Effect of Electronic Commerce on Financial Performance of Listed Food and Beverage Firms in Nigeria

Authors: LAMBE Isaac, Ph.D; DANIEL, Emmanuel Kayode, PhD; ABALAKA, Eleojo Dorcas
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In recent times and with the development of internet, electronic commerce has been recognized as an instrument for organizing the business model. In applying the e-commerce, the large firms generally face lower financial and infrastructural barriers, while the small to medium enterprises are faced with resource limitations, particularly the financial resources in applying this tool. This study seeks to examine the effect of e-commerce on financial performance of listed food and beverage firms in Nigeria. E-commerce was proxied by business-to-business and business-to-client while financial performance was proxied by return on sales. To achieve these objectives, the study employed sixteen (16) listed food and beverages firms that had consistently published their audited annual financial reports from 2011 to 2021, and analyzed the data using panel multiple regression technique. The study reveals that Business to Business (B2B) ecommerce have positive and insignificant effect on Return on sales (financial performance) while Business to Client (B2C) e-commerce also have positive and insignificant effect on financial performance. The study concluded that substitution effect may exist between the sales by physical channels and e-commerce sales. The study recommends that a strong commitment, which involves both B2B and B2C e-commerce, is needed to obtain financial performance in the short term. Also, companies should jointly adopt B2B and B2C e-commerce to boost performance levels higher than those of their non-adopting counterparts.