significant negative effect on ROA (β = -0.294, p < 0.01), indicating that higher operating expenses erode profitability. Economies of scale exert a positive and significant influence (β = 0.057, p = 0.004), suggesting that larger firms benefit from cost advantages and improved asset utilization. Input cost control also shows a significant negative impact (β = -0.049, p = 0.005), implying that escalating raw material and production costs reduce ROA. The null hypotheses were rejected, confirming the significant effects of these cost leadership components. The study concludes that effective cost management is crucial for enhancing economic performance in Nigeria’s volatile business environment. Recommendations include adopting lean practices, pursuing scale expansion through mergers, and investing in local sourcing to mitigate input cost risks. These insights provide strategic guidance for managers, policymakers, and investors in the consumer goods sector.