Effects of Cost Control Techniques on the Profitability of Listed Manufacturing Companies in Nigeria
Year: 2026
Type: article
Abstract: The profitability of Nigerian manufacturing firms has come under sustained pressure from rising material, energy and overhead costs, currency volatility and intense competition, prompting renewed interest in cost control as a controllable determinant of financial performance. This study examined the effects of cost-control techniques on the profitability of listed manufacturing companies in Nigeria, disaggregating cost control into material cost control, labour cost control and overhead cost control. Grounded in the Contingency Theory of Management Accounting and the Theory of Economies of Scale, the study adopted an ex-post facto design using a balanced panel of ten listed manufacturing firms over the ten-year period from 2015 to 2024, producing 100 firm-year observations. Data extracted from audited financial statements were analysed using descriptive statistics, Pearson correlation and fixed-effects panel regression. Firm size and leverage were included as control variables, while return on assets and net profit margin were used as measures of profitability. The three cost-control dimensions jointly explained approximately 57% of the variation in profitability (adjusted R² = 0.571; F = 27.4, p < .001). The results confirmed that systematic cost control, particularly the control of material and overhead costs, is a significant driver of manufacturing profitability. The study concluded that cost-control techniques significantly affected the profitability of listed manufacturing companies in Nigeria between 2015 and 2024. It recommended prioritising material- and overhead-cost control, institutionalising budgetary control and standard costing, and adopting contemporary techniques such as activity-based costing and lean manufacturing.
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7201967445