CEO Education and Firm Performance in Nigeria

Abstract

This study investigates the relationship between Chief Executive Officer (CEO) education and firm performance among publicly listed companies in Nigeria. Despite increasing interest in the role of executive characteristics in shaping corporate outcomes, limited empirical evidence exists on how the educational attainment of CEOs influences firm performance in emerging economies such as Nigeria. The primary objective of this research is to assess whether CEOs with higher levels of education, measured by degree level, contribute to superior financial performance, as proxied by return on assets (ROA). Using a panel data set comprising 150 firms listed on the Nigerian Exchange from 2014 to 2023, the study employs a random effects model (REM) regression analysis to account for firm-specific heterogeneity. Control variables include firm size, board independence, leverage, and audit quality. The findings reveal a positive and statistically significant relationship between CEO education level and firm performance, suggesting that higher educational attainment, particularly in finance, economics, or management-related fields, enhances strategic decision-making and corporate outcomes. However, the study notes that the quality of education and contextual challenges in the Nigerian business environment may moderate this relationship. The study limitations include potential endogeneity issues and reliance on secondary data, which may not fully capture the qualitative aspects of educational background or leadership effectiveness. The implications are relevant for board nomination committees, regulators, and investors seeking to align executive selection with performance outcomes. This research contributes original insights by focusing on the underexplored Nigerian context and emphasizing the strategic value of human capital at the executive level. It highlights the need for policies that promote educational competence in corporate leadership for improved organizational performance.

Keywords: Audit Quality, Board Independence, CEO Education, Firm Performance, Firm Size, Leverage