The subject of financial performance has received significant attention from scholars ( Kaguri, 2013). Industry and corporate specific factors have been shown to be significant determinants of corporate performance ( Oyebanji, 2015 Rajkumar, 2014 Akinyomi, 2013 Akintoye, 2008). The attributes of a firm’s physical, human and organizational capital enable the firm conceive of and implement strategies that improve its efficiency and effectiveness ( Barney, 1991). According to the resource-based view (RBV), the internal attributes of an organization determine its position in the competitive environment ( Denizel and Özdemir, 2006). However, the performance of a firm is not affected by macroeconomic factors. In most developing countries, for instance Nigeria, macroeconomic factors, such as hyperinflation and increasing exchange rates, are some of the factors affecting the performance of manufacturing firms ( Owolabi, 2017). Also, increases in the nominal interest rate and inflation rate intensify the aggregate rates of failure or default ( Robson, 1996 Davis, 1995 Wadhwani, 1986). Fiscal policies affect a firm’s after tax net cash flow, its cost of capital, and potentially the demand for its products, and survival ( Zeitun et al., 2007). And presently, the recession witnessed in Nigeria, which business analysts opined that led to the delisting of some companies, has brought to limelight the implications of macroeconomic factors on corporate performance ( Zeitun et al., 2007).įor instance, the monetary policy of a country affects all sectors through the cost of debt and the availability of money/credit, which could affect a firm’s ability to access external sources of fund. This was evidenced from the crises in Latin America, East Asia, Russia and the global financial crisis in 2007 ( Issah and Antwi, 2017). While micro factors are within the control of management, the macro factors are beyond the control of management ( Dioha et al., 2018). macro) can pose a positive or negative threat to the performance of a firm. Key economic factors include the Consumer Price Index (CPI), unemployment, gross domestic product (GDP), stock market index, corporate tax rate and interest rates ( World Bank Group, 2015 Broadstock et al., 2011). Macroeconomic factors exist outside the company and not under the control of management they include social, environmental, political conditions, suppliers, competitors, government regulations and policies ( Adidu and Olanye, 2006). Microeconomic factors exist within the company and under the control of management they include product, organizational culture, leadership, manufacturing (quality), demand and factors of production ( Broadstock et al., 2011 Adidu and Olanye, 2006). Micro and macroeconomic factors affect the performance of a firm.
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